Japanese carmaker Toyota may have bigger problems than just a string of expensive recalls and a wave of bad PR.
The company disclosed that a U.S. grand jury in New York has subpoenaed company documents related to flaws in vehicle steering systems. It's possible that criminal charges could result.
A Toyota spokesman said the company is cooperating with the grand jury but would not discuss any specifics concerning the investigation.
In September 2005, Toyota announced what, at the time, was its largest ever recall. The carmaker pulled in 978,000 pickup trucks and sport utility vehicles sold in the U.S. because a steering relay rod on the vehicles may fracture, causing a loss of control.
The recall included the 1989-1996 model years and included power-steering equipped 4Runner sport utility vehicles and compact pickups and T-100 pickups. In May, the National Highway Traffic Safety Administration (NHTSA) announced it was investigating that recall, suggesting Toyota might have violated rules for informing safety regulators about vehicle problems.
Specifically, NHTSA wanted to know if Toyota reported the steering defect within five days of discovering it, as it is required to do by law. The agency might be a little suspicious, since Toyota has agreed to pay a record $16.4 million fine for not reporting what it knew about its sudden acceleration problems for four months.
In 2004, Toyota conducted a recall in Japan for Hilux trucks with steering relay rods prone to fatiguing, cracking and possibly breaking, causing the vehicle to lose steering control. At that time, Toyota informed NHTSA that the safety defect was isolated to vehicles in Japan and that the company had not received similar field information within the U.S.
In 2005, however, Toyota informed NHTSA that the steering relay rod defect was present in several models sold in the U.S. and conducted a recall.
Pre-2004 complaints
At the end of April NHTSA said it was alerted to a number of complaints filed with Toyota by U.S. consumers prior to the 2004 Hilux recall in Japan. As a result, NHTSA decided to open an investigation into whether Toyota met its legal obligation to conduct a timely recall of vehicles with the defect in the United States.
"Safety is our number one priority and we take our responsibility to protect U.S. consumers seriously," said U.S. Transportation Secretary Ray LaHood. "With new assurances from Toyota about their efforts to improve safety, I hope for their cooperation in getting to the bottom of what happened."
It's unclear whether the NHTSA investigation, and that of the New York grand jury, are connected. Though the company has never been hauled before a grand jury in the U.S., Toyota has faced a criminal investigation in Japan.
In 2006 three Toyota Motor Corp. executives who were quality-control managers were the focus of a criminal investigation in Japan into whether they downplayed reports of steering problems at the automaker in the mid-1990s. The steering flaw was cited as the possible cause of a serious accident in Japan that eventually led to a recall by Toyota of more than one million vehicles last year.
Five people were injured, one of them seriously, in Kumamoto in August 2004 when the steering of a Toyota Hilux Surf SUV failed and it hit another vehicle. The SUV was built in 1993.
Most recent recall
At the end of May, Toyota was still dealing with the problem, recalling Prius models from the same era to fix a similar power steering defect. The recall applied to the second-generation model of the hybrid car and covered vehicles made between July 2003 and December 2005.
Toyota said the fault was in a steering shaft, which Toyota said could crack if the steering wheel is turned forcefully or if the car is driven onto the curbing while parking.
