UPDATE 2-US Transport Sec: ‘We’re not finished with Toyota’

* U.S. continues to review electronic throttle

* Took ‘enormous effort’ to get recall follow-up

* House committee notes conflicting Toyota statements

* Regulators could seek Toyota fine over recall issue

(Updates with congressional request, Toyota response)

By John Crawley

WASHINGTON, Feb 2 (BestGrowthStock) – A two-front U.S. government
investigation of unintended acceleration in Toyota Motor Co
(7203.T: ) vehicles intensified on Tuesday, despite the
automaker’s belief that it has solved the problem.

“We’re not finished with Toyota,” Transportation Secretary
Ray LaHood said in an e-mailed statement to Reuters about the
response by the Japanese automaker and the government to
consumer complaints that led to two recalls of 5.6 million cars
and trucks in the United States in 2009 and in January.

LaHood’s comments referred to renewed efforts at the
National Highway Traffic Safety Administration (NHTSA) to
recheck files from past investigations that found no problems
with Toyota’s electronic throttle control system. That
technology was introduced more widely in the automaker’s
products several years ago.

Toyota said it would cooperate fully with the NHTSA
investigation.

An Obama administration official, who commented on the
condition of anonymity because the investigation is ongoing,
said safety regulators are continuing to look at the
“possibility that electromagnetic interference” might somehow
be causing problems with Toyota’s throttle control systems.

“NHTSA has not seen evidence to support that yet,” the
official said.

Such a finding could mean more serious problems for Toyota
than it has experienced over the past several weeks.

“It becomes a whole other ball game if it turns out to be
an electronics issue,” said Autoconomy analyst Erich Merkle.
“Not only does it get more expensive to fix, but there’s a
trust factor between Toyota and its consumer.”

The first Toyota recall last fall involved floor mats that
could loosen and jam under the accelerator pedal. The second,
imposed on Jan. 21, involved accelerator pedals that would not
spring back as designed.

Toyota is modifying gas pedals, redesigning floor mats and
taking other steps to address the first recall. On Monday, it
announced a mechanical fix for the “sticky pedal,” which had
resulted in a suspension of sales and production involving
eight models, including big selling Camry and Corollas.

Jim Lentz, president and chief operating officer of Toyota
Motor Sales USA, told Reuters television on Monday that the
company could have moved more quickly on floor mats. But he
stressed Toyota is convinced the accelerator problems have
nothing to do with electronics.

“That system has been tested. It has been tested by us. It
has been tested by outside agencies. There are a number of
fail-safe systems within that system that it is not an
electronics issue. We are convinced,” Lentz said.

Congressional investigators separately questioned Lentz’s
conclusions on Tuesday.

Rep Bart Stupak, chairman of the House Energy and Commerce
Committee’s investigations subcommittee, sought a clarification
from Lentz, who said on NBC’s “Today” show on Monday that
Toyota believes action to address the two recalls would “stop
what’s going on” with accelerators.

Committee investigators said Lentz’s comments differ from
less convincing statements Toyota officials made to committee
investigators about the matter last week. Stupak’s committee
has requested documents on acceleration matters dating to
2000.

Stupak, whose home state of Michigan is headquarters for
U.S. automakers, has scheduled a hearing for Feb. 25. The House
Government and Oversight Committee will also hold a hearing on
Toyota on Feb. 10.

A government official also said the Transportation
Department is considering imposing a civil penalty against
Toyota over the matter.

Fines can be imposed against transportation companies that
knowingly stray from federal rules or policies or fail to
promptly remedy a problem. The fine for automakers cannot
exceed $16 million per recall, according to federal law.

LaHood said regulators pressed Toyota at the end of 2009
and again the beginning of 2010 on a recall of accelerator
assemblies.

“While Toyota is taking responsible action now, it
unfortunately took an enormous effort to get to this point,”
LaHood said.

In an unusual move, LaHood said U.S. officials traveled to
Japan in December to “remind Toyota management” about its
“legal obligations.” They insisted in a second meeting in
Washington in January that the company address faulty
accelerator pedals.

Because it identified a defect, Toyota was obligated to
halt sales of affected vehicles until a remedy for the “sticky
pedal” recall was in place.

On floor mats, Toyota did not identify a defect, but
nevertheless opted for a recall.

Stock Market

(Reporting by John Crawley and David Bailey; editing by John
Wallace and Andre Grenon)

UPDATE 2-US Transport Sec: ‘We’re not finished with Toyota’