In 2008, Toyota faced an embarrassing problem: The Imperial Family’s luxury Century Royal, used to carry Crown Prince Naruhito around Japan, was a dud. Memos flew back and forth between managers and senior engineers trying to find the cause of what appeared to be a speed-control fault. “This is a very difficult situation,” fretted one engineer. “The Imperial Household Agency feels there is risk if it should recur.”
The unspoken concern was clear: What if a crash hurt or even killed Japan’s heir to the Imperial throne?
The problem seemed rooted in electronics — but its solution was elusive, even to all those trained minds. Toyota replaced the gas pedal, the throttle system and the engine computer at its own expense.
The crisis passed; the engineers heaved a collective sigh of relief.
For Betsy Benjaminson, however, that incident was a turning point. A professional translator, she had been privy to internal memos at Toyota and other large Japanese corporations since living and working in Japan in the 1970s. From 2000, she was exceptionally busy, thanks to the huge upsurge in legal translation among these companies. As they expanded abroad, the companies became ensnared in legal battles over price-fixing, bad deals, financial fraud and unreliable suppliers.
Demand for experts able to bridge the linguistic and legal gaps was intense.
Toyota was bigger than them all. In the seven years after 2000, the carmaker’s U.S. sales rocketed by 80 percent and its market share almost doubled. Yet, just as it should have been celebrating ending General Motors’ 76-year reign as the planet’s largest automaker, it was battered by a series of scandals and recalls. Some experts said it had expanded too fast and let quality-control standards slip; others called it “big-company disease.”
Benjaminson, 56, found herself translating hundreds of internal Toyota documents for a New York law firm that was representing the motor company in dealings with the U.S. Department of Justice and the Securities and Exchange Commission.
Toyota was under investigation for a string of sudden-acceleration incidents. Thousands of complaints alleged runaway cars; scores of people had been hurt or killed.
An off-duty policeman and his wife, daughter and brother-in-law died when their Lexus sedan sped out of control and crashed near San Diego. An emergency services 911 dispatcher recorded a panic-stricken call from one of the doomed passengers: “Our accelerator is stuck!”
A Minnesota man jailed for killing three occupants in a car he rear-ended insisted that his Toyota Camry had suddenly sped up. He was later released.
Cars had driven into trees on straight roads, plunged into rivers and off cliffs.
Reading the Toyota documents, Benjaminson was shocked at the contrast between the frantic efforts to fix the Imperial limo and what she calls Toyota’s “stonewalling” of consumers and investigators during the U.S. probe into these crashes.
“The attitude in these memos between all the engineers working on the Crown Prince’s car seemed very different,” she says. “They brought a lot of people together and talked about the problem very seriously.”
In contrast, much of the company’s energy in the United States seemed to be devoted to directing attention away from and covering up the problems.
Internal memos showed managers and executives “withholding, omitting or misstating facts” as they sought to “hoodwink” lawmakers, courts and regulators, according to Benjaminson. The reason was not hard to understand, she concluded: Electronic problems are notoriously time-consuming and expensive to fix.
“I saw the huge discrepancy between what the company was doing publicly and what was being done internally. And I realized something was very wrong.”
That epiphany triggered a profound decision: Benjaminson turned whistleblower.
Ignoring legal warnings, she sent the incriminating memos to journalists, then to regulators and politicians. In March this year, after several years anonymously working for full disclosure, she went public. Her claims are shocking.
Toyota has continually made misleading statements about defects in its in-car electronics, which had caused the sudden-acceleration accidents across the world, she says. Thousands of complaints have reached Toyota and the U.S. government.
The company’s engineers, quality-control managers, lawyers and executives know that the cars are defective but have stayed quiet, she says. As the accidents piled up, they blamed floor mats, sticky gas pedals and driver error — while Toyota’s PR department produced what she calls “make believe” for public consumption.
“I felt the public was undoubtedly at risk; cars on the road were dangerous and inside the company they seemed to know it,” she says.
Benjaminson’s claims were assessed this year by U.S.-based Corporate Counsel, a highly respected monthly magazine covering legal corporate affairs. The magazine’s panel of experts did not find a legal smoking gun proving that Toyota had found and concealed “an electronic defect that was responsible for crashes.” But it said many of the memos she leaked showed at the very least serious discrepancies between the turmoil inside the company and its bland public reassurances.
These discrepancies were evident during Congressional hearings held in 2010 at the peak of Toyota’s U.S. crisis. Ray LaHood, secretary of the U.S. Department of Transportation, promised to hold Toyota’s “feet in the fire.” The company was forced to recall more than 8 million cars and pay fines of more than $50 million. More than $20 billion was wiped off its stock price.
Toyota executives, including President Akio Toyoda and Jim Lentz, the CEO of Toyota Motor Sales USA Inc., were summoned to testify.
Lentz denied problems in the electronic throttle systems of its cars. “We have done extensive testing on this system, and we have never found a malfunction that caused unintended acceleration,” he said. Toyoda struck a more conciliatory note: “Quite frankly, I fear the pace at which we have grown may have been too quick,” he said. “We pursued growth over the speed at which we were able to develop our people and our organization.”
But Congress never heard the private concerns of Masatomi Takimoto, Toyota’s R&D chief. Nonetheless, in an analysis by him of the company’s structural problems sent to this reporter by Benjaminson, he blames cost-cutting, overexpansion, poorly educated workers, failure to source or integrate quality local parts, poor communications with overseas suppliers and other problems for the company’s predicament.
“These problems were described as so pervasive and wide-reaching that it is highly implausible that they could be resolved in a matter of months or even a few years,” says Benjaminson.
Toyota has denied Benjaminson’s claims, calling them “misleading and wrong.” In a statement released in April, the company said the safety of its electronic throttle-control system had been “repeatedly confirmed.” It cited a joint probe by the National Highway Traffic Safety Administration (NHTSA) and NASA scientists, who together lent their expertise in complex computer-controlled electronic systems. Toyota and the NHTSA say NASA found no electronic flaws capable of triggering unintended acceleration.
Instead, the NHTSA said the problem was mechanical, not electronic: a design flaw that trapped gas pedals in floor mats, and “sticky pedals, that made some accelerators too slow to release.”
Toyota insists it has fixed those problems in recalls. In February 2011, LaHood said he was satisfied that Toyota cars were safe.
Benjaminson and others call LaHood’s verdict premature. She says the Toyota memos show that electronics issues related to unintended acceleration were known inside Toyota but ignored in the NHTSA and NASA probes. “It’s an ongoing scandal and Toyota is still covering it up,” she says.
Sean Kane, the head of Safety Research & Strategies, a U.S. company that investigates injury and death cases involving cars and other products, is more blunt. He says the regulators gave Toyota a pass after intense government pressure on both sides to wind up the crisis and return to business as normal.
“They made it look like they were playing hardball, but those penalties amounted to just minutes of profits for this company,” Kane maintains.
Stories of runaway cars continue to emerge. In March this year, Mussarat Chaudhary, a 58-year-old mother of seven, died after her 2009 Toyota Camry plunged into the Sacramento River in northern California. Her lawyer and family are suing Toyota, blaming sudden acceleration. Around 500 similar lawsuits are pending across the U.S.
This year, in an attempt to end the affair, Toyota is expected to pay a stunning $1.3 billion to compensate owners for economic losses associated with its cars. The terms of those settlement agreements keep all discovered technical facts secret.
“It’s pretty rare that we don’t hear from consumers every single day about sudden acceleration,” says Kane.
As one of Toyota’s leading critics, Kane’s research helped trigger the Congressional inquiry into the company. He claims to have examined thousands of complaints and says he has no doubt that electronic problems are to blame in many cases.
“What’s compelling is that there are patterns that stand out, and there is more going on than can be possibly explained through driver error or mechanical faults,” he says. “Cars now have electronic control systems that have millions and millions of lines of code that take signals from all over the vehicle, so you’re going to have problems.”
One reason why Toyota is struggling with sudden acceleration is its sheer success, says Kane. “When Toyota creates a technology, they use it across so many platforms that the breadth and scope of the vehicles involved causes problems. Ford and other companies may have pockets of problems with vehicles, but they tend to be limited to certain models.”
In 2012, Benjaminson took her campaign to Washington. She sent her files to Sen. Charles Grassley, the ranking Republican on the powerful Judiciary Committee, which oversees antitrust law, among other issues.
In meetings with Judiciary Committee staffers, technical experts substantiated her concerns that Toyota had not fully disclosed and the NHTSA had not fully investigated the root causes of unintended acceleration. But that investigation was then suspended, as is another potential probe — pending further evidence — by the House Energy & Commerce Committee.
In addition, the intense spotlight on Toyota in 2010-11 has seemingly created media and political fatigue.
However, Benjaminson, the translator, who lives and works in Israel, says she has no intention of quitting.
“The highest level of safety is to submit to third-party checking,” she says. “Unfortunately, the auto industry has escaped this safety-certification system till now. Basically, consumers are being asked to trust the automakers with their lives. Toyota’s engineers and executives may feel infallible and entitled to complete secrecy — but consumers deserve better.”
IN FIVE EASY PIECES WITH TAKE 5