The Government is no longer an impartial evaluator of recalls and auto safety issues.

Last year when General Motors went into bankruptcy and was bailed out by the Federal Government, a major part of the settlement was that the U.S. Government would have a 60% share of the stock, the Canadian Government would have 12%, and the United Auto Worker’s Union would have 17.5%.  That is a combined government and union ownership of GM of 79.5%.

Sales of Toyota vehicles have been on a regular increase to compete with GM for the last several years.  In 2005 there were headlines about Toyota perhaps surpassing GM worldwide sales.  Now it seems that GM will continue to be in the lead for the foreseeable future.  The New York Times reported that with the recent recall news Toyota may have lost more than 20,000 sales in the last week of January when all of the recent recall news came out.

Some people have questioned whether it is the gas pedal or the throttle control causing the problem.  The National Highway Traffic Safety Administration(NHTSA) has investigated complaints of unexplained acceleration problems and has not found the pedal (or anything else) to be a consistent problem.  Toyota insists it is the pedal and has created a fix for the problem.  Toyota executives will be hauled in front of a made-for-network-news congressional hearing to prove that it is not the throttle control causing the problem.

It is at least curious that the majority shareholder of GM (the U.S. Government) is pressing to have Toyota replace the throttle control instead of a less expensive fix with the pedal in the absence of official evidence either way.  Keep in mind the actual numbers of problems with these recalled vehicles.  There have been approximately 19 deaths in the last 5+ years from acceleration issues with no consistent identified cause, or approximately .001% of the recalled vehicles.  That means that your chances of having a lethal encounter with a Toyota recalled vehicle is about 1 in 100,000.

Transportation Secretary LaHood has been doing his part to trash Toyota as well.  Secretary LaHood has accused Toyota of not taking safety seriously and responding slowly to safety concerns.  At a hearing with a congressional panel on Feb. 3rd, Secretary LaHood said that if you own one of the recalled vehicles you should stop driving it immediately until the problem is fixed before re-examining his statements just a few hours later saying he mis-stated what he meant.

It is no secret that Union leaders have a special influence with this administration too.  The special tax treatment for union employee health plans in the health care plan is just one example.  Toyota has several factories in North America and the only unionized plant in Fremont California is scheduled to close in March 2010.

The U.S. Government has a financial stake in the well being of GM and is in a position to regulate and penalize Toyota.  This is a conflict of interest and calls into question the objectivity of officials who are supposed to be looking out for the public welfare but may instead by watching GM’s bottom line and the interest of unions.

Comments Welcome

Advertisements