DETROIT (Reuters) – Toyota Motor Corp has told U.S. dealers it will pay for a secondary repair related to a massive safety recall on its top-selling Camry for sticking accelerator pedals.
In a bulletin sent to its U.S. dealers on Tuesday, Toyota said it would pay to repair a bracket holding the accelerator pedal in place on the Camry sedan and the more expensive Avalon if that part is damaged while the recall work is being done.
Toyota's notice to dealers represents the latest complication in a high-profile safety recall that was ordered by U.S. safety regulators in January.
That recall of about 2.3 million vehicles in the United States, including the Camry and the Avalon, took aim at the risk that accelerator pedals could become stuck in place or trap floormats.
In some cases, repair technicians at Toyota dealerships inadvertently stripped bolts on the accelerator bracket in the Camry and Avalon when performing the recall, Toyota spokesman Brian Lyons said.
Toyota's service bulletin on how to repair the accelerator bracket in such a case under warranty was not immediately made public. A copy was obtained by Reuters.
Toyota said it would pay for dealerships to perform a repair expected to take about 40 minutes if the initial recall damaged the bracket.
Lyons said the secondary damage had been "extremely rare on a handful of vehicles."
Lyons said no Toyota owners had driven away with loose bolts on the accelerator after having the recall repair completed. "It's nothing the consumer would ever experience," he said.
In April, Toyota agreed to pay a record $16.4 million fine for delaying the recall of the defective accelerator pedals in the U.S. market.
As of November 22, Toyota had repaired about 1.9 million vehicles in the U.S. market for the sticky pedal problem, which as more than 80 percent of the vehicles recalled, Lyons said. Toyota's U.S. shares were up with the rest of the market on Wednesday, with Toyota up 2.5 percent and the S&P 500 Index up 2.2 percent in midafternoon.
SAFETY CRISIS FALLOUT
Only the Camry and the Avalon are at risk for a repair damaging the bolts on the accelerator bracket assembly because the other vehicles recalled use a different system.
Lyons said Toyota's own data showed that customers were very satisfied with the fixes to the accelerator under the recall that involved cutting the bottom of the pedal and adding a shim to keep it from sticking.
Records of consumer complaints by the National Highway Traffic Safety Administration show that several dozen Camry and Avalon drivers have complained about the feel of the repaired accelerator pedals after the recall.
Fallout from the safety crisis has damaged Toyota's once market-leading reputation for quality and safety and cost it sales in the U.S. markets, analysts have said.
In response, Toyota has created a new executive team focused on quality that reports to Chief Executive Akio Toyoda, devoted more engineers to quality management and slowed the pace of vehicle development program.
Last month, a federal judge in California ruled that a class-action suit on behalf of about 40 million consumers seeking economic damages from the automaker could proceed.
The automaker has also rolled out incentive programs to win back American consumers, including a heavily touted "Toyota Care" program that promises car shoppers free maintenance and roadside assistance for two years.
(Reporting by Bernie Woodall and Kevin Krolicki, editing by Matthew Lewis)
December is typically a sleepy month for financial news, especially as traders and boardrooms make the most of the holiday season. The calendar never sleeps, though. Here are a few of the days that I plan to approach with eyes wide open this month.
Is the third time the charm for the Narnia series? Disney (NYSE: DIS - News) threw in the towel after its second installment in 2008 generated less than half of the $291.7 million domestic box office take of the 2005 original.
News Corp.'s (Nasdaq: NWS - News) Fox stepped in to save the franchise. We'll see whether the gutsy gamble pays off when The Voyage of the Dawn Treader hits a multiplex near you a week from Friday.
As for Disney, it has its sights set on a different revival. TRON: Legacy opens a week later.
Best Buy (NYSE: BBY - News) checks in with its quarterly report on Dec. 14. Since Best Buy is the leading consumer electronics superstore chain, one doesn't have to be a shareholder to show interest in its financials.
Are tablet sales eating into its laptop business? What are the hot smartphones? Is Microsoft's (Nasdaq: MSFT - News) Xbox 360 still the console to watch on the video-game front, after the release of its revolutionary Kinect motion-based controller? Are appliances moving again, as an encouraging sign that homeowners are embracing big-ticket items?
Now that Circuit City has been out of the picture since early last year, Best Buy is a perfect gauge for what consumers are buying.
Fans of Howard Stern have been marking this date on their calendars, since it's the last live episode under the legendary morning-show host's five-year deal with Sirius XM Radio (Nasdaq: SIRI - News).
CEO Mel Karmazin had told investors during the company's second-quarter call that an announcement on Stern's fate would likely come before its next call, but that came and went. The next obvious window for a positive announcement would be Dec. 13, when Sirius XM hosts a Paul McCartney concert in New York to celebrate hitting 20 million subscribers.
Obviously, negotiations aren't going as easily as either party planned. Stern fans are unlikely to make long-term commitments until a deal is inked. Then again, since talks to re-sign Opie & Anthony on XM dragged into the final hours, it wouldn't be a shock if Stern and Sirius continue to volley about proposals throughout the holiday break.
The undisputed champ of desktop publishing checks in just before the holidays, with Adobe (Nasdaq: ADBE - News) serving up its fiscal fourth quarter results.
Adobe leans on its high-end publishing software to drive its top line, but we also can't dismiss its freely available PDF Reader and Flash video-rendering platform as ambassadorial tools to reach the masses.
Analysts are banking on a profit of $0.52 a share, well ahead of the $0.39 a share it rang up a year earlier. Adobe has beaten Wall Street expectations in each of the five previous quarters, so even the company's seemingly ambitious target may be too low.
Auto sales bounced back during the summer of 2009, but are used cars hitting any speed bumps?
CarMax (NYSE: KMX - News) reports on Dec. 21, helping to give the market a great snapshot of how the automotive resale sector is holding up. CarMax's haggle-free environment has helped clean up the stereotype of used-car salesmen. But now, amid rising sales of new cars, investors want to know whether secondhand vehicles are still hitting the road in acceptable numbers.
What will you look forward to this month? Share your thoughts in the comment box below.
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JUNEAU, Alaska – BP PLC is suspending construction of an oil rig off Alaska's coast to review its engineering and design plans and ensure the Liberty project can be done safely.
BP Alaska spokesman Steve Rinehart says "a few issues" were encountered over the last year in working to assemble the rig. He wouldn't define those but said BP wants to ensure the rig meets company standards.
The project calls for using a manmade gravel island in the Beaufort Sea as a drilling base, with a rig drilling horizontally for six to eight miles to tap what BP estimates is a 100-million-barrel reserve of recoverable oil. Critics have questioned the approach following the Gulf of Mexico oil spill.
Rinehart says BP remains committed to the project. No timeline was given for construction to resume.