Japan scolds Toyota for recall practices

updated 12:53 p.m. ET July 21, 2006

TOKYO - In a rare public scolding of Japan’s biggest company, the government reprimanded Toyota Friday and called for improved recall practices amid a criminal investigation into a 2004 accident.

The transportation ministry issued a “guidance” order requiring the automaker to report to the ministry by Aug. 4 steps it is taking to better monitor reports of defects and speed up communication within the company about possible problems, a ministry official said on customary condition of anonymity.

The ministry did not fine Toyota or find it guilty of breaking the law.

But public prosecutors, who are independent of the government, may still file charges against Toyota Motor Corp. officials, who are under investigation.

Toyota Executive Vice President Masatami Takimoto said the manufacturer will do its best to beef up its practices as instructed by the ministry.

“We take the directives from the ministry very seriously,” he said in a statement.

The widely reported recall investigation — coming at a time when Toyota recalls are ballooning — has been a major embarrassment for Toyota because of its solid reputation for quality.

Earlier this month, police said they were sending papers to prosecutors on three Toyota officials in a criminal investigation on suspicion of professional negligence for allegedly shirking recalls for eight years.

Police say they suspect the three Toyota officials, whose names have not been disclosed because they have not been charged, knew about the problems as far back as 1996 but took no action.

The defects being investigated, a suspected faulty steering part, may have caused an August 2004 head-on crash in southwestern Japan that injured five people, they say.

Toyota has denied any wrongdoing, saying that the reported problems had not appeared serious enough to warrant a recall until October 2004, when Toyota recalled in Japan 330,000 Hilux Surf vehicles manufactured between December 1988 and May 1996.

The 2004 recall affected more than a million vehicles sold in 180 nations, including the U.S. and Europe,and some problems had been reported from abroad, according to Toyota. None of the reports from abroad had caused accidents, the company said.

At a news conference Thursday, Toyota President Katsuaki Watanabe bowed deeply and apologized for the recall troubles such as stirring up worries among customers. He denied wrongdoing.

“I take this seriously and see it as a crisis,” said Watanabe. “I want to apologize deeply for the troubles we have caused.”

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