The Irish Independent reports that the pay packets of TDs will fall by an average of €17,000 this year, a new survey by the newspaper has found.
Their overall earnings will drop by about 13pc to an average of €112,000 after the economic downturn brought the Dail gravy train to a grinding halt. However, our elected representatives' overall salaries are still high by international comparisons.
The study by the Irish Independent shows that the salaries of our TDs and ministers have been cut by €2.75m over the past 18 months -- almost €17,000 per TD. The survey charts the exact salary of every TD in every constituency, showing exactly what they are paid, and explains the breakdown of the pay bill. But this is before the expenses package and allowances for offices, phones, travel and subsistence are added into the equation.
Finance Minister Brian Lenihanis finalising plans to also reform the Oireachtas expenses system, which will result in cuts for all TDs. The new system will be vouched and will mean TDs having to clock in, in some form, to prove their attendance.
Aside from being hit with the public sector pay cut from Budget 2010, which was implemented from the start of this year, TDs have also seen their top-up payments cut or scrapped completely.
The high point for politicians' wages came in September 2008, when the basic wage broke through the symbolic €100,000 mark for the first time and the Taoiseach's salary reached €285,000.
The increase at that point came about when the Towards 2016 wage agreement kicked in. It brought the annual pay bill for all our TDs to €21.2m. But this peak was short-lived as within six weeks the cutbacks began, with the Taoiseach, ministers and junior ministers taking a 10pc reduction in the early Budget of October 2008.
Since then, politicians have seen their salary cut by an average of €16,600 -- ranging from €57,000 off Brian Cowen's salary to €7,526 from a newly elected backbencher's basic wage. The annual pay bill now stands at €1.85m per annum.
The Budget 2010 public sector pay cut saw a TD's basic salary reduced by 8pc, as it fell into a higher income band.
When the Government brought in this obligatory pay cut, most TDs who had taken a voluntary cut accepted this new salary level to avoid taking a double hit.
But a few TDs, such as Fine Gael's Frank Feighan, are still accepting a voluntary reduction of 5pc on top of their 8pc pay cut.
Bonus
Fifty TDs only get the basic Dail salary of €92,672. The rest are either ministers, holders of positions in the Oireachtas or entitled to long-service bonus payments.
All salaries are subject to the public sector pension levy, introduced last year.
The allowances paid for holding positions on Oireachtas committees are treated as permanent pensionable pay -- but these were slashed last year, saving €565,000 per annum.
And a large group of TDs lost out on a €3,000 pay rise last year, which was due to kick in just after ordinary workers got hit by tax hikes in the emergency Budget
The bonus payments due to be made to one in every six TDs in the Dail, simply because they held on to their seats in the general election, were halted by the Government.
Some 26 TDs from across all the political parties, elected for the first time in 2002, were due to pick up an increase of €3,198 on their permanent pay, known as a long-term increment.
TDs who had already served over seven years or 10 years continued to pick up the bonus, but no new entrants to the system were granted the pay rise.
The number of junior ministers was reduced from 20 to 15, also generating savings of almost €250,000.
Mr Cowen's own salary went up to €285,582 within months of him taking up office, but is now down to €228,466 after two cuts worth 20pc to ministerial salaries.
Before the economic downturn, former Taoiseach Bertie Ahern accepted the recommendation of a review body on salaries to increase his wages by another €36,000 to see his pay packet hit €310,000 over the following years.
However, a public backlash caused this recommendation to be shelved.
The highly lucrative Oireachtas committee system was substantially curbed over the past year.
Committee chairmen saw their allowance halved and members of the Houses of the Oireachtas Commission, the body in charge of running Leinster House, got a cut of 20pc.
The much-maligned payments for committee vice-chairmen and convenors were also abolished completely.
The Irish Independent also reports that the National Asset Management Agency (NAMA) will not begin operating on its scheduled date because the European Commission has not yet approved the Government's solution to the banking crisis.
The agency's target of February 12 to begin buying toxic bank loans is likely to be missed as the commission has extended its examination of NAMA.
Citing sources in the commission, the 'Sunday Business Post' also reported yesterday that a complaint from Fine Gael was also slowing down the process.
The delays are also being caused by the banks' failure to get their paperwork completed and the Government's failure to find investors to take a stake in the so-called special purpose vehicle -- a device to ensure that NAMA's €54bn of debts are not counted as part of the national debt by the commission, it was reported.
News of delays will be a blow to shareholders and the Government, which repeatedly said that it drew up the plans following close consultation with Brussels. Any delay will not be the first for the controversial scheme. Originally, the aim was for NAMA to buy loans from December. A major deadline for NAMA is March 30, the last day of Bank of Ireland's financial year.
The European Commission must ensure that the Government's solution does not distort the European banking market and is in line with bank bailouts in other member states. It has previously surprised other governments by rejecting elements of their bank bailout plans and forcing banks to sell units.
The European Central Bank is effectively bankrolling NAMA, which has been approved by the Dail. Other media reports said Bank of Ireland is objecting to the low valuations placed on the loans it is transferring to NAMA. The 'Sunday Tribune' reported that the Government has valued the bank's loans at 40pc less than their original amount.
The bank, which declined to comment, has previously said the loans will be about 30pc less. Such a difference would mean the bank would raise less money than expected when it transfers loans, making it more likely that the State will end up owning a large stake in the bank.
Shares in both Bank of Ireland and Allied Irish Banks have tumbled in recent weeks as investors lost faith in the banks' ability to sort out their problems. The share price of both banks is less than half the share price in September.
Downgraded
Credit-rating agency Standard & Poor's downgraded the country's entire banking sector last week and said it now estimates that the number of problem loans will be higher than it previously calculated. Our banking system is now ranked at the same level as Greece, the Czech Republic and Slovakia.
The rating agency said the banking crisis could end up costing us more than €50bn in the period from 2009 to 2011.
Loan losses for Irish banks will probably amount to about 10.7pc of all loans in the period between 2009 and 2011, forcing the banks to write off €36.7bn.
The ratings agency added that there was a danger of a "stress scenario" with total losses of about 14.6pc of loans or €50bn over the period between 2009 and 2011.
This scenario would arise if the economy deteriorated and the price of property plunged further than current estimates allow, it said.
The Irish Times reports that the Government is not prepared to reverse pay cuts already introduced for staff in the public service in return for co-operation with reform plans, official sources indicated yesterday.
The move comes as up to 70,000 members of Siptu are today set to join in the industrial action being carried out by other public service unions in protest at the pay cuts introduced in the budget.
Separately lower-paid civil servants, who are members of the Civil Public and Services Union, are expected to agree to step up their campaign of action when its strike committee meets today.
Yesterday trade union leaders signalled that they wanted to get back into talks with the Government to seek a deal that would cover both public pay policy, including the salary cuts announced in December, and the transformation programme for the public service which Ministers maintain is a priority.
However, while the Government is anxious to meet the unions to discuss the transformation of public services, it seems unprepared to give a commitment to reverse the pay cuts introduced in the budget as any form of trade-off in return for reforms.
A Government spokesman said last night that it was prepared to engage in meaningful discussions with the trade unions in order to get public service reforms that would benefit everybody
Last week Tánaiste Mary Coughlan twice refused to rule out the possibility of further cuts in public service pay. She said nobody in Government or in the Opposition was in a position to say what adjustments were needed in the context of next year’s budget
In December the Government rejected controversial proposals put forward by the trade union movement which would have seen staff take 12 days unpaid leave and co-operate with widespread reform plans in return for an agreement to maintain pay levels. Instead it opted to introduce across-the-board pay cuts for more than 300,000 public service staff.
Yesterday Peter McLoone, the general secretary of Impact and chairman of the public services committee of the Irish Congress of Trade Unions, said that a majority of union members wanted a negotiated solution to the dispute over pay.
However he told The Irish Times that public pay policy would have to be part of the agenda for any new talks with the Government.
He said that pay policy was currently governed by two pieces of emergency legislation and that both contained provisions that allowed the Government to modify its stance.
The president of Siptu, Jack O’Connor, said 69,700 members of his union in the public service would be joining in the industrial action from today. He said that this action by members in the health, education, local authority and State agency sectors would include a ban on co-operation with change and a work-to-rule.
He said that the industrial action was “not designed to start a war but rather to leverage negotiations”. However, he said that some elements of the Government appeared eager for confrontation.
So far the Government has adopted a “softly-softly” approach to the industrial action undertaken by public service staff.
However, last week The Irish Times revealed that the Department of Finance had drawn up a draft memo setting out options for the Cabinet including a ban on deductions of union subscriptions at source and the payment of staff who took time off work to attend union conferences if industrial action continued.
Yesterday the Sunday Tribune reported that the Government would suspend public service workers who refused to carry out duties.
Unions have warned of strikes if members were removed from the payroll as part of the current industrial action.
Government sources said last night that the Cabinet was expected to consider further the proposals drawn up by the Department of Finance.
The Irish Times also reports that troubled Irish private equity group Claret Capital is to receive a $16 million (€11 million) dividend payment from HCA, the largest private hospital operator in the United States.
This is part of a €1.75 billion distribution to stockholders by HCA, which was announced last week. The funds will be paid out on February 5th.
Claret invested $50 million in a $33.5 billion leveraged buyout of HCA in November 2006, making it the group’s single biggest investment.
This dividend payment represents a 33 per cent return on Claret’s investment and is a rare piece of good news for the Irish company, which has been severely impacted by the global credit crunch and has significantly scaled back its operations in the last year.
In a statement published on Friday, Tennessee-based HCA said the distribution would be funded through its existing asset-based and general revolving credit facilities and available cash.
No comment was available yesterday from Claret.
Claret was established by Irish financier Dómhnal Slattery, who made his name in aircraft leasing with Royal Bank of Scotland. The family of Senator Feargal Quinn owns 25 per cent of the business.
It manages funds on behalf of a number of investors, including Cork businessman Barry O’Callaghan and former Anglo Irish Bank chief Seán FitzPatrick.
Claret invested close to $50 million in Mr O’Callaghan’s Education Media and Publishing Group (EMPG) but is set to see the value of its equity wiped out as part of a major refinancing.
Claret participated in the HCA deal via the private equity arm of US investment bank Merrill Lynch, which co-funded the massive buyout with Kohlberg Kravis Roberts (KKR), Bain Capital and a co-founder of HCA, businessman Thomas Frist.
Claret has €450 million in 27 investments. These include stakes in car-rental group Hertz, the National Pizza Company franchise operator in the US, and the five-star St Regis hotel in Washington DC and maritime communications group Blue Ocean Wireless.
It wrote off €2 million on its investment in Irish TV station Channel 6, which is now owned by TV3.
In response to the recession, Claret has laid off a large number of staff in Dublin and closed its US operations.
Tom McAleese, Max Doyle and Brian Maloney all stepped down as directors of Claret last year. The company made a loss of €3.42 million in 2008.
Mr Slattery is currently trying to launch a new aircraft leasing business called Avolon and recently hired a number of senior executives from RBS to help with that plan.
On Friday, HCA said it expects it full-year 2009 revenues to be $30.1 billion compared with $28.3 billion for the previous year.
Its adjusted earnings before interest, tax, depreciation and amortisation are expected to be about $5.5 billion compared to $4.6 billion for 2008.
Based in Nashville, HCA owns and operates 163 hospitals and 105 freestanding surgeries in 20 US states and London.
The Irish Examiner reports that the cost of some of the most commonly-prescribed medicines has been slashed by 40% from today.
Patients could make significant savings as a result of prices being cut on almost 300 well-known branded medicines, according to the Irish Pharmaceutical Healthcare Association (IPHA).
It claims the industry has cut prices in order to reduce the state’s medical bill by €94 million over the next 12 months.
Brian Murphy, IPHA’s director of commercial affairs, said they had been asked by Health Minister Mary Harney late last year to create immediate savings on the State’s medicine bill.
"Recognising the difficult position of the Irish economy and the tough decisions facing the Irish Government, our member companies were willing to play their part in helping to reduce costs and prices," he said.
Mr Murphy said the industry had also reduced the price of medicines by up to 35% as they had gone off patent since September 2006.
"So we have already been making substantial contributions to the State and have now extended it this year," he said.
The IPHA has established a website, www.checkthelist.ie, so patients can check if their medicines are listed, and the price reduction. A lo-call number – 1890 876 700, has also been set up.
"We would urge patients to check the website as those who have to pay for their medicines could save €3 to €4 on every €10 they spend. That’s a potential saving of €500 a year," said Mr Murphy.
"The patients who will benefit are those who will pay part or all of the bill themselves. Medical card patients get their medicines free of charge but the State will not have to pay as much for them," he pointed out.
IPHA members will also pay an increased rebate to the HSE in respect of the manufacturer’s price on all other medicines dispensed under all of the community drug schemes.
The Irish Pharmacy Union (IPU) said the lower medicine prices was good news for patients, particularly those who do not qualify for a medical card.
IPU president Liz Hoctor said pharmacists have been repeatedly making the point that the cost price of medicines in Ireland was substantially higher than in many other European countries and the move would bring the cost price more in line with that elsewhere.
She complained, however, that pharmacists were not able to purchase medicines at the new lower prices in advance of today’s date and that drugs purchased at the high prices would now be paid for by the HSE at the new lower rate.
Mr Murphy said pharmacists were unlikely to suffer financial loss as they had known about the price reduction for some time and knew for 10 days the exact products involved.
"I would be very surprised if they have any level of stocks of products left because they will be able to get fresh stocks from their wholesalers up to three times tomorrow so there should not be any significant problem in that regard," he said.
The Financial Times reports that Greece will be told this week to cut public sector wages and improve tax collection under a European Union initiative to prevent its financial troubles from destabilising the eurozone.
The European Commission will recommend on Wednesday that Greece’s socialist government should “cut average nominal wages, including in central government, local governments, state agencies and other public institutions”, according to a draft proposal.
It comes as François Fillon, the French premier, outlined plans in an interview in Le Figaro newspaper over the weekend to tackle his country’s budget deficit, and concerns about Portugal, which disturbed financial markets last week by disclosing that its 2009 deficit was higher than expected at 9.3 per cent of gross domestic product.
Greece is battling to regain the confidence of markets after being condemned by the Commission for falsifying public finances data and concealing its deficit size. Its finance ministry insisted over the weekend that there was “no possibility of the [stability] plan being rejected” by the European Commission.
The Greek parliament approved a 2010 budget in December that George Papandreou, prime minister, described as the most stringent since the return to democracy in 1974. Athens has also submitted a three-year plan to Brussels that foresees a reduction of the deficit to less than 3 per cent of GDP by the end of 2012 from an estimated 12.7 per cent last year.
EU policymakers have welcomed the broad thrust of the Greek measures, but the Commission and other eurozone governments are not convinced they will be enough.
The Commission is expected to recommend that Greece should crack down on tax evasion and possibly introduce a tax on luxury goods.
The Commission’s recommendations will be passed to eurozone and EU finance ministers for approval on February 15-16, and Greece will have four months to show it is putting the measures into practice.
If it is judged not to have done so, the other 15 eurozone governments could under EU law impose financial sanctions. No country has been subjected to such punishment since the euro’s birth in 1999.
The Commission also wants to give Eurostat, the EU’s statistical agency, the power to audit the accounts of member states – specifically, those of Greece – but a formal legislative proposal is not expected as early as this week.
Other EU governments are adamant in public that they will not provide financial aid to Greece, but it is tacitly acknowledged in Brussels that assistance would be provided if Greece’s debt crisis overwhelmed the government.
The Greek government is bracing for a surge in public unrest over its austerity measures, with trade unions planning two days of strikes and protests on February 10-11.
Greek farmers on Sunday resumed their tractor blockade of a northern border crossings with Bulgaria, an EU neighbour.
As a result some 200 trucks were lined up on the Bulgarian side of the Promachonas crossing, a main route for Bulgarian exports to the EU that has been blocked on and off for two weeks.
The Bulgarian government has complained to the Commission that the farmers’ protest – demanding extra crop subsidies and tax breaks on fuel – is hindering free movement of goods within the EU.
The FT also reports that aerospace executives and the US government reacted with concern on Sunday to a Chinese threat to impose sanctions on American groups involved in a $6.4bn arms deal with Taiwan.
Giovanni Bisignani, director-general of the International Air Transport Association, the global airline industry body, called for fresh talks between Beijing and Washington to avert a crisis over the arms package.
“At a moment in which the world is in crisis [and] China is playing a very important role in overcoming and pushing for recovery it would be a very, very difficult and unhappy situation” for sanctions to be imposed, he said, as industry leaders gathered in Singapore for Asia’s biggest air show.
The deal, to which the Obama administration gave the green light last week, includes 60 Black Hawk helicopters, 114 Patriot missiles and systems supplied by Boeing, United Technologies, Lockheed Martin and Raytheon.
The move implemented a pledge by George W. Bush, former US president, in 2001 – and omits some technologies sought by Taiwan, such as F16 fighters. But it comes after tension has risen between Washington and Beijing on issues such as the dispute over cyberattacks on Google, and a Chinese missile test.
In comments quoted by the official Xinhua news service, Yang Jiechi, foreign minister, called on the US to “truly respect China’s core interest and major concerns, and immediately rescind the mistaken decision ... to avoid damaging broader China-US relations”.
The Chinese foreign ministry, which called in Jon Huntsman, the US ambassador, also said it would partially halt military exchange programmes and vice-ministerial talks on strategic security and arms control.
“We regret that the Chinese side has curtailed military-to-military and other security-related exchanges,” said a US state department official.
A senior aerospace executive with knowledge of the situation said China was clearly “flexing its muscles” and that the sanctions threat would be felt most by Boeing, as the main overseas supplier of civil aircraft to China over the last decade. Beijing manages aircraft purchasing centrally and political factors have played a role in the past.
Boeing, which warned on Friday that it expects revenue to fall this year, estimates China will need 3,770 new aircraft – worth up to $400bn – by 2028.
Over the past three years Boeing has derived about 4 per cent of its total revenues from China.
It declined to comment on Sunday, but is understood to be watching developments closely.
Airbus, which has commercial aircraft operations in China but no defence business, also declined to comment.
Chinese media and bloggers have recently opened debate about other avenues of retaliation against US arms sales to Taiwan. The latest package gives China an excuse to step up its own arms modernisation programme including missile tests, said Jin Canrong, an international relations expert at Renmin University in Beijing.
The New York Times reports that the additional tax cuts and public works spending that President Obama has proposed to spur job creation would add $100 billion to this year’s deficit, bringing it to nearly $1.6 trillion, according to an administration official.
A deficit of that size for the fiscal year that ends Sept. 30 would be about $150 billion greater than last year’s deficit, which was the highest since World War II.
Measured against the size of the economy, a $1.6 trillion shortfall would equal almost 11 percent of the gross domestic product. Economists generally consider annual deficits above 3 percent to be unsustainable.
Last week, the nonpartisan Congressional Budget Office projected that this year’s deficit would be more than $1.3 trillion without further spending or tax cuts. Mr. Obama’s proposed $100 billion stimulus package, which includes tax credits for small businesses that make new hires and money for infrastructure projects, is less than a $154 billion package that the House approved in December but more than a measure the Senate is drafting.
The administration’s projection of its deficit for this year came as Mr. Obama prepared to release on Monday his budget for the 2011 fiscal year, which begins Oct. 1, and for the remainder of the decade.
The president and his budget director, Peter R. Orszag, have signaled in recent weeks that the budget, after this year, will show the government on a path to lower deficits because of a combination of renewed economic growth and Mr. Obama’s proposals for increasing tax revenues and cutting spending.
The president’s shift from stimulus spending to deficit reduction in his new budget for the 2011 to 2020 fiscal years assumes that the economy will have fully recovered from the worst recession in eight decades.
It will rely on projections of higher tax collections from revived businesses and workers, and less spending for unemployment compensation and other safety-net programs for those out of work.
Budgets for 2011 and beyond also would save hundreds of billions of dollars by letting the Bush-era tax cuts for households that have annual incomes above $250,000 expire this year as scheduled. Mr. Obama’s proposed tax on big banks, intended to recoup any losses from the financial bailout program, would collect at least $90 billion over a decade.
An additional $250 billion would be saved by freezing for three years the overall spending for a portion of the domestic budget, and by holding that spending to the rate of inflation in subsequent years — a level of austerity that has no modern precedent in Washington. Medicare, Medicaid and Social Security — the so-called entitlement programs that are the largest and fastest-growing part of the budget — would be exempted, along with defense and veterans programs.
The spending freeze is not an across-the-board cut, an approach that Mr. Obama opposed in his presidential campaign when his Republican rival, Senator John McCain, Republican of Arizona, proposed it. Instead, officials said, they have taken “a scalpel” to cut or eliminate more than 120 programs, while increasing money for priorities — chiefly education, research and energy programs — to save about $20 billion in the 2011 fiscal year.
Mr. Obama’s budget for the coming fiscal year would total $3.8 trillion. Just $1.4 trillion is domestic and military spending that he and Congress directly control through annual appropriations; the rest is mostly automatic spending for Medicare, Medicaid and Social Security and interest on debt of $12.4 trillion.
In an unusual accompaniment to the budget that underscores the dire fiscal outlook, Mr. Obama will direct a bipartisan commission to recommend a plan to balance the budget, not counting growing payments on the country’s amassed debt, by the 2015 fiscal year. Congressional Democratic leaders have committed to holding a vote in December on whatever plan such a commission produces.
The NYT also reports that the 911 call came at 6:35 p.m. on Aug. 28 from a car that was speeding out of control on Highway 125 near San Diego.
The caller, a male voice, was panic-stricken: “We’re in a Lexus ... we’re going north on 125 and our accelerator is stuck ... we’re in trouble ... there’s no brakes ... we’re approaching the intersection ... hold on ... hold on and pray ... pray ...”
The call ended with the sound of a crash.
The Lexus ES 350 sedan, made by Toyota, had hit a sport utility vehicle, careened through a fence, rolled over and burst into flames. All four people inside were killed: the driver, Mark Saylor, an off-duty California Highway Patrol officer, and his wife, daughter and brother-in-law.
It was the tragedy that forced Toyota, which had received more than 2,000 complaints of unintended acceleration, to step up its own inquiry, after going through multiple government investigations since 2002.
Yet only last week did the company finally appear to come to terms with the scope of the problem — after expanding a series of recalls to cover millions of vehicles around the world, incalculable damage to its once-stellar reputation for quality and calls for Congressional hearings.
With prodding from the National Highway Traffic Safety Administration, Toyota halted production and sales of eight models, including its top-selling Camry sedan.
And late last week, the government allowed the company to go ahead to try yet another new fix for its vehicles, which it is expected to announce on Monday.
At almost every step that led to its current predicament, Toyota underestimated the severity of the sudden-acceleration problem affecting its most popular cars. It went from discounting early reports of problems to overconfidently announcing diagnoses and insufficient fixes.
As recently as the fall, Toyota was still saying it was confident that loose floor mats were the sole cause of any sudden acceleration, issuing an advisory to millions of Toyota owners to remove them. The company said on Nov. 2 that “there is no evidence to support” any other conclusion, and added that its claim was backed up by the federal traffic safety agency.
But, in fact, the agency had not signed on to the explanation, and it issued a sharp rebuke. Toyota’s statement was “misleading and inaccurate,” the agency said. “This matter is not closed.”
The effect on Toyota’s business is already being felt. Its sales in the United States in January are expected to drop 11 percent from a year earlier, and its market share in the United States is likely to fall to its lowest point since 2006, according to Edmunds.com, an automotive research Web site.
The company has not yet projected the cost of its recalls and lost sales. But a prolonged slowdown in sales could substantially hurt a company that once minted profit.
Toyota’s handling of the problem is a story of how a long-trusted carmaker lost sight of one of its bedrock principles.
In Toyota lore, the ultimate symbol of the company’s attention to detail is the “andon cord,” a rope that workers on the assembly line can pull if something is wrong, immediately shutting down the entire line. The point is to fix a small problem before it becomes a larger one.
But in the broadest sense, Toyota itself failed to pull the andon cord on this issue, and treated a growing safety issue as a minor glitch — a point the company’s executives are now acknowledging in a series of humbling apologies.
“Every day is a lesson and there is something to be learned,” Yoshimi Inaba, Toyota’s top executive in North America, said at the Detroit auto show in January. “This was a hard lesson.”
In Davos, Switzerland, on Friday, Akio Toyoda, the grandson of Toyota’s founder who now heads the company, told a Japanese broadcaster that he was “deeply sorry” for the problems.
Toyota’s safety problems may prove to be a hard lesson for the N.H.T.S.A., as well. Six separate investigations were conducted by the agency into consumer complaints of unintended acceleration, and none of them found defects in Toyotas other than unsecured floor mats.
In at least three cases, the agency denied petitions for further investigative action because it did not see a pattern of defects and because of a “need to allocate and prioritize N.H.T.S.A.’s limited resources” elsewhere, according to agency documents.
The investigations, and Toyota’s handling of the problem, will be the subject of Congressional hearings.
But the publicity surrounding the accident near San Diego, and Toyota’s repeated inability to quell consumer concerns with a definitive solution, has also prompted a flood of lawsuits reminiscent of the litigation a decade ago arising out of the rollovers of Ford Explorers equipped with Firestone tires.
In addition to cases related to individual accidents, several class-action suits have been filed against Toyota. The cases are expected to focus on why the government and the carmaker were unable to identify problems beyond the floor mats, despite mounting instances of runaway cars.
David Ennis, a Washington lawyer, said he was working on three lawsuits that had been in the works for five months. “Over the last 24 hours, everybody’s a Toyota lawyer now,” he said last week.
Toyota now believes that the trouble with its cars is twofold — a combination of loose floor mats that can interfere with accelerator pedals, and a pedal that itself can stick when a driver depresses it.
Toyota has told its dealers that it will announce its fix for the faulty accelerators on Monday, but has yet to release details. The CTS Corporation, the supplier of the pedals used in recalled models, is making replacement parts. But Toyota is also expected to try to repair or modify the pedals in some vehicles.
Before last August, Toyota had issued three limited recalls to replace floor mats and change an interior part that could catch on accelerator pedals.
But after the fatal crash near San Diego, and the public release of the 911 tape, Toyota was forced to, as it said in the fall, “take a closer look.”
That crash, said Clarence M. Ditlow, executive director of the Center for Auto Safety in Washington, “was a watershed event.”
“It captured on tape the deaths of four people in an uncontrolled acceleration where the driver was an experienced highway patrol officer,” he said. “If he couldn’t bring the car under control, who could?”
A lawyer for the Saylor family said he wished that the federal government had acted more quickly about concerns over the sudden acceleration.
“They’re clearly starting to become more interested in the problem and more attentive to it,” said the lawyer, John Gomez, of San Diego. “Do I wish they would have done more sooner? Obviously.”
In one federal inquiry on Toyota models built from 2002 to 2005, investigators found that 20 percent of the 432 complaints studied involved “sudden or unintended acceleration.”
But no defects were uncovered in any of the vehicles, and the rate of incidents was considered “unremarkable” in the context of the millions of cars on the road.
The petitioner in that case, Jordan Ziprin of Phoenix, said the regulators had focused exclusively on mechanical issues with his car, a 2002 Camry.
“I believe this is an electronic issue, but they have been avoiding that possibility entirely,” Mr. Ziprin said in an interview.
Several lawsuits against Toyota also suggest that the company’s electronic system could be at fault.
A Toyota spokesman said the company had looked extensively at its computerized electronic throttle system, which controls the speed of its cars, and had found no faults.
“If we found anything, we would take appropriate action,” said the spokesman, Mike Michels. “But we continue to think it’s entirely unlikely that an electronic malfunction is the cause.”
A lawyer for a California man whose wife died in a 2007 crash of a Camry said the company was avoiding a potentially more pervasive problem by focusing on mats and stuck pedals, rather than its electronics.
“There are thousands of these complaints, and we’re not seeing floor mats and we’re not seeing stuck throttles,” said the lawyer, Donald H. Slavik, of Milwaukee. The traffic safety agency “simply doesn’t have the resources to analyze the electronic systems of these cars.”
The agency, which is part of the Transportation Department, has stepped up its oversight of Toyota drastically since the fatal accident that involved the Saylor family.
Agency officials, who spoke on the condition of anonymity because the case was still being investigated, say their responsibility is to identify defects in autos, not to develop remedies to fix them. That responsibility, these officials said, rests with the automaker.
Many complaints by consumers were eliminated by the agency during its investigations because of possible driver error, or the lack of sufficient information about the circumstances of the incidents.
The agency separated braking problems from acceleration issues, further narrowing the number of complaints that could be linked to a faulty pedal or an electronic malfunction. Cases involving brief periods of acceleration were also considered separately from those that involved prolonged, high-speed incidents, many of which involved accidents.
Sean Kane, whose consulting firm, Safety Research and Strategies, counts plaintiffs’ lawyers among its clients, contends that the agency did not push Toyota for more data, and too quickly accepted the company’s explanations about floor-mat problems.
“The agency has not been very forceful with Toyota at all,” Mr. Kane said. The agency “always took the low-hanging fruit for an explanation, which is the floor mat.”
The discussions between federal officials and Toyota intensified in December, when the acting chief of the agency, Ronald Medford, flew to Japan to hold meetings with senior company executives, according to a government official with knowledge of the trip who was not authorized to speak publicly.
On Jan. 19, two days before the recall for the sudden-acceleration problem, Mr. Inaba of Toyota met in Washington with Mr. Medford and the new head of the agency, David Strickland.
The mounting number of complaints and accidents has led the agency to be more outspoken than it usually is during continuing investigations.
Last week, the transportation secretary, Ray LaHood, said in an interview with a Chicago radio station that Toyota had halted production of recalled vehicles “because we asked them to.”
Indeed, Toyota had to be told by regulators to shut down production and suspend sales of the cars and trucks in the latest recall until it had the parts necessary to fix them. It was yet another example of a slow response from a company long known for its meticulous approach to building cars and servicing customers.
Mr. Michels, the Toyota spokesman, said the company never before had to halt production or stop selling millions of vehicles involved in a recall.
“It’s not a typical case,” he said. “Usually in a ‘stop sale’ it’s a very small quantity.”
In its attempts to play down the problem, Toyota may have raised more doubts among consumers.
“It thinks it can control this crisis, and in the process has thrown its own credibility out the window,” said Mr. Kane, the safety consultant whose firm has documented thousands of reports of unintended acceleration.
Some owners of recalled Toyotas are now saying they are afraid to drive them. “I live only a half mile from the office and I drive there,” said Elaine Byrnes, a Camry owner in Los Angeles. “If I had to go farther, I wouldn’t consider it.”
And the scrutiny of Toyotas will not end with its new plan to replace the pedals. Accidents are receiving swift attention from federal regulators.
On Dec. 26, a 2008 Toyota Avalon — one of the cars under recall — crashed just outside of Dallas. A police officer in Southlake, Tex., Roderick Page, said in an interview that “for undetermined reasons, the vehicle left the main roadway, and went through a metal pipe fence, striking a tree and causing the vehicle to flip and land upside down in a pond.”
All four people in the car died. “There was no evidence that they attempted to hit the brake or slow down,” he said. “Honestly, my reaction is, ‘Wow.’ ”
Two weeks later, an investigator from the National Highway Traffic Safety Administration visited Southlake to inspect the car, accompanied by a Toyota engineer. Mr. Page said one factor they immediately ruled out was the floor mats, which were in the trunk.
