Fallout grows in Toyota sales halt

David Shepardson / Detroit News Washington Bureau

Washington -- The fallout continued to mount today from Toyota's announcement Tuesday that it is halting the sale of eight models because of potential safety hazards, and safety regulators stepped up a probe of faulty pedals.

General Motors Co. said it will offer incentives to try to lure Toyota customers. And major rental cars company pulled the affected models from their fleets.

"Beginning today, GM dealers will be able to offer Toyota customers a purchase incentive for a Chevrolet, Buick, GMC and Cadillac vehicle," GM said in a statement.

"We decided to make this offer after receiving many emails and calls from our dealers, who have been approached by Toyota customers asking for help. Such 'conquest' incentives are used commonly in the industry."

GM is offering zero percent financing for up to 60 months to customers who trade in a Toyota for a new GM vehicle. GM also is offering to make as many as three payments, for a total of up to $1,000, for Toyota lease customers. GM also is offering $1,000 discounts to cash buyers.

The program will run through February.

Ford Motor Co. said today it has no plans to offer incentives to Toyota customers. Chrysler Group LLC has not decided whether to initiate incentives.

Avis-Budget Group said it is removing about 20,000 recalled Toyota vehicles from its fleet. And Enterprise Holdings said it is removing all Toyota and Pontiac Vibe vehicles, lumped into the recall, from its Alamo Rent A Car, Enterprise Rent-A-Car and National Car Rental chains.

"In light of the safety concerns being raised about Toyota vehicles, we are taking the precaution of removing all of the approximately 20,000 cars that Toyota has identified for recall from our fleet in the United States, Canada and Puerto Rico," the company said in a statement today.

Federal auto safety regulators said today that Toyota was legally required to stop selling the eight models it recalled last week.

Toyota took the extraordinary step of halting the sale of the vehicles late Tuesday over issues of "sticky acceleration pedals" because it hasn't yet found a fix. Those eight models accounted for nearly 60 percent of its U.S. sales last year. Toyota has been looking at the issue of sticky pedals since 2007.

The new administrator of the National Highway Traffic Safety Administration, David Strickland, said today Toyota's decision to halt sales "was an aggressive one and was the legally and morally correct thing to do.

Transportation Secretary Ray LaHood told Chicago radio station WGN that the government asked Toyota to stop selling the vehicles.

LaHood said, "The reason Toyota decided to do the recall and to stop manufacturing was because we asked them to."

A Toyota spokesman, Mike Michels, said Tuesday the automaker expects to have a remedy in "weeks, not months."

Officials said NHTSA first contacted Toyota Friday, after seeing news reports of Toyota's plans to continue selling defective vehicles.

It wasn't until around noon on Tuesday that Toyota informed safety regulators it would halt sales.

Under Chapter 301 of the Motor Safety Code, Toyota can't continue to sell the defective vehicles unless it has a remedy.

The Detroit News has learned that NHTSA is also investigating whether the defective pedals in the Toyota recall, made by Elkhart, Ind.-based auto supplier CTS Corp., are on any other automaker's vehicles. CTS didn't immediately respond to a request seeking comment.

The NHTSA's Strickland declined to discuss the chain of events in detail.

"At this point, you need to talk to Toyota about those decisions," he said. "We'll be continuing to work with Toyota and having conversations."

Strickland said in taking the action "Toyota was complying with the law."

"They consulted with the agency. We informed them of the obligations, and they complied," he said.

Last Thursday, Toyota recalled 2.3 million vehicles after two recent incidents in New Jersey and Texas were under investigation by NHTSA, making the decision to recall the vehicles without figuring out how to fix the problem.

But Toyota had a legal requirement to stop selling the models. It isn't clear why Toyota continued to sell the models for another five days.

Toyota faces further questions because similar pedals that are at issue in the United States are on some vehicles in Europe. The automaker hasn't decided what it will do in Europe. Beginning in December 2008, Toyota received complaints in Europe about the sticky accelerator pedals on its Aygo and Yaris vehicles.

The vehicles that Toyota told its dealers to stop selling in North America are:

• 2009-10 RAV4

• 2009-10 Corolla

• 2009-10 Matrix

• 2005-10 Avalon

• Certain 2007-10 Camry

• 2010 Highlander

• 2007-10 Tundra

• 2008-10 Sequoia

Toyota had been aware of issues with the pedals for more than two years but in June 2008 declared reports of sticky pedals were a "drivability," rather than a safety, issue.

As part of the halt in sales, Toyota will halt production at five North American assembly plants, and reduce production at an engine plant in Alabama.

dshepardson@detnews.com (202) 662-8735