President of Toyota USA on Sticking Accelerator Repair Efforts

This is a rush transcript from "Your World With Neil Cavuto," February 1, 2010. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right, well a fix, but not a quick fix.

Toyota Motor says that it has figured how to repair all of those sticky accelerators in millions of its cars. But it won’t come easy, and, for Toyota, it won’t come cheap. It means reinforcing the entire pedal assembly, something so involved, it has to specially train its technicians how to do it. With me now is James Lentz. He is Toyota’s top guy here in the U.S.

Mr. Lentz, good to have you.

JAMES LENTZ, PRESIDENT AND CHIEF OPERATING OFFICER, TOYOTA USA: Thank you.

CAVUTO: Where does this stand right now? This is pretty involved.

LENTZ: It’s pretty involved.

The good news is, we very quickly in this case determined what the situation was, developed a fix. And that fix is now being shipped to dealers. Dealers will start receiving these precision pieces of plate starting probably about Tuesday or Wednesday. And we expect them to have them installing in consumer cars by Thursday or Friday.

CAVUTO: Now, for the folks for whom you are going to cover these repairs, a lot of them might come back to and say, well, I haven’t been able to drive. I have had to rent a car all this time.

Will you compensate them for that?

LENTZ: Well, not necessarily. I mean, if they have had an issue where they actually had have a pedal start to stick, we have brought those cars back to the dealerships and put them in rental cars.

This sticky pedal is very, very rare, and it comes on over time. So, it’s not something that one day you get in your car and you start to have a throttle that starts to stick. It may be slow to respond, to come back. Eventually, it may start to be a little bit sticky or a little bit rough.

CAVUTO: What happened? It started with the floor mats being in question, that it would block the pedal, or...

LENTZ: Right.

CAVUTO: And that seemed feasible. But then it grew into this thing.

LENTZ: Yes.

CAVUTO: How bad is this?

LENTZ: Well, this is a totally separate situation. Both can result in a car accelerating when a customer doesn’t want it to. So, they are both serious safety issues that we are addressing. But this is a very different situation, very, very rare. Both are rare cases. But we’re stepping up to it.

CAVUTO: We knew there were a number of fatalities as a result of this. You addressed it after the fatalities. But was — was there a serious enough issue, that it warranted eventually shelving half your fleet or stopping it to address this? It had to be pretty bad.

LENTZ: Well, we — we felt it was a safety issue. So, we felt it was important now...

(CROSSTALK)

CAVUTO: But at what point did you become convinced it was?

LENTZ: Well, we started investigating this last October. And to not confuse the two recall issues, the entrapped floor mats have had accidents, injuries and deaths. This has not. This — we don’t...

CAVUTO: But this was discovered post the floor mat thing?

LENTZ: This was discovered post-floor mat.

So, in late October, we had three vehicles that were brought into dealerships for the very first time that we could duplicate this issue. So, from October, we investigated, found out that it, in fact, was an issue, was not an isolated issue — instance.

We put the vehicles on stop-sale. We stopped production. We developed a fix. And now we are taking care of the situation.

CAVUTO: But now a lot of folks are Toyota lovers and recognize you for quality and all. They might think the better part of valor is just to go elsewhere, right? Are you worried?

LENTZ: We are always worried.

CAVUTO: Right.

LENTZ: But I think we have a lot of goodwill built up with our customers, because, for the last 50 years...

CAVUTO: I know, but something — not your doing, but something like a gas pedal that you can’t control would erase goodwill quick, right?

LENTZ: Well, again, very, very rare, comes on very — over a period of time. The car can be stopped with the brakes. So, it’s a very, very different situation.

CAVUTO: So, why did you take so many models out in the process then?

LENTZ: Because each of these models that we took out had this pedal in it. So there is...

(CROSSTALK)

CAVUTO: So, could it be — I don’t want to be cynical. Could it be a lot more than you’re stating...

LENTZ: No.

CAVUTO: ... a lot more models affected than you’re stating?

LENTZ: No. We know the range.

CAVUTO: That’s a draconian move.

LENTZ: Yes.

Well, it’s draconian, but, again, this is a safety issue. We’re a company that is responsible to our customers for the safety of our drivers. So, it’s –- it’s draconian maybe, but it’s the right move, as was shutting down our production.

Shutting down the production allowed us to divert resources from our plants to our dealerships to take care of these customers that have their cars down. So, it was expensive for us to do, but it is the right thing to do for the long-term brand and for our customers.

CAVUTO: In the meantime, GM, Ford, Chrysler here could benefit, your Japanese competitors. Honda benefits. What do you make of that?

LENTZ: Well, they are going to do what they are going to do.

I think, in the long run, we have a fairly large reservoir built up with our customers through 50 years of building quality products. And if we have a problem — and we have had problems in the past — we step up to it. We take care of the customers. Our customers know that.

CAVUTO: All right. We will watch it very closely.

James Lentz, thank you very, very much.

LENTZ: Thank you.

CAVUTO: I think you’re slightly busy these days.

LENTZ: Sorry, no cake.

CAVUTO: That’s OK. That’s OK. Maybe a Yodel, something like that.

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