Toyota Prepares for Capitol Hill Battle - TheStreet

Toyota Prepares for Capitol Hill Battle

Toyota will get its best shot to present the facts and mend its broken image in congressional hearings later this month.
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WASHINGTON (

TheStreet

) --

Toyota

(TM) - Get Report

has a case to make, and so far it has not done much of a job making it.

But that may be changing. Toyota dealers and workers are in Washington, seeking to lobby members of Congress, which later this month will conduct two critical hearings on the automaker's problems. The effort has been hampered by a scarcity of legislators, kept away by snowy weather.

At the moment, Toyota is a company in crisis: Each day brings bad news. Toyota's response has included a news conference and heavy advertising, but the truth is that its best shot to regain control of its image will occur at the hearings. Sure, congressional hearings are primarily a forum for political grandstanding. Companies hate them. But they are closely watched and widely analyzed, largely because they force executives to directly confront the questions that concern the public.

Among the facts that Congress is hearing from Toyota workers: Toyota employs 31,000 U.S. workers. Counting its U.S. suppliers, it enables about 200,000 U.S. jobs. Its history, obviously, is not the history of

Ford

(F) - Get Report

or

General Motors

, but "we are an American company," said Tim Turner, a team leader at the company's Georgetown, Ky., plant. "We are an American company with a Japanese heritage."

Added Alesia Murdock, a team leader at the Buffalo, W. Va., plant: "I just wanted to come here and let them know we take pride in our work

and we will stop the line to make sure we have 100% quality. We've had some problems, but we will bounce back." Murdock was a seamstress before Toyota hired her 11 years ago.

Also making Toyota's case is Washington-area auto dealer Tammy Darvish, vice president and co-owner of Darcars Automotive Group. Since 2005, the firm has sold 53,597 new Toyotas at five Washington area dealerships. Until two weeks ago, not a single customer had every complained about a sticky accelerator.

"All recalls are serious, but there has been a lot of sensationalizing of these particular recalls," said Darvish. "There hasn't been this kind of coverage of a recall since the Firestone incident." The Firestone tire recall followed what may have been the worst auto safety crisis in U.S. history, with more than 100 killed, far beyond the known impact of Toyota's sticky accelerators.

Darcars, a family business with 26 dealerships in the Washington area, sells vehicles made by the Detroit Three as well as by Japanese, European and Korean automakers. Through the dozens of recalls Darvish has seen, "we have never had the kind of communication or the formal training we have received from Toyota," she said.

By and large, Toyota customers are not panicking. "You do get some funny emails, like one about 'six months ago I was driving down the road and my accelerator stuck,'" Darvish said. "But of the thousands of customers we've talked to personally, not one is saying 'I won't drive' or 'I refuse to drive.' " There's concern, but they say 'as long as you take care of it, I'm fine.' "

Another fact in Toyota's favor is that during the past 10 years, Toyota ranks 17th among automakers in the number of complaints per vehicles sold, according to a review by Edmunds.com of the National Highway Traffic Safety Administration database. Toyota, which sold 13.5% of the new cars in the U.S., received 9.1% of the complaints.

Still, in the media, the story looks different, with the end of Toyota -- and possibly the end of Japanese manufacturing -- looming. As one example, the

Tokyo Shimbum

daily recently warned that "the discrediting of Toyota could even destroy the world's trust in Japanese manufacturing, which relies on its reputation for high quality."

For its part, Wall Street is currently in the

optimistic camp. Toyota stock has rebounded since Feb. 4, when it reached $71, the low since April 2009. Shares closed Wednesday at $75.69, up $1.09. But Wall Street is fickle.

No doubt Toyota is studying the November 2008 hearing when the Detroit Three CEOs attended a Senate Banking Committee hearing. It led to three principal results, only one of them anticipated. First, General Motors and

Chrysler

eventually received bailouts. Secondly, the private jet business collapsed after the three executives were lambasted for their method of getting to Washington.

Third, the biggest beneficiary of the hearing was Ford, which did not even seek a bailout. "I was testifying on behalf of my competitors for the good of the auto industry," CEO Alan Mulally said, in a recent interview. Yet the hearing enabled Ford to clearly make the case that it alone did not have its hand out.

That positioning became a key to its ongoing turnaround. Now, "people love us," Mulally said, and Ford is the most of the Detroit three to benefit from Toyota's missteps.

Do you drive one of the cars Toyota recalled? If so, what was your experience, and how has Toyota addressed the issue? Please send me an email here.

-- Written by Ted Reed in Charlotte, N.C.

.