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Toyota Completes U.S. Quality Panel, Resumes Lexus GX SUV Sales

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Toyota Motor Corp.'s 2010 Lexus GX 460
An undated handout photograph shows Toyota Motor Corp.'s 2010 Lexus GX 460 sport utility vehicle (SUV), provided to the media on April 14, 2010. Source: Toyota Motor Corp. via Bloomberg

April 30 (Bloomberg) -- Toyota Motor Corp.’s outside advisers on quality have a free hand examining U.S. operations and won’t be “window dressing” as the automaker works to rebound from record recalls, the panel’s chief said.

Six appointees were named yesterday to the group led by ex-U.S. Transportation Secretary Rodney Slater. They include former Lockheed Martin Corp. Chief Executive Officer Norman Augustine, Patricia Goldman, a former National Transportation Safety Board vice chairman; and Mary Good, engineering and information technology dean at the University of Arkansas at Little Rock.

“They are experts in their fields,” Slater, 55, said in an interview. “I don’t think you could attract that kind of commitment from these people if they thought it was just window dressing.”

Toyota completed the review panel with the new members after recalling more than 8 million vehicles worldwide for flaws including unintended acceleration. The automaker is working to regain a reputation for quality earned with top marks in past years from researchers such as J.D. Power & Associates.

Sales of Toyota’s 2010 Lexus GX 460 sport-utility vehicles resumed yesterday after a recall to adjust stability controls. The automaker took the SUVs off the market on April 14 after Consumer Reports magazine dubbed them a “safety risk” because stability controls didn’t engage fast enough in driving tests.

A repair for the $52,000 luxury SUVs is available at the brand’s U.S. dealers, who began contacting customers April 28, Toyota said in a statement.

Hearings, Fine

The Toyota City, Japan-based automaker has faced congressional hearings this year and last week agreed to pay a record $16.4 million U.S. government fine for delaying a recall.

Panel members have already visited Toyota’s Georgetown, Kentucky, plant and will tour design and testing facilities in Michigan, Arizona and California, Slater said. The panel is to travel to Japan in mid-May, said Slater, who like Toyota declined to give details on panelists’ budget and compensation. Slater was appointed in March.

The group can commission additional studies and hire industry authorities to review potential faults and suggest changes, Slater said. A possible flaw the panel will look at is the company’s internal communications on quality.

“There are some questions about communication and communication flow,” said Slater, who led the Transportation Department under former President Bill Clinton from 1997 to 2001. “We’ve got to get to the bottom of that.”

Quality Advisers

Additional advisers are Roger Martin, dean of the University of Toronto’s Rotman School of Management; Brian O’Neill, retired president of the Insurance Institute for Highway Safety; and Sheila Widnall, a Massachusetts Institute of Technology professor and former Air Force secretary.

Steve St. Angelo, head of Toyota’s Georgetown plant, is leading an internal quality panel investigating potential vehicle defects that will coordinate with Slater’s group.

Toyota officials including Jim Lentz, head of U.S. sales, have been asked to testify again before the House Energy and Commerce Committee on the possible role electronics play in unintended acceleration. That hearing, set for May 6, was postponed yesterday without being rescheduled.

Committee Chairman Henry Waxman, a California Democrat, proposed yesterday that automakers be charged fees to fund new safety regulations. Draft legislation posted to the committee’s website would require cars to have event data recorders and expand regulators’ authority to issue recalls and fines.

The National Highway Traffic Safety Administration would have to create standards for electronics and brake-override technology. The draft of the bill makes regulatory changes Waxman and other lawmakers cited in congressional hearings this year on Toyota’s recalls and NHTSA’s response.

Toyota’s American depositary receipts, which each represent two ordinary shares, rose $1.27, or 1.7 percent, to $78.11 yesterday in New York Stock Exchange composite trading. Toyota’s U.S. sales unit is based in Torrance, California.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net; Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editors responsible for this story: Kae Inoue kinoue@bloomberg.net; Larry Liebert at lliebert@bloomberg.net

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