Toyota Update


It’s time to update my earlier blog on the Toyota situation. By now we’re all familiar with James Sikes, the California driver who alleged uncontrollable acceleration with his Toyota Prius.

I was highly suspicious of Sikes when I first heard the story. The setup was just too clean—nobody else in the car, acceleration on a relatively open stretch of road, his inability to shift the car into neutral, and a Toyota dealer that supposedly “turned him away” when he requested a fix several days earlier. I hesitated then (and still do now) to say that he fabricated the incident. I don’t know for sure, but I’d certainly bet on it, and I rarely gamble.

This case might seem déjà vu to some of you. The 1986 Audi sudden-acceleration scare turned out to be baseless. Audi, however, suffered staggering sales declines during the period because of the hype.

The number of formal complaints to the NHTSA about uncontrollable acceleration has skyrocketed since Transportation Secretary Ray LaHood targeted Toyota for national disgrace a few months ago. In other words, dozens of cars that have been driven for months or years without incident now accelerate on their own. Unless we believe that the cars are responding to our government’s desire for turmoil at Toyota, then we must conclude that most of these claims are probably unfounded.

The feeding frenzy on Toyota is in full swing. Dana and Douglas Weller of Seattle are now suing Toyota for excessive depreciation of their 2009 RAV4. Following that logic, homeowners should be able to sue Congress for excessive housing depreciation as well.

What role has our government played in this scandal? A big one. Before all’s said and done, Toyota will suffer massive losses in sales and its brand image far beyond what the market would have dealt out without LaHood’s intervention. Opportunists in our country know they will find a sympathetic government if they join the bandwagon of complaints against this evil company whose greatest sin has been to produce affordable, quality vehicles without union control.

Toyota recently issued a statement challenging Sikes’ claims. Sikes, however, says he “just wants to be left alone.” I’m happy to see Toyota fighting back. If I ran the company, I’d give Sikes two choices—retract his story or face a defamation lawsuit from Toyota. Sikes’ story has contributed to massive losses for the company. If he’s right, then Toyota should bear the responsibility. If not, then the company has every right to set the record straight.

Unfortunately, this is what you get when our government owns major stakes of two failing competitors. LaHood and others have a perverse incentive to beat down Toyota, Honda, Nissan, and the rest of the pack. Let this be a lesson. If you don’t like government bullying, then consider what would happen to private insurance companies if healthcare reform included a “public option?”



  1. Thompson  •  Mar 17, 2010 @7:27 PM

    Public option would be the same thing. The feds would harass the insurance companies into bankruptcy.

  2. Barnett  •  Mar 18, 2010 @9:57 AM

    It’s amazing how many people I talk to can’t connect the dots here. They complain about their Toyotas like Ray LaHood is the hero. He doesn’t have to answer to anyone. If he screws up, he just blames more on Toyota and demands more funding.

  3. John Parnell  •  Mar 19, 2010 @11:10 AM

    UPDATE: It looks like another alleged runaway Prius was a ruse as well…–Human-error-caused-Prius-crash