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Toyota dealers rally in defense of brand

By Mary Grace Lucas, CNN
Toyota dealership owners rallied in Washington Tuesday as Congress opened hearings into recent vehicle recalls.
Toyota dealership owners rallied in Washington Tuesday as Congress opened hearings into recent vehicle recalls.
STORY HIGHLIGHTS
  • Chairman of a national dealers group asks how Toyota became a "villain" overnight
  • Congressman: Toyota boasted of saving $100 million by avoiding a more extensive recall
  • More bad news for Toyota not good for the company's U.S. employees, says dealer

Washington (CNN) -- More than 100 Toyota dealership owners and staff rallied on Capitol Hill Tuesday to defend their businesses and Toyota as Congress opened high-profile hearings into recent large-scale vehicle recalls.

"We take great pride in the fact that as of last night, together we've done over 690,000 recalls already and are pacing at 50,000 a day throughout the United States," Paul Atkinson, chairman of the Toyota National Dealer Council, said to the crowd. "My question for you is: How did we suddenly overnight become the villain?"

Toyota has recalled more than 8 million vehicles in connection with possible unintended acceleration. Separately, the 2010 Toyota Prius was the subject of a recall due to complaints about its brakes. Even with Toyota's long-time reputation for brand loyalty among consumers, dealers have seen sales plunge and continue to field phone calls from concerned drivers.

"I had customers calling me as soon as the news hit. And I didn't know more than they did. How do you think that feels answering the phone?" said Susan Scarola, president and CEO of DCH Auto Group. "[Dealerships] would do anything to service our customers and make sure they're safe. And instead, the news came from all over the place. Now is that Toyota's fault? I don't know whose fault it is. But I know there was a much more productive way to handle this than what's happened in the past 30 days."

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The first of three congressional hearings on Toyota's recall problems began Tuesday in the House Oversight and Investigations subcommittee. Chairman Bart Stupak, D-Michigan, has said his panel's preliminary review of 75,000 pages of Toyota's internal company documents raised significant concerns. In particular, Toyota boasted of saving $100 million by dodging a more extensive recall of the Toyota Camry and Lexus.

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Tamara Darvish of Darcars Automotive was quick to point out more bad news for Toyota could mean more bad news for their network of 172,000 employees in the United States.

Atkinson noted that, in the wake of last year's bailout of General Motors and Chrysler, they're now in competition with government-backed automakers for market share.

Asked if he thought that the U.S. government was promoting General Motors, Atkinson didn't mince words.

"They were the first to come with the program where they offered a Toyota customer a $1,000 incentive to trade in their Toyota product at a GM plant. Yes, they were the first that did that. Now several other manufacturers have followed," Atkinson said. "That's pretty tough. And one of the things we've got to do is we've got to get government out of our business."

But a message of optimism also was a recurring theme at Tuesday's rally. AutoNation President and CEO Mike Jackson said he believes the drop in sales was largely due to the fact that many vehicles were taken off the market until they were repaired. He does not expect the brand to suffer in the long term.

"What's fascinating about the American people is that if they see a company that's done it right for decades, but has a bad moment and makes a mistake and owns up to it and commits to change and does everything possible to make it right, the American people will understand and forgive," he said.

CNNMoney's Hibah Yousuf contributed to this report.