Toyota to Pay Dealers for Extra Work from Recall

Toyota Motor (TM) is accelerating payments to its 1,200 U.S. dealers for their efforts to help soothe rattled owners of some 2.3 million Toyota cars that have been recalled for unintended acceleration. The company's U.S. sales division will provide payments of $7,500 to $75,000 to help reimburse retailers for extended hours, car washes and other services, the Associated Press has reported.The checks, the amount of which is based on the on number of cars each dealer sold last year, are being issued this week, AP reported, citing a memo it obtained. Dealerships that sold fewer than 500 cars will get $7,500, while those that sold more than 4,000 will get $75,000. In the letter, Toyota group vice president Bob Carter thanks dealers for the services, saying the payments will help with those measures.

The news followed what has been one of the worst days for Toyota since announcing the recall last month, after Transportation Secretary Ray LaHood said owners of the affected should stop driving them. LaHood quickly took back the words, saying he misspoke. LaHood advised owners to bring their vehicles to dealers if they were concerned. "What I meant to say or what I thought I said was, if you own one of these cars or if you're in doubt, take it to the dealer and they're going to fix it," LaHood said.

Prius Troubles Too

The transportation secretary's bungled comments weren't the only news to rock Toyota on Wednesday after it was reported the National Highway Traffic Safety Administration is looking into some 100 complaints involving the braking systems on popular Prius hybrid cars. Owners described a sensation of insufficient braking when driving over bumpy or frozen roads, Reuters reported. Two crashes involving injuries have been attributed to the brake problems.

Possible Prius braking woes can only add more fodder to the criticism many have voiced in recent weeks that the world's No. 1 automaker has taken its eye off quality in pursuit of sales. In addition to recalling eight popular models, Toyota halted sales and production of the vehicles until a fix could be fashioned. The recall and stoppages have taken a toll on showroom traffic. Toyota reported Tuesday that January sales fell 16% from January 2009. But compared to December 2009 sales, Toyota fared even worse, falling nearly 47%.

On Monday, the company announced it was shipping parts to dealers this week to fix the gas-pedal problem. Many dealers will stay open extended hours, some around the clock, to repair the cars, the company said. The "simple" repair involves installing a steel reinforcement bar to prevent friction between accelerator parts. The federal government approved the plan last week.

In addition to the recall of 2.3 million cars for sticky accelerators, which has been broadened to include models sold in Europe and China, Toyota has also recalled 5.4 million cars that suffer from a similar unintended acceleration problem caused by floor mats.
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