Toyota's Sales Hit the Skids
PHILLIPS: All right, stocks fell yesterday, halting a two-day rally, and Wednesday's weakness expected to continue today, unfortunately. Alison Kosik in New York with a look at what's worrying investors as we wait -- or I guess we just got the opening bell, right? Do we hear it?</s>ALISON KOSIK, CNN CORRESPONDENT: The opening bell is on the -- right before the opening bell. Stock futures pointing about 80 points lower. That's because of what was happening the overseas market. They tumbled, at least the European market. And then we got the weekly jobs report. That came out and pretty much solidify that we're going to start in the red at the open. And here is what that report said. Listen to this, 487,000 Americans joined the unemployment line last week, and that's the fourth increase in five weeks. Wal-Mart, it's the latest company to cut jobs. The retailer is flashing 300 administrative positives at its Arkansas headquarters. This all comes just one day before the government releases its big monthly jobs report. Some analysts are expecting the report to show. Businesses did some hiring in January, but as we heard from Stephanie earlier in the hour, there is also going to be a huge downward revision to previous job numbers. The government may have actually underestimated job losses between April 2008 and March 2009 by about 1 million. Let's look on the right side a bit for today. Upbeat earnings from Cisco systems could lift the tech sector today. The company reported quarterly profit and revenue that rose for the first time in more than a year. It's a sign that businesses are spending more on technology. Cisco is considered a bellwether indicator of what to expect from other tech companies, and that's why we look so closely at Cisco. Right now, Cisco shares are up almost 2 percent, and we have to encouraging sales numbers from retail stores, but overall right now, we are starting lower. Take a look the Dow and just real found about 72 points, the NASDAQ up about 17. Happy Thursday. We'll see how the markets do all day -- Kyra</s>PHILLIPS: All right. Thanks, Alison. Another day and another hit for the world's largest automaker. Earlier today, Toyota expanded its recall to include its flagship model, the Prius Hybrid. The recall came after Japan's transport ministry ordered the company to investigate complaints of break problems. Meanwhile, safety experts in the U.S. say they are investigating a growing number of complaints that there may be problems with the vehicle's electronics. Toyota owners are worried and frustrated. They're demanding answers. Chief among them, what did the car maker know and when did it know it? Toyota executives may have to answer those questions under oath. CNN's Deb Feyerick explains.</s>DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Driving this road in Flint Michigan. Lilia Alberto is haunted by her mother's last moments. The fear of the 76 year old woman must have felt desperately trying to control her 2005 Toyota Camry as it barreled down a quiet street at 80 miles per hour.</s>LILIA ALBERTO, DAUGHTER OF CRASH VICTIM: And the car went airborne and it was going 80 miles per hour and hit the tree on the top and it just went down. She died instantly.</s>FEYERICK: Guadelope Alberto, by all accounts was an extremely careful driver in good health.</s>ALBERTO: That was the first thing that I knew that something had to be wrong because my mother would never cross a street, because of the two-way traffic.</s>FEYERICK: Witnesses say the car seemed to speed out of control. Nobody knows why. But it fits the pattern of thousands of incidents of unintended acceleration involving Toyota vehicles. After recent state of high profile accidents, Toyota recalled millions of cars, not including the model driven by Guadelope Alberto. They blamed the floor mats and sticky gas pedals. Yet a growing number of automotive experts and class action lawyers like Richard McCune say that explanation just doesn't fit.</s>RICHARD MCCUNE, CLASS ACTION ATTORNEY: What I hear over and over and over again, I'm driving down the road and my car just takes off on me. I apply the brakes, sometimes it works and sometimes it doesn't. That's the pattern that we have seen.</s>FEYERICK (on camera): So unequivocally, that these recalls simply do not get to the core of the problems that Toyota has. (voice-over): Safety analysts, Sean Kane did more than 2000 in acceleration incidents involving Toyota and believes the root of the problem lies in the electronic throttle system which controls the speed of the car.</s>SEAN KANE, SAFETY RESEARCH AND STRATEGIES: These are computer- guided systems, and we all know that electronics fail, they do fail and they will fail. And the problem with Toyota, is they have not built enough fail safe devices into the cars to ensure that the drivers get control of the vehicle when a failure happens.</s>FEYERICK: During a press conference in Japan this week a Toyota executive ruled out any software or electronic issue with the accelerator.</s>SHINICHI SASAKI, TOYOTA EXECUTIVE VICE PRESIDENT (translator): For the electronic control unit we cannot could not come across any case where we found that there was a misfunction in this control system.</s>FEYERICK: McCune says Toyota's recalls are disturbing in their limitations because they don't apply to all makes and models that have allegedly experienced the acceleration problem '05 Camry Guadelope Alberto was driving. (on camera): Based on your evidence, you're suggesting that there are cars on the road that right now should be recalled?</s>MCCUNE: I think that the recalls cover less than half of the models and model years that need to be part of this recall.</s>FEYERICK (voice-over): Toyota says it basis its recalls on defects that have been identified and not solely on reports of unintended acceleration. Late Wednesday McCune filed a motion for a preliminary injunction demanding that Toyota recall all vehicle models allegedly affected. And also install a brake override system that would stop a car that's accelerating out of control.</s>MCCUNE: While everybody tries to figure this out including Toyota, I presume, we need a system so the sudden accelerations do not become deadly accidents. And that's what the break override system does.</s>FEYERICK: A system that possibly could have saved the life of Guadalupe Alberto.</s>LILIA ALBERTO, DAUGHTER OF CRASH VICTIM: Once in a while, I come by this just to say a prayer, or just to come and look and remember the place where she died. But, it's very painful. It's still very vivid in my mind and my heart.</s>FEYERICK: Toyota says that all new cars made next year will be programmed with the break override safety system. In fact, in November during that format recall, Toyota actually said it would install the break override system in what amounts to millions of Camrys, Avalons, and Lexus models. Toyota did not call it a safety measure. They said it was an extra measure of confidence for drivers -- Kyra.</s>PHILLIPS: A lot of cars have these data recorders similar to a black box on airplanes, right? so should not have those recorders have information to explain why this engine surge is happening?</s>FEYERICK: Absolutely. You would think so. We asked Toyota that very question, and the spokesman said the data recorders on their vehicles are not programmed specifically to detect unwanted acceleration. Even though, they know it's a problem, they are programmed only to record the last five to six seconds before the airbag is deployed, and one we interviewed believes that their program that way deliberately, especially since he said it could provide the car giant a lot of valuable information to find out why the sudden acceleration is occurring -- Kyra.</s>PHILLIPS: All right. Deb Feyerick. Thank you so much. We appreciate it. We may just be seen the tip of the iceberg, not just for Toyota, but for the government as well. Joan Claybrook is a former administrator with the National Highway Traffic Safety Administration, now president emeritus for public citizen and nonprofit consumer advocacy group. And we're just getting word Joan. This just came across the wires, and apparently, the transportation department is now opening an investigation into break problems for the 2010 model of Toyota's Prius. Japanese automaker came forward and acknowledged some design problems with the breaks in this very popular Hybrid that has been out on the market. Now, it's opened up an additional investigation. So, help me out here. Try and bring us some piece of mind, especially if we own a Toyota. We really don't know who to trust and what to believe at this moment. I mean, Toyota has known about this problem for a number of years, right?</s>JOAN CLAYBROOK, PRESIDENT EMERITUS, PUBLIC CITIZEN: Correct. They have known about it probably since 2004, at least, because that's when they were first sued, and when they are sued, they pay a lot of attention to that, and so I am very disappointed in Toyota for delaying, persuading the Department of Transportation to close the investigations that it opened when consumer complaints came in 2005, 2006, 2008, and delaying up to this point where now we have huge numbers of vehicles involved and enormous costs and people are really scared to death.</s>PHILLIPS: So, if they knew about it for as far back as 2004, then the government had to know about it, right? Where was the government in its investigations and trying to do something for the public?</s>CLAYBROOK: Well, I am not sure the government knew in 2004, but they probably did right about then or 2005, and the government was negligent in my view. They took some of a brief look, a casual look at these issues. They opened six investigations and closed them at Toyota's request. They kept a lot of information secret, and I think that it's refreshing that we have in the new administration, Rey LaHood and new NHTSA administrator who are being very tough on the company and other companies as well, and pushing them to do a recall, but this is a case of a severe problem. If you have a breaking loss, sudden acceleration, or rollover, this on fire, those are the kinds of cases that the agency should jump on immediately and try and resolve as rapidly as possible, and instead they just let Toyota get away with delaying and giving lousy excuses like people put their foot on the accelerator instead of the break. Even in November or October, when the Toyota submitted its papers on doing the November recall for the floor mat and also this break override, which I believe shows it's an electronic issue, they said it wasn't a safety related defect, but they were going to comply with the rules that it has.</s>PHILLIPS: So, you know, you were the former administrator of NHTSA and -- so what is happening here? Why wouldn't the job had been -- why wasn't the job done properly on behalf? I mean, we might understand the PR nightmare for Toyota, but it seems like the government truly failed us? I mean, is this about money? Is this about the economy? Is this about saving face? I mean, why wouldn't the public -- why wasn't the public more protected when this first became a serious problem?</s>CLAYBROOK: Well, you know, it's a very curious because when the Firestone Ford Explorer debacle occurred in 2000, the government was reprimanded by the Congress. They got more money, more staff, and more power, and yet they fell back into sort of an old bureaucratic habit of not really paying attention to the issues or doing so as an everyday routine, and not as a serious issue. They have subpoena power. They can get information, demand information or put people in jail if they don't get it from the company, from the suppliers, from the dealers. They can hire consultants and other experts, whoever they want. They can put out consumer alerts and ask the public to let them know if they have this problem. They have enormous authority and yet they just did not do the job. And I think it's -- they were not the cop on the corporate beat, and I think it had to do with the philosophy of the Bush administration at least in part where they did not issue safety standards, and they didn't do much enforcement.</s>PHILLIPS: The public was definitely failed, and I got to ask you this before we go. You mentioned the Secretary of Transportation, Ray LaHood. Look, he didn't have too spectacular of a day yesterday. He comes out and says to the nation, don't drive your Toyota, and then oops a couple hours later, I didn't really mean that, you can drive your Toyota. Look, you were the head of NHTSA, you've been involved with these investigations. Should we drive our Toyota or not?</s>CLAYBROOK: I think the people should drive their car. They have to drive their car, but if they have any concern about it as the Secretary said very appropriately, they should take them to the dealer. The dealers are getting parts now, and they can, if anyone is really concerned that their car maybe dangerous, they can take it in there. All of these cars have to be fixed. It's going to take months for that to happen. If anyone experienced any hint that they have a problem with the accelerator or with the breaking, they should take them in immediately. If they have not, they should be aware of the problem, the potential for the problem, and if it occurs, put it in neutral immediately, so that the vehicle cannot-- this is with the acceleration, so the vehicle engine doesn't race, and then bring the car to a stop and get it to a dealer -- call the dealer and have it towed to the dealer.</s>PHILLIPS: Joan Claybrook, we really appreciate your insight. Timing worked out perfectly as we got this breaking news about the investigation now into the Prius. Our Willy --</s>CLAYBROOK: I am glad they opened that one right away. At least they're Johnny on the spot right now under the new administration.</s>PHILLIPS: There is a little bit of good news there.</s>CLAYBROOK: That's right.</s>PHILLIPS: Thanks, Joan. We really appreciate it.</s>CLAYBROOK: Okay.</s>PHILLIPS: And next hour, a Toyota owner speaks out. A personal story of surviving harrowing accidents as well as the anxiety that seems to be growing every day. We're back in a moment.