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Ray LaHood U.S. Transportation Secretary's Comment About Toyota Recall Confuses Public and Industry

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WASHINGTON, Feb 3, 2010; John Crawley writing for Reuters reportesd that transportation Secretary Ray LaHood sent shares of battered Toyota Motor Corp plunging even further on Wednesday when he advised owners of recalled vehicles to stop driving their cars, later characterizing the remark as a misstatement.

Toyota shares fell as much as 8 percent on the New York Stock Exchange but recovered some ground to trade down 5 percent at $74.30 on Wednesday afternoon.

LaHood's explosive comment at a House of Representatives hearing fueled new confusion over how consumers should respond to a January recall of 2.4 million cars and trucks due to faulty accelerator pedals.

LaHood, in comments to reporters shortly before the midmorning hearing, had repeated his recommendation that affected Toyota consumers should "exercise caution" and seek out dealers for information on repairs.

But he sharpened his tone in an exchange with lawmakers.

"My advice is if anybody owns one of these vehicles is to stop driving it and take it to a Toyota dealer because they believe they have the fix for it," LaHood said.

LaHood appeared after the hearing to clarify his statement, saying it was an obvious misstatement to say owners should stop driving their vehicles.

"I want to encourage owners of any recalled Toyota models to contact their local dealer and get their vehicles fixed as soon as possible," he said.

Toyota said in a statement that it appreciated LaHood's clarification, and advised owners to contact dealers if there was an accelerator pedal problem.

"If you are not experiencing any issues with your pedal, we are confident that your vehicle is safe to drive," the statement said.

Toyota shares have dropped more than 17 percent since Jan. 26 when it suspended sales of eight models in the United States, including its popular Camry and Corolla models.

LaHood's agency has boosted pressure on Toyota in recent days, expressing public frustration with how the automaker handled the recall, which followed another recall in late 2009 for floor mats that can jam accelerator pedals.

LaHood said he plans to call Toyota President Akio Toyoda, the grandson of the company's founder, soon to ensure that the company understands the Obama administration is serious about ongoing safety matters.

Separately, LaHood said the National Highway Traffic Safety Administration was pressing ahead with a new investigation of complaints about Toyota electronic throttle systems to see if they are in any way related to unintended acceleration.

"It's not so complex that we can't figure it out," LaHood told reporters. "We have the resources to do this and we're going to do it."

LaHood said NHTSA has received new complaints recently and the Japanese automaker is cooperating.

LaHood said the electronic throttle review would also look at other automakers. But it is not clear what companies or what systems would be included. Complaints about unintended acceleration have cut across the entire industry over the years.

Potential electromagnetic interference with Toyota's electronic throttles is one technical issue NHTSA is looking into as part of its review, LaHood said.

Jim Lentz, president and chief operating officer of Toyota Motor Sales USA, told Reuters television on Monday that the automaker is convinced accelerator problems have nothing to do with electronics.

Editing for Reuters by Gerald E. McCormick and Matthew Lewis