C M Y K A13
DAILY 03-09-10 MD SU A13 CMYK
TUESDAY, MARCH 9, 2010
KLMNO S
Economy & Business
A13
Toyota demo counters claim of electronic-acceleration glitch
nose the short circuit as a prob- briefing, officials from Toyota Toyota was asked about the
Rival autos put to test in
lem or issue an error message. Be- turned on the vehicles and repro- more than 80 reported cases of
effort to disprove theory
cause the situation did not pro- duced Gilbert’s experiment. In runaway acceleration in vehicles
duce an error message, the each vehicle, the engine raced and that have already been recalled
of short-circuited wiring
vehicle’s fail-safe system — which no error message was seen on di- and supposedly fixed. A company
is designed to cut engine power in agnostic tools. official said that Toyota was aware
such a situation — did not engage. In an e-mailed response to of those reports and had been
by Frank Ahrens Though careful not to person- Monday’s presentation, Gilbert able to verify only a few of them.
ally attack Gilbert, Toyota and its wrote: “Over the next several Among those that Toyota had
Embattled Japanese auto giant consultants argued that engi- days, I will examine their expan- been able to track down, the com-
Toyota launched a broad counter- neers can rewire and re-engineer ded results and conclusions along pany believes the recurring run-
attack on Monday aimed at refut- anything to make it fail. “We with my own. I will visit Exponent away acceleration was caused by
ing research that suggests elec- could rewire this building and next week to get a first-hand look improperly performed recall re-
tronics may be at the heart of run- cause it to go into flames,” said at the information presented to- pairs.
away acceleration problems that Subodh Medhekar, principal en- day and discuss their methods When asked if the company
have led the automaker to recall gineer with Exponent, the outside and procedures. I hope to com- thought it had a software prob-
more than 6 million vehicles. company Toyota hired to diag- plete my review of all the informa- lem, Toyota said it was confident
Toyota’s prime target was nose the runaway acceleration tion within the next few weeks.” that is not the case. Nevertheless,
Southern Illinois University engi- problem. Edmunds.com senior editor Exponent and the National High-
neering professor David Gilbert, Toyota also used Gilbert’s tech- Bill Visnic said Toyota’s display way Traffic Safety Administration
who testified before a congres-
BRET HARTMAN/ASSOCIATED PRESS
nique to short-circuit several non- was thorough. are looking into Toyota software.
sional panel last month and ap- Matthew Schwall, an engineer, speaks during Monday’s webcast Toyotas and achieved the same re- “Toyota really chipped away at The software issue has been
peared on an ABC News report aimed at assuring drivers that Toyota has addressed its safety issues. sult — a racing engine. In the the evidence provided by Dr. Gil- called by some “the ghost in the
showing how he short-circuited large room where Monday’s brief- bert during the congressional machine.”
the electronic acceleration system ly unrealistic. He rewired and re- the engine on his test vehicle to ing was held, Toyota displayed a hearings,” Visnic said. “Toyota Toyota’s Kristen Tabar, general
in a Toyota Avalon to create run- engineered a vehicle in multiple race, causing sudden accelera- Ford Fusion, Chevrolet Malibu, demonstrated today that Gilbert’s manager of electronics systems,
away acceleration, and suggested ways in a specific sequence that is tion. Chrysler Town & Country and hardware test does not provide a said: “There isn’t a ghost issue out
such an event could happen un- impossible to occur.” Gilbert noted that the Toyota’s Crossfire, Subaru Outback, BMW uniform probable cause for all un- there.”
der normal driving conditions. The criticism was echoed by J. engine computer did not diag- 325 and other vehicles. During the intended acceleration claims.” ahrensf@washpost.com
On Monday, Toyota held an Christian Gerdes, associate pro-
elaborate news conference at its fessor of mechanical engineering
North American headquarters in at Stanford and the director of the
Torrance, Calif., and presented school’s Center for Automotive
company officials, engineers from Research, which is funded with
an outside firm and a Stanford money from Toyota and several
University engineering professor. other automakers.
It dramatically replicated Gil- Toyotas, like all modern vehi-
bert’s experiment on several vehi- cles, use an electronic linkage be-
cles made by rival automakers tween the gas pedal and the en-
that had been parked in the brief- gine, not a mechanical one, as old-
ing room. er vehicles did. In his experiment,
“We did what Dr. Gilbert and Gilbert had tapped some of the six
ABC should have done to test the wires that send signals to the en-
real-world relevance of Dr. Gil- gine when a driver steps on the
bert’s findings,” said Toyota gas pedal and bridged the wires to
spokesman Mike Michels. Gil- create a short circuit. Then, he ap-
bert’s experiment was “complete- plied a small voltage that caused
AIG sells Alico for
$15 billion to MetLife
Deal is insurance giant’s
latest move to try
to repay federal loans
by Brady Dennis
American International Group
announced Monday the sale of
one of its major global insurance
units to MetLife for $15.5 billion,
the latest step in the insurance gi-
ant’s quest to pay down its mas-
sive debt to U.S. taxpayers.
Under the complex agreement,
MetLife will pay $6.8 billion in
cash and the remainder in a mix
of common and preferred stock
to buy American Life Insurance
Co., or Alico, which operates in
more than 50 countries. The cash
immediately will go toward pay-
ing down loans from the Federal
Reserve Bank of New York, and
AIG plans to sell the equity stakes
DANIEL ACKER/BLOOMBERG NEWS
over time to further reduce its The acquisition of Alico,
debt. expected to close at the end of
The sale, approved by the the year, would allow MetLife to
boards of directors of both com- tap new international markets.
panies and expected to close by
the end of the year, would allow “a step in the right direction.”
MetLife to tap a host of new Bergman said AIG has ben-
international markets, while efited from the improving credit
helping AIG make a significant and housing markets, and the
dent in paying back its federal company has stabilized the flow
loans. of insurance premiums that
“This sale is an important step make up its core business. But
toward repaying the govern- the continued burden of its feder-
ment,” Harvey Golub, chairman al debt coupled with the soft in-
of the AIG board, said of the Alico surance market, which makes it
sale in a statement Monday. difficult for companies to raise
The deal marks the second ma- prices to boost profitability,
jor divestiture for AIG in a week. makes for an uncertain future.
On March 1, the company un- “It’s still a challenging time,”
dertook its largest asset sale since Bergman said. “They’ve got to be
it was bailed out by the govern- careful and underwrite good
ment in 2008, agreeing to sell its business.”
massive Asia-based life unit, AIG’s financial health has tak-
American International Assur- en a positive turn during the past
ance, to Prudential of Britain for year. The company reported a
CURRENCY OF
$35.5 billion. $8.9 billion loss for the last three
AIG said Monday that the sale months of 2009 and a total loss of
of two of its crown jewels would $10.9 billion for the year, but that
put the company on track to gen- marked a vast improvement over
erate nearly $51 billion toward its $99.3 billion loss in 2008.
reducing its outstanding debt According to AIG, Alico serves
opportunity
and, according to Golub, “give 20 million customers and em-
AIG greater flexibility to move ploys 12,500 people around the
forward with our restructuring world, including in Europe, Asia,
and rebuilding efforts, and focus the Middle East, Africa and Latin
on enhancing the value of our key America. Officials at MetLife,
insurance businesses.” which has been eyeing Alico for
Visa digital currency brings in more business. Like all New York City taxi drivers,
But despite two large asset more than two years, said they
sales, AIG faces hurdles as it tries were delighted to acquire a firm
Ossman Ali now accepts Visa payments. The convenient, guaranteed payment
to regain stability and repay tax- that gives their company an in-
system allows him to pick up riders even if they don’t have cash. For the small cost
payers. According to a recent stantly broader global footprint.
public filing, the insurer owed “It’s a franchise that one could of taking Visa digital currency, drivers citywide have seen significant increases in
the New York Fed about $48 bil- not build without a significant in-
lion at the end of 2009. In addi- vestment of time and resources
ridership and revenue since the system was introduced. Visa’s network means more
tion, the Treasury has invested over many years,” MetLife chief
$47 billion in AIG through its executive C. Robert Henrikson
convenience for New Yorkers, better business for Ossman, and the added security
Troubled Assets Relief Program. said in a conference call. “I think
that comes from driving around with less cash. www.currencyofprogress.com
Even after the sale of Alico and I can safely say this acquisition
AIA, the insurer would still owe establishes MetLife as perhaps
significant sums to the federal the premier global life insurance
government. AIG has plans to franchise.”
shed additional assets, such as its Wall Street viewed the Alico
large aircraft-leasing subsidiary, sale positively Monday. MetLife
but it has no other units that shares closed up $1.98, or 5.1 per-
could generate as much cash as cent, to $40.90, its highest level
AIA or Alico. in almost six months, while
“They’ve got a long way to go,” shares of AIG rose $1.02, or 3.6
said Bill Bergman, a Morningstar percent, to close at $29.10.
analyst, who called the Alico deal dennisb@washpost.com
C M Y K A13
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