Toyota US Sales Halt Deals Blow to Image, Earnings

NEW YORK -- Toyota's suspension of U.S. sales on an unprecedented scale to fix faulty gas pedals deals a blow to the automaker's reputation for quality and came amid intense pressure from the Obama administration. The Obama administration said it pressed Toyota to protect consumers who own vehicles under recall and to stop building new cars with the problem. Transportation Secretary Ray LaHood told WGN Radio in Chicago that "the reason Toyota decided to do the recall and to stop manufacturing was because we asked them to."

Toyota dealers said they were concerned the move would hamper sales. They hoped parts to fix the problem could be distributed quickly. John McEleney, who owns a Clinton, Iowa, Toyota dealership, said the sales stoppage affects about 60 percent of the inventory on his lot. He said he was hopeful Toyota would come up with a fix soon — especially because the longer a vehicle stays on a dealer lot, the more money a dealer pays in interest fees. "Short term, it's going to be difficult," he said. "It will certainly set us back, but I think the impact will be very short lived."
Source: The Associated Press