Toyota is facing harsh scrutiny from the media and lawmakers - perhaps with justification. But there could be consequences for the U.S. economy.
And as Toyota (NYSE:TM) executives have endured two days of congressional hearings on the issues surrounding their potentially widespread defective products, the most aggressive questioners have been lawmakers from Michigan, home of the Big 3 automakers. A fact that led CNBC "Squawk Box" co-host Becky Quick to question if the federal government, with a huge stake in General Motors and Chrysler, are being a little unfair with Toyota on her Feb. 24 broadcast.
"We've heard from some congressmen, especially those later on in the show about the people and Congress people who are questioning Toyota at this point saying, they are doing this because the government has this big stake in GM?" Quick said. "To me, that seems a little crazy."
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Phil LeBeau, CNBC's auto industry reporter, dismissed the notion that Toyota couldn't get a fair hearing from the federal government, despite the potential conflict of interests.
"It is a little crazy, Becky," LeBeau said. "And I have to be honest with you - almost nobody that I have talked to who has looked into these problems at Toyota believes there is any type of a role, that government putting pressure on NHTSA [National Highway Traffic Safety Administration] to come down hard on Toyota because of the government stake in GM and Chrysler. I don't really hear that from anybody. Where I hear about it is from the crazy conspiracy people."
But both Quick and "Squawk Box" co-host Joe Kernen specifically drew attention to the rhetoric from Rep. John Dingell, D-Mich., the longest serving member of the U.S. House of Representatives.
"But, I will say it's interesting to watch some of the toughest questioning coming from Dingell from Michigan," Quick added. "That's the point that kind of jumps out at you."
"If I was from Michigan and I had a bunch of plants in my district, I would grill this guy," Kernen said.
And despite LeBeau's dismissal both Kernen and Quick pointed out there was a possibility that the conflict of interest might not necessarily be a because of the federal government's stake in the automakers, but instead a regional one in which a weak Toyota would be good for Dingell's constituents.
"You know how politics work," Kernen added. "You at least got to consider the possibility."
"The idea of the government stake - that I think is out there on a limb," Quick said. "Then again, seeing Dingell raising these questions just makes you think, ‘Of course, he's from Michigan.'"
And this "rush to judgment" and heightened scrutiny is something Mississippi Gov. Haley Barbour cautioned against in a Feb. 24 Washington Post column.
"But as two House committees and one in the Senate prepare for hearings on Toyota's safety issues, I worry that there has been a rush to judgment," Barbour wrote. "The way that Congress and the Obama administration respond to this controversy will have real economic consequences."
With this in mind, even MSNBC's David Shuster has taken notice of the potential harm this could do to the economy domestically. Shuster took a break from his anti-tea party movement shtick and obsession with ACORN whistleblower James O'Keefe to advise those in power there are consequence of too vigorously attacking Toyota.
"Finally, in light of the Toyota hearings today, and the hearings tomorrow, our notebook item tonight stems from my own family's personal experience with Toyota," Shuster said. "My wife drives a 2010 Toyota Prius like this one. I've driven it many times. We both love the vehicle. Over the weekend Julianna and I took our Prius back to the dealer as part of a recall so they could fix the potential brake issue. The entire process took about an hour. And everybody involved was courteous, kind and professional. Everybody was also American."
And with his personal experience, he reminded viewers that a damaged Toyota has broader implications on the American economy.
"As Congress hammers Toyota, and for good reason, it's worth remembering that Toyota employs more than 30,000 Americans at U.S. factories," Shuster said. "Another 100,000 Americans work at Toyota dealerships. They don't like Toyota's problems any more than we do. And as Toyota suffers and loses revenue, the American employees of Toyota may suffer as well, with job cuts and layoffs. So yes, our government should investigate Toyota's management. But all of us should remember that Toyota employs, a lot of decent, hard-working Americans, and these people are our neighbors and members of our communities."
