Toyota Motor Corp. shares sank rapidly Wednesday after U.S. Transportation Secretary Ray LaHood advised in congressional testimony that people stop driving any cars involved in the Toyota recall, though the declines eased somewhat after the secretary clarified his statement.
Testifying before the House Appropriations committee, LaHood was asked what advice he would give to owners of Toyotas subject to the recall. LaHood was scheduled to speak to the committee, which controls the government’s spending, about the fiscal 2011 budget proposals.
“My advice is, if anybody owns one of these vehicles, stop driving it, take it to the Toyota dealer because they believe they have the fix for it,” LaHood said.
Afterwards he told reporters that wasn’t what he meant to say.
Yeah, I’d imagine not. It’s been a year in office and the current administration is still making amateur mistakes. Shareholders are already nervous and when senior members of the administration go making blanket statements that people should immediately stop using a given company’s products they understand very well that the American public will likely give that some serious consideration. Understandably not wanting to lose money on their investment, they head for the door and the stock price takes a hit. That directly impacts a company’s bottom line which, of course, affects their ability to respond to the problem to begin with.
LaHood backpedaled furiously the moment he got out of the House Committee he was addressing and that helped stabilize things a bit but it was still something he shouldn’t have said. How long before these guys learn?