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Auto Suppliers Ordered to Pay $740M for Price Fixing

September 26, 2013

WASHINGTON — Nine Japan-based companies and two executives have agreed to plead guilty and pay $740 million in fines for their part in separate conspiracies to fix the prices of more than 30 different products that were sold to U.S. car manufacturers and installed in vehicles.

The Department of Justice said that price-fixed automobile parts were sold to Chrysler, Ford, and General Motors, as well as to the U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Toyota and Subaru.

“These international price-fixing conspiracies affected more than $5 billion in automobile parts sold to U.S. car manufacturers, and more than 25 million cars purchased by American consumers were affected by the illegal conduct,” said Attorney General Eric Holder. “The Department of Justice will continue to crack down on cartel behavior that causes American consumers and businesses to pay higher prices for the products and services they rely upon in their everyday lives.”

The agreed-upon fines and sentences include:

  • Hitachi Automotive Systems Ltd. to pay $195 million
  • Jtekt Corp. to pay $103.27 million
  • Mitsuba Corp. to pay $135 million
  • Mitsubishi Electric Corp. (MELCO) to pay $190 million
  • Mitsubishi Heavy Industries Ltd. to pay $14.5 million
  • NSK Ltd. to pay $68.2 million
  • T.RAD Co. Ltd. to pay $13.75 million
  • Valeo Japan Co. Ltd. to pay $13.6 million
  • Yamashita Rubber Co. Ltd. to pay $11 million
  • Tetsuya Kunida, a Japanese citizen and former executive of a U.S. subsidiary of a Japan-based automotive anti-vibration rubber products supplier, to serve 12 months and one day in a U.S. prison. He is also ordered to pay a $20,000 fine
  • Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier, is ordered to serve 14 months in a U.S. prison and pay a $20,000 fine

MELCO and Hitachi conspired with each other and other firms on sales of certain auto parts, including starter motors, alternators, and ignition coils, according to the department. Mitsuba and Mitsubishi Electric conspired together and with other co-conspirators on certain sales of starter motors.

Generally, the companies, executives and co-conspirators engaged in various price-fixing schemes by attending meetings and communicating by telephone in the United States and Japan to reach collusive agreements to rig bids, set prices and allocate the supply of auto parts sold to the car manufacturers. They took measures to keep their conduct secret by using code names and meeting in remote locations. Those charged also had further communications to monitor and enforce the collusive agreements.

The multiple conspiracies also harmed U.S. automobile plants in 14 states, including Alabama, California, Georgia, Illinois, Indiana, Kansas, Kentucky, Michigan, Mississippi, Missouri, Ohio, Tennessee, Texas and Wisconsin.

Comments

  1. 1. Mick [ September 28, 2013 @ 01:57PM ]

    Do we believe the claims of our current justice department? I haven't seen anything to indicate they as a whole are trustworthy. Are they simply penalizing these companies for making a profit? I am open to the idea that the allegations are accurate, but I'd like some actual evidence.

 

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