Nine auto parts makers to plead guilty to U.S. price fixing (updated)
26/09/2013 20:43
* DOJ antitrust division's largest criminal investigation * Company execs met in remote locations, used code names - DOJ * More than $5 billion in auto parts affected (Adds background on investigation, quote, comment from company) By Diane Bartz and David Ingram WASHINGTON, Sept 26 (Reuters) - Nine companies based in Japan and two executives have agreed to plead guilty and to pay almost $745 million in fines for their roles in long-running conspiracies to fix the prices of auto parts sold to U.S. car manufacturers, the Department of Justice said on Thursday. The settlements are the latest in an ongoing probe into price fixing of a broad range of car parts that has now ensnared 20 companies and 21 executives. The companies have agreed to pay $1.6 billion in fines overall. The department said Thursday that price-fixed automobile parts were sold to Fiat SpA FIA.MI affiliate Chrysler Group LLC UAWREC.UL , Ford Motor Co F.N and General Motors Co GM.N , as well as to the U.S. subsidiaries of Honda Motor Co Ltd 7267.T , Mazda Motor Corp 7261.T , Mitsubishi Motors Corp 7211.T , Nissan Motor Co Ltd 7201.T , Toyota Motor Corp 7203.T and Fuji Heavy Industries Ltd's 7270.T Subaru. In some cases the activity, which involved separate conspiracies to fix prices of more than 30 different products, lasted for a decade or longer, said Scott Hammond of the department's antitrust division's criminal enforcement program. "Every time we discover a conspiracy involving the automotive industry, we seem to find another one," said Hammond. Antitrust enforcers around the world were involved in the probe, and Hammond credited Japan's competition agency with first turning up some of the wrongdoing that was part of Thursday's settlement. Among the parts affected by the conspiracies were seat belts, radiators, windshield wipers, air-conditioning systems, power window motors and power steering components. Justice Department officials declined to estimate how much the collusion inflated the price of the parts, sold to automakers for an estimated $5 billion. "More than 25 million cars purchased by American consumers were affected by the illegal conduct," said Attorney General Eric Holder. Each of the companies and executives in the plea deal announced on Thursday has agreed to cooperate with the department's ongoing antitrust investigation, the Justice Department said. "We will continue to check under every hood and kick every tire to make sure we put an end to this illegal and destructive conduct," Holder said. Holder said that parts company executives typically met face to face or talked via telephone to reach collusive agreements. "In order to keep their illegal conduct secret, they used code names and met in remote locations," he added. The agreed-upon fines and sentences announced on Thursday included: -Hitachi Automotive Systems Ltd 6501.T to pay a $195 million criminal fine; -Jtekt Corp 6473.T to pay a $103.27 million criminal fine; -Mitsuba Corp 7280.T to pay a $135 million criminal fine; -Mitsubishi Electric Corp (MELCO) 6503.T to pay a $190 million criminal fine; -Mitsubishi Heavy Industries Ltd 7011.T to pay a $14.5 million criminal fine; -NSK Ltd 6471.T to pay a $68.2 million criminal fine; -T.RAD Co Ltd 7236.T to pay a $13.75 million criminal fine; -Valeo Japan Co Ltd VLOF.PA to pay a $13.6 million criminal fine; -Yamashita Rubber Ltd 5101.T to pay an $11 million criminal fine; -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, and to pay a $20,000 criminal fine; and -Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier, to serve 14 months in a U.S. prison, and to pay a $20,000 criminal fine. There was no immediate comment from eight of the companies. Mitsubishi Electric, however, noted that it had cooperated fully with the Justice Department. "We accept the terms of the plea agreement and are now focused on moving forward," said spokeswoman Cayce Blandard in an emailed statement. Hammond said car makers had been concerned about the price fixing. "We're talking about an industry with very tight margins. And when you have in a car fixed prices on automotive parts that result in higher manufacturing costs, you don't have any problems getting the attention of the victims," he said. GM was one of several car makers that said it was watching the probe closely. "We are greatly concerned by the large number of suppliers in the automotive supplier sector who have pled guilty to serious criminal price fixing charges," said GM spokesman Tom Henderson. "This evidences a culture of anti-competitive activity among a cross section of suppliers in the automotive sector ... This is unacceptable." Among the companies that the Justice Department's Antitrust Division settled with previously were Autoliv Inc ALV.N , Tokai Rika Co Ltd 6995.T , TRW Deutschland Holding GmbH TRW.N , Nippon Seiki Co Ltd 7287.T , Furukawa Electric Co Ltd 5801.T and Fujikura Ltd 5803.T . (Reporting by Diane Bartz and David Ingram, additional reporting by Bernie Woodall in Detroit; Editing by Ros Krasny and Steve Orlofsky) ((ros.krasny@thomsonreuters.com)(202 898 8415)(Reuters Messaging: ros.krasny.thomsonreuters.com@reuters.net)) Keywords: USA JUSTICE/AUTO PARTS