Parts suppliers fined, imprisoned for price-fixing

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Foreign auto-parts suppliers have been overcharging for years, and the U.S. government said Thursday that the many have begun to plead guilty and be hit with big fines and prison terms.

The latest, announced Thursday by Attorney General Eric Holder: Nine Japan-based companies and two executives have agreed to plead guilty. The companies will pay more than $740 million in criminal fines. The executives will go to prison.

The components are those supplied to new-car factories, so the auto-parts crooks cheated car companies as well as car buyers.

The government did not set a figure on how many billions of dollars were unlawfully filched from U.S. buyers and automakers by the extensive scam.

What Holden announced was the latest and largest action in a multi-year, international investigation involving unfairly priced new-vehicles components bought by Chrysler Group, Ford Motor, General Motors, Toyota and others.

The European Union and Japan also are investigating, Earlier this week, Europeanofficials raided offices of six parts suppliers three.

In the U.S. about 20 suppliers have settled and agree to pay fines, and 21 executives have been charged.

The Justice Department listed these as involved: Hitachi Automotive Systems, Mitsubishi Electric, Mitsubishi Heavy Industries, Mitsuba, Jtek, NSK, T.RAD, Valeo Japan, Yamashita Rubber.

Individuals involved are two former executives of U.S. subsidiaries of Japan-based automobile products suppliers – Tetsuya Kunida, a Japanese citizen, and Gary Walker, a U.S. citizen. Both have agreed to serve time in a U.S. prison.

They were involved in separate conspiracies, Holden said, to fix prices of more than 30 different products sold to U.S. car manufacturers and used in vehicles sold here and elsewhere.

Overall, the main culprits so far are Japan-based auto parts suppliers.

Holden said the international price-fixing conspiracies affected more than $5 billion in automobile parts sold to U.S. car manufacturers, and more than 25 million vehicles bought by Americans.

He called it "the largest criminal investigation the Antitrust Division has ever pursued, both in terms of its scope and the commerce affected by the alleged illegal conduct. Never before has the Department of Justice simultaneously announced the breakup of so many separate antitrust conspiracies. And today's charges were filed in three different U.S. District Courts – in Detroit; in Cincinnati; and in Toledo, Ohio."

Parts involved in the price-fixing include safety belts, radiators, windshield wipers, air conditioning systems, power window motors, power steering parts and other products.

Holden described the workings of the conspiracy in spy-like terms:

"Company executives met face to face in the United States and Japan – and talked on the phone – to reach collusive agreements to rig bids, fix prices and allocate the supply of auto parts sold to U.S. car companies. In order to keep their illegal conduct secret, they used code names and met in remote locations. Then they followed up with each other regularly to make sure the collusive agreements were being adhered to."

In addition to the U.S. Justice Department and FBI, foreign agencies involved include he Japan Fair Trade Commission, the European Commission, the Canadian Competition Bureau, the Korean Fair Trade Commission, the Mexican Federal Economic Competition Commission and the Australian Competition and Consumer Commission.