US auto parts price-fixing scams may involve Taiwan

COLLUSION::The Japanese firms pleading guilty to the conspiracies, affecting more than 25 million cars in the US, include Hitachi Automotive and Mitsubishi Electric

By William Lowther  /  Staff reporter in WASHINGTON

Sat, Sep 28, 2013 - Page 13

A major international investigation into price fixing and bid rigging in the automobile parts industry may involve Taiwan.

US Attorney General Eric Holder announced on Thursday that nine Japan-based companies and two executives have agreed to plead guilty — and have been fined a total of US$740 million in criminal fines — for their roles in separate conspiracies.

“These international price-fixing conspiracies affected more than US$5 billion in automobile parts sold to US car manufacturers,” Holder said.

“This auto-parts investigation is 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,” he said.

The nine Japanese firms, including Hitachi Automotive Systems and Mitsubishi Electric, entered plea agreements with the US Department of Justice over separate conspiracies to fix the prices of more than 30 different products, affecting more than 25 million cars purchased by US motorists.

The other firms involved in the plea deal are Mitsubishi Heavy Industries, Jtekt Corp, Mitsuba Corp, NSK Ltd, T.RAD Co Ltd, Valeo Japan Co Ltd and Yamashita Rubber Co Ltd.

Holder said the investigation was continuing, but refused to confirm that Taiwanese companies could be involved.

During a special Department of Justice briefing, Holder was asked: “Are there other countries involved — like South Korea and Taiwan — and do you envisage this kind of broadening both in Japan itself and to other countries as well?”

Another Department of Justice official replied: “The investigation is ongoing. And for that reason, I can’t identify for you who the additional subjects of the investigation are or where they are located. I can tell you that the investigation involves producers of auto parts around the world.”

Another source close to the investigation told the Taipei Times that Taiwan “might very well” be involved.

American companies including Chrysler Group LLC, Ford Motor Co and General Motors Corp, as well as US subsidiaries of Honda Motor Co, Mazda Motor Corp, Mitsubishi, Nissan Motor Co, Subaru and Toyota Motor Corp “were victims of these illegal cartels,” Holder said.

Among the parts involved in the price fixing were seatbelts, radiators, windshield wipers, air conditioning systems, power window motors and power steering parts.

“Company executives met face to face in the US and in Japan and talked on the phone to reach collusive agreements to rig bids, to fix prices and to allocate the supply of auto parts sold to US car companies,” Holder said.

“To keep their illegal conduct secret, they used code names and they met in remote locations,” he said, adding that the executives followed up with each other regularly to make sure the collusive agreements were being adhered to.

Holder said that including this week’s charges, a total of 20 companies and 21 executives have been charged in the ongoing investigation. All 20 companies have either pleaded guilty or have agreed to plead guilty. All told, they have also agreed to pay more than US$1.6 billion in criminal fines.

Additional reporting by AFP