Japanese Firms Agree to Pay $548M for Fixing Auto Parts Prices
The Justice Department has announced that two Japanese suppliers of automotive electrical components -- Yazaki Corporation and DENSO Corporation -- have agreed to plead guilty and pay a total of $548 million in criminal fines for their involvement in multiple price-fixing and bid-rigging conspiracies in the sale of parts to automobile manufacturers in the U.S. Four executives, all Japanese nationals, have also agreed to plead guilty and to serve prison time in the U.S.
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Companies to Pay $548 Million in Fines, 2nd Largest Fine for an Antitrust Violation
Yazaki has agreed to pay a $470 million criminal fine, the second largest criminal fine obtained for a Sherman Act antitrust violation, and DENSO has agreed to pay a $78 million criminal fine. Additionally, four executives from Yazaki -Tsuneaki Hanamura, Ryoji Kawai, Shigeru Ogawa and Hisamitsu Takada - will serve prison time ranging from 15 months to two years. The two-year sentences would be the longest term of imprisonment imposed on a foreign national voluntarily submitting to U.S. jurisdiction for a Sherman Act antitrust violation.
Companies and Execs Coordinated Price Adjustments, Sold Auto Parts at Inflated Prices
According to court documents, the companies, their executives, and their co-conspirators agreed to allocate the supply of the named products on a model-by-model basis and to coordinate price adjustments requested by automobile manufacturers in the U.S. and elsewhere. They sold automotive electrical components to automobile manufacturers at inflated prices and engaged in meetings and conversations for the purpose of monitoring and enforcing adherence to the agreed-upon bid-rigging and price-fixing scheme.
Auto Components Included Wire Harnesses, ECUs and HCPs
Yazaki allegedly engaged in three separate conspiracies: to rig bids for and fix, stabilize, and maintain the prices of automotive wire harnesses and related products from 2000 through 2010. Automotive wire harnesses are automotive electrical distribution systems used to direct and control electronic components, wiring and circuit boards in cars.
DENSO also allegedly engaged in conspiracies to rig bids for and to fix, stabilize and maintain the prices of electronic control units (ECUs) and heater control panels (HCPs) sold to customers in the U.S. and elsewhere.
Execs to Serve Combined 6.5 Years in Prison, Pay Combined $80K in Fines
According to the plea agreements, which are subject to court approval, Hanamura and Kawai have each agreed to serve two years in a U.S. prison, and Ogawa and Takada have each agreed to serve 15 months. Each of the four executives has also agreed to pay a $20,000 criminal fine. According to the plea agreements, Yazaki, DENSO, Hanamura, Kawai, Ogawa and Takada have all agreed to assist the department in its ongoing investigation into the automotive parts industry.
(See ITT's Online Archives 11093017 for summary Furukawa Electric Co.'s November 2011 guilty plea and its role in the wire harnesses price-fixing and bid-rigging conspiracy.)