Japanese car parts firms fined by U.S. regulators

Nine Japan-based companies and two executives have agreed to plead guilty to conspiring to fix the price of car parts sold to U.S. car manufacturers and will pay a combined $740 million in criminal fines to U.S. authorities, the U.S Department of Justice has announced.

In separate conspiracies, the parties fixed the prices of more than 30 different products sold to U.S. car manufacturers and installed in cars sold in the U.S. and elsewhere.

More than $5 billion worth of parts were then sold to U.S. manufacturers like Chrysler, Ford, and General Motors, while the U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Toyota and Subaru were all also subject to higher prices for parts.

Hitachi Automotive Systems agreed to pay a $195 million fine, the largest among the penalties under the plea agreements, which require court approval.

Mitsubishi Electric Corporation has the second-largest fine, at $190 million.

The other companies that pleaded guilty and will pay fines are Mitsubishi Heavy Industries, Jtekt Corp, Mitsuba Corp, NSK, T.RAD, Valeo Japan, and Yamashita Rubber.

The two executives are Tetsuya Kunida, a Japanese citizen, and Gary Walker, a US citizen. Both will pay $20,000 fines.

"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 behaviour that causes American consumers and businesses to pay higher prices for the products and services they rely upon in their everyday lives."

The announcement was the latest crackdown in the Justice Department's long-running investigation of price-fixing and bid rigging in the U.S. auto industry.

So far, 20 companies and 21 executives have been charged - 17 executives have served prison sentences, and more than $1.6 billion in fines has been collected.

"Today's charges should send a message to companies who believe they don't need to follow the rules," said Ronald Hosko, Assistant Director of the FBI's Criminal Division. "If you violate the laws of this country, the FBI will investigate and put a stop to the threat you pose to our commercial system. The integrity of our markets is a part of the foundation of a free society."

Image: © Getty

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