Hoovey689

iTrader: (16)

DoJ fines Japanese parts firms $740M in massive automotive price-fixing scandal

Nine Japanese suppliers have pleaded guilty in US court over charges of price fixing in the automotive parts industry, resulting in the Department of Justice doling out a total of $740 million of fines, according to a report from Bloomberg. The scandal, which has resulted in General Motors, Ford, Toyota and Chrysler spending up to $5 billion on inflated parts and driving up prices on 25 million vehicles has sent the DoJ hustling into investigations. "The conduct this investigation uncovered involved more than a dozen separate conspiracies aimed at the U.S. economy," Attorney General Eric Holder (pictured above) said during yesterday's press conference.

As the investigation stands, the DoJ has issued $1.6 billion in fines against 20 companies and 21 individual executives, with 17 of the execs headed to prison. Deputy Assistant Attorney General Scott Hammond said, "The breadth of the conspiracies brought to light today are as egregious as they are pervasive. They involve more than a dozen separate conspiracies operating independently but all sharing in common that they targeted US automotive manufacturers."

Big-name suppliers indicted in the investigation include Mitsubishi Electric, Mitsubishi Heavy Industries, Hitachi Automotive and Mitsuba Corporation. A list of fines and other corporations named in the investigation is available at Bloomberg.

http://www.autoblog.com/2013/09/27/j...-price-fixing/

yowps3

Remember the Toyota recall? All the Toyota negativity from the media..

740 millions seems far too vast.

I8ABMR

does this mean repair prices will drop ?!!?

1JZsoarer

Yeah you can always dream about that!

Stormwind

Sounds good. Don't drop the soap.

pman6

All that money should go back to the consumers who bought the cars.

yowps3

All of Ford's or GM issues all go unnoticed and ignored by media, even major issues. But the slightest Toyota or Hyundai issue and you have the media is all over it.

Toyota these days is more American than the American brands themselves..

G Star

iTrader: (2)

You can go to jail for price fixing auto parts but the director of the NSA lies to congress and nothing happens.

Honestly, from a free market stand point, I see nothing wrong with price fixing. A company offers a product at a certain price point and colludes with other companies to achieve the same goal. Nobody is forcing you to buy their inflated products.

spwolf

Toyota was victim here though, although the article doesnt explain it well, US manufactured Toyota's used these components.

But what I find funny is that everyone investigates the competition... DoJ European and Japanese companies, EU also investigates a lot American companies :-)

SteVTEC

You obviously don't understand what price-fixing is then. A "free market" ceases to exist when there's price fixing going on.

Dave600hL

How many CEO's of the banks were held accountable for the financial crisis that cost American tax payers trillions of dollars... But, yet the Government will go after companies and CEO's for something like this.

And there were 20 companies involved, why were the Japanese companies singled out in the media?

Stormwind

The ceo's of those banks are actually untouchable by the government. You should see jamie diamond's testimony at congress to get a sense of their attitude.

Dave600hL

It is a disgrace. I say this regardless of country, but we are being ruled by criminals in suits.

mmarshall

Eric Holder himself, who explained this very study in the press-conference, was held in Contempt of Congress over the Federal Gun-Running issue in Mexico, but nothing was ever really done about it.

Your opinion noted, but price-fixing/collusion is illegal for a reason. It actually has the effect of creating monopolies and blocking out free-market competition buy setting prices solely by inter-corporate economic power and not allowing the laws of supply-and-demand to work normally. The more of the potential market is covered by this price-fixing, the greater the monopolistic effect will be, and the more customers will have to spend over what would be necessary in a free market.

Yes and no. If a spark plug or battery fails, for instance (or if you just need an oil filter), you may (?) have more than one choice between factory-original and aftermarket-equivalent parts. But if an ignition module or a specialized, hard-to-get part fails, you may not have much choice but to get a factory-original.

That has long been a problem, for instance, with the rotary engines used in some Mazda vehicles. Parts for them are often hard to get outside of Mazda dealers, and the pricing for those parts reflect that.

mmarshall

BTW, if some Mitsubishi execs actually do any prison time out of this (as the article suggests), it wouldn't necessarily be the first time. There have been several Mitsubishi scandals in the last few decades, and several of their former execs have already served time.