Posted on 09/29/2011 1:30:09 PM PDT by Moleman
DETROIT -- Japanese supplier Furukawa Electric Co. Ltd. will pay a $200 million fine, and three of its executives will appear before a federal judge in Detroit to plead guilty for their role in alleged global price-fixing among automotive wire-harness suppliers on three continents.
The charges filed in Detroit today against Hirotsugu Nagata, Junichi Funo and Tetsuya Ukai are the first in what acting Assistant Attorney General Sharis Pozen called a larger ongoing investigation of alleged agreements to sell components to other companies “at a noncompetitive, rigged price” for years.
“We have a broad investigation ongoing. We believe this was pernicious, it operated on a model-by-model basis, and it did affect U.S. consumers and cars manufactured within the United States,” said Pozen, who is assigned to the antitrust division of the U.S. Department of Justice.
Nagata, former CFO of U.S. subsidiary American Furukawa Inc. in Plymouth from 2004 to 2009, faces one federal charge of conspiracy to restrain trade in violation of the Sherman Antitrust Act. Similarly charged was Ukai, who held several management positions in Furukawa’s Honda sales division, and Funo, who was assistant general manager of Honda sales at American Furukawa until 2009 and later general manager of Honda sales at the parent company.
All three will plead guilty and serve time at U.S. prisons under an agreement with the Justice Department. Nagata will serve 15 months under the deal with Justice, while Ukai will serve 18 months and Funo will serve one year and one day.
No details on other suppliers
The indictments do not spell out which suppliers colluded with Furukawa in the conspiracy or which customers were affected. Pozen declined to elaborate on that or say how many companies are involved, but did say Furukawa is cooperating with the federal investigation.
In February 2010, Japan’s Fair Trade Commission raided the Tokyo offices of Furukawa, Sumitomo Electric Industries Ltd. and Yazaki Corp. as part of an expansive investigation into alleged collusion dating back to least 2003.
Around the same time, FBI investigators raided the headquarters of subsidiary Yazaki North America Inc. in Canton Township, Denso Corp. in Southfield and Tokai Rika Group North America in Plymouth Township. In Europe, the European Commission also conducted similar unannounced inspections of companies.
Furukawa’s North American subsidiary is also a past supplier to Delphi Corp. and formed a joint venture with Delphi, Delphi Furukawa Wiring Systems LLC, to supply electrical systems for Toyota Motor Manufacturing North America Inc.
David Noble, administration manager at American Furukawa, said that the plea agreements today with the U.S. Justice Department involve the Japanese parent company and that Furukawa’s corporate Web site would publish a statement in response to the indictments late tonight or early Friday.
Years of activity
Furukawa also has agreed to plead guilty for its role in a conspiracy to rig bids and fix prices on automotive wire harnesses and related products sold to U.S. auto manufacturers. Federal prosecutors alleged that Furukawa participated in the conspiracy from at least January 2000 to January 2010.
Prosecutors alleged that the three executives were involved in the conspiracy from at least April 2003 to July 2009 and that during part of the conspiracy period, Nagata and Funo took part in price-fixing in the Detroit area.
In meetings and conversations, the three allegedly agreed to allocate the supply of wire harnesses and related products on a model-by-model basis and to coordinate on price adjustments sought by manufacturers. They also allegedly continued to cooperate on “monitoring and enforcing adherence” to the scheme.
The charge against Furukawa itself carries a maximum $100 million criminal fine for a corporation, and the charges against the executives carry a maximum sentence of 10 years in prison and a $1 million criminal fine each. Both fines can be increased to double the gain derived from the crime or twice its victims’ losses if they exceed the statutory maximum.
No date is set for the executives to appear and enter their pleas.
I bet they are most guilty of conducting a criminal activity without giving Obama a cut.
yep ... it’s the Chicago-UAW way ...
This kind of crap would never happen if automakers would hire buyers from Wal-Mart. They know how to get to the bottom line price.
Wonder how many purchasing agents were getting paid off?
Good question.... the Japaneese have there own cartel. Sumitomo, the other major player, is likely involved...
Good question.... the Japaneese have there own cartel. Sumitomo, the other major player, is likely involved...
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