June 2, 2014 at 11:49 pm

Autoliv settles price-fixing suits for $65M

Washington —A major auto supplier has agreed to a $65 million civil settlement as part of the wide-ranging global probe into price-fixing in the auto parts sector.

Stockholm-based Autoliv Inc. agreed to pay $65 million to settle antitrust lawsuits in the United States. The settlement covers three classes: companies that directly purchased auto parts; auto dealers; and consumers who bought vehicles that had higher-priced parts because of price-fixing and bid-rigging.

In June 2012, Autoliv, a manufacturer of automotive safety systems including seat belts, agreed to plead guilty and to pay a $14.5 million criminal fine for its role in a conspiracy to fix the prices of seat belts, air bags and steering wheels installed in U.S. cars.

Autoliv said it did “not admit any liability and is settling for the purpose of avoiding the uncertainty, risk, expense and distraction of further class-action litigation.”

The Swedish company will pay $40 million to the direct purchaser settlement class, $6 million to the auto dealer settlement class, and $19 million to the vehicle buyer class. Autoliv expects to record an expense of $65 million in its second-quarter 2014 results.

Takayoshi Matsunaga, an employee of Autoliv and former vice president of the Toyota Global Business Unit at Autoliv Japan, agreed last year to serve one year and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.

This is the second major settlement. In January, Japanese auto supplier Nippon Seiki Co. Ltd. agreed to pay $4.56 million in a similar settlement. The firm in 2012 pleaded guilty and agreed to pay a $1 million criminal fine for its role in a conspiracy to fix prices of instrument panel clusters.

The Justice Department said Nippon conspired to rig bids for and to maintain prices of instrument panel clusters sold in the United States from at least as early as April 2008 until at least February 2010.

The Justice Department’s investigation has snared more than two dozen companies around the world — and other governments are investigating.

On May 22, a Detroit federal grand jury returned a two-count indictment against an executive of a Japanese manufacturer of automotive parts for his participation in an alleged conspiracy to fix prices of heater control panels and for obstruction of justice for ordering the destruction of evidence.

The indictment charged Hitoshi Hirano with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize and maintain the prices of heater control panels sold to Toyota Motor Corp. Hirano, who served as an executive managing director at Japanese-based Tokai Rika Co. Ltd., was also charged with knowingly and corruptly persuading, and attempting to persuade, employees of Tokai Rika to destroy documents and delete electronic records.

Tokai Rika, which produces automotive parts, including heater control panels, pleaded guilty in December 2012, for its role in the conspiracy and to obstruction of justice, and was sentenced to pay a $17.7 million criminal fine.

Including Hirano, 34 former and current auto parts executives have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry, 24 of whom have pleaded guilty or agreed to plead guilty. Of those, 22 have been sentenced to serve prison terms ranging from a year and one day to two years. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay more than $2.3 billion in total fines.

About 25 million cars sold in the U.S. since 2003 were affected; the government has said Detroit and major Japanese automakers are among the victims.