Washington — – Three U.S. companies that provide foam for automobile seats pleaded guilty to price fixing on Friday. They are the latest auto suppliers to admit to illegal conduct in winning contracts in recent years.
The three firms will pay a total of $6.15 million and cooperate with the Justice Department’s investigation.
The investigation snared the three firms — Chattanooga-based Woodbridge Foam Fabricating Inc, Missouri-based Riverside Seat Co. and El Paso-based SW Foam LLC. It comes amid the government’s long-running price-fixing investigation that has resulted in dozens of Japanese firms pleading guilty to price fixing or bid rigging.
The material is low-density slab foam used in seat covers, headliners, headrests, door panels and armrests.
The Justice Department said the three firms pleaded guilty in U.S. District Court in Brooklyn and admitted to price fixing from at least April 2008 through June 2009. But unlike some other cases, the Justice Department didn’t identify which automakers paid higher prices because of the conduct.
“Today’s charges demonstrate the Antitrust Division’s commitment to holding companies accountable for conspiracies that affect components used in products that consumers rely on every day,” said Bill Baer, assistant attorney general in charge of the Department of Justice’s Antitrust Division.
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.
In total, 34 people have been charged in the 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.