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Indiana sues auto suppliers for alleged price fixing

David Shepardson
Detroit News Washington Bureau

Washington — The state of Indiana is suing two dozen auto suppliers and their affiliates over wire harness price-fixing and bid-rigging in the multi-billion dollar industry.

The suit filed in U.S. District Court in Detroit on Thursday by Indiana Attorney General Greg Zoeller comes in the wake of the Justice Department’s ongoing investigation into the auto parts industry. It is the latest entity to sue over alleged price fixing.

The state says it has been forced to pay higher prices for auto parts in seeking damages, but didn’t specify how much it is seeking. Under the law, it can win three times the amount of the damages.

Suits have been pending since 2012 by automakers, auto dealers and other governments. In October 2014 five governments, including Traverse City and Oakland County, sued the same suppliers.

Most of the firms sued have pleaded guilty in the government’s price-fixing probe and paid fines, including Furukawa Electric Co. Ltd., Yazaki Corporation, Denso Corporation, G.S. Electech, Inc. and Fujikura Ltd.

Others named in the new suit include Delphi Automotive LLP, Lear Corp, Sumitomo Electric Industries, Tokai Rika Company Ltd., Leoni AG and Yazaki Corp.

The suit alleges the scheme “artificially inflated the prices of automotive wire harness systems, which were sold throughout the State of Indiana as components of automobiles and other vehicles.”

To date, 55 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the automotive parts industry; 35 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.5 billion in criminal fines.

In 2013, the Justice Department said the international price fixing conspiracies affected more than $5 billion in automobile parts served to U.S. car manufacturers; in total, more than 25 million cars purchased by American consumers were affected.

Delphi and Lear are named because they have operated joint ventures with Furukawa. Lear also operates a joint venture that is named in the suit — Kyungshin-Lear Sales and Engineering LLC.

The suit notes that both Delphi and Lear have said they are part of investigations by the European Union.

The suit suggests the firms had “ample opportunities” to conspire. It notes they regularly attend the North American International Auto Show in Detroit and the Automotive Aftermarket Products Expo in Las Vegas.

Auto supplier price-fixing is being investigated by officials in the U.S., Europe, Australia, South Korea, Japan and Canada. A Justice Department investigation first came to light with search warrants executed by the FBI in early 2010 at the Metro Detroit U.S. headquarters of three Japanese suppliers.

Many others have sued over the price fixing including automakers, dealers and other governments. Last year the city of Richmond, Virginia, filed a similar suit.

Last year, 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.

The Swedish company paid $40 million to the direct purchaser settlement class, $6 million to the auto dealer settlement class, and $19 million to the vehicle buyer class.

Ford Motor Co. sued Fujikura in 2013 over wire harnesses. Ford’s suit said it purchased more than $10 billion in wire harnesses from 2000 through 2010, but didn't specify how much it thought the price-fixing and bid-rigging had cost it. The case is still pending.