36th auto supplier pleads guilty to price fixing

David Shepardson
Detroit News Washington Bureau

NGK Insulators Ltd. said Thursday it has agreed to plead guilty to federal price fixing charges and pay a $65.3 million fine — the 36th company that has admitted wrongdoing in the Justice Department’s wide ranging auto parts investigation.

The Nagoya, Japan-based firm also pleaded guilty to obstruction of justice over the price fixing and bid rigging for ceramic substrates for automotive catalytic converters that were sold to General Motors Co., Toyota Motor Corp. and Nissan Motor Co — a pattern of conduct that lasted from at least July 2000 through February 2010.

The company admitted to destroying and concealing files, deleting emails, misleading investigators and other improper conduct.

In total, 36 firms and 30 executives have agreed to plead guilty and the Justice Department has collected more than $2.5 billion in criminal fines in one of the largest ever investigations by the anti-trust division.

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

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.

“Companies and their executives who commit antitrust crimes will be found out and punished,” said Deputy Assistant Attorney General Brent Snyder. “And if they attempt to obstruct our investigation, they will face even harsher consequences.”

Another firm — Nagoya-based NGK Spark Plug — last year pleaded guilty and agreed to pay a $52.1 million criminal fine for its role in the conspiracy.

In May, the Justice Department charged Norio Teranishi, formerly of NGK Spark Plug Co. Ltd., and Hisashi Nakanishi of NGK Spark Plug with conspiring to fix the prices of spark plugs, standard oxygen sensors and air fuel ratio sensors, sold to then DaimlerChrysler AG, Ford Motor Company, Fuji Heavy Industries — the parent of Subaru, GM, Honda Motor Co., Nissan and Toyota.

Last week, two new suppliers agreed to settle civil lawsuits stemming from the Justice Department’s massive price fixing and bid rigging investigation.

In total, nine suppliers have agreed to pay nearly $187 million to vehicle buyers. Japanese auto supplier T.RAD agreed to pay $7.41 million and Tokyo-based Fujikura Ltd. will pay $7.14 million. Another 30 lawsuits against other auto suppliers involved are pending.

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. Separate settlements for automakers and dealers top $100 million.

To date, 55 individuals have been charged in the Justice Department’s ongoing investigation into market allocation, price fixing and bid rigging in the automotive parts industry.

T.RAD Co. Ltd. previously pleaded guilty and paid a $13.75 million to the Justice Department in connection with allegations it fixed prices and rigged bids for radiators and automatic transmission fluid warmers. Fujikura,which produces automotive wire harnesses, pleaded guilty in 2012 and paid a $20 million criminal fine.

The massive civil lawsuits are consolidated in front of U.S. District Judge Marianne O. Battani in Detroit. Depositions in the 30 separate cases are underway. Last month, lawyers noted that many Japanese executives will be questioned in Japan. “Conducting depositions in Japan is difficult and expensive because depositions may only take place at the Embassy of the United States in Tokyo or the United States Consulate General in Osaka-Kobe and are governed by esoteric procedures under Japanese law,” they wrote in a legal filing.

Last year, Stockholm-based Autoliv Inc. agreed to pay $65 million to settle civil antitrust lawsuits in the United States. 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.

In April, German auto parts maker Robert Bosch GmbH agreed to plead guilty and pay a $57.8 million for price fixing — the latest auto supplier worldwide snared by a Justice Department investigation.

The Justice Department said Bosch — which has its North American headquarters in Farmington Hills and is the world's largest independent supplier — agreed to plead guilty in a conspiracy to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold around the world.