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Two Japanese auto parts executives indicted

David Shepardson
Detroit News Washington Bureau

Washington — The Justice Department said Friday that two Japanese automotive parts executives were indicted by a federal grand jury for an alleged conspiracy to fix prices and rig bids of bearings.

The indictment, filed in U.S. District Court in Covington, Kentucky, charges Hiroya Hirose, an executive at NSK Ltd., and Masakazu Iwami, an executive at Jtekt Corporation, with conspiring to fix the prices of bearings sold to Toyota Motor Corp. starting as early as 2001 and continuing until as late as July 2011.

To date, 46 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing, and bid rigging in the auto parts industry. Twenty-six of these individuals have pleaded guilty and have been sentenced to serve prison terms ranging from a year and one day to two years. Additionally, 30 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.4 billion in fines.

“The division will continue to pursue executives who violate the antitrust laws,” said Assistant Attorney General Bill Baer who heads the Antitrust Division. “American consumers deserve the benefit of free competition between auto parts suppliers.”

Hirose was a group sales manager in NSK’s Mid-Japan Automotive Department Office from January 2006 until at least 2009, and a general manager in the office from 2009 until at least 2011. Iwami was an executive in Jtekt’s Toyota Branch office from at least as early as 1999 until at at least June 2009.

The indictment alleges Hirose, Iwami, and co-conspirators participated in, meetings, conversations, and communications to discuss the bids and price quotations to be submitted to Toyota.

NSK, based in Tokyo, in October 2013 pleaded guilty and agreed to pay a $68.2 million criminal fine for its role in the conspiracy. Osaka-based Jtekt pleaded guilty in December and agreed to pay a $103.3 million criminal fine for its role.

Last year, 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 by this illegal conduct,” U.S. Attorney General Eric Holder said. “We will continue to check under every hood and kick every tire to make sure we put an end to this illegal and destructive conduct.”

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.

DShepardson@detroitnews.com