The U.S. Justice Department reported Wednesday that the Swedish auto parts maker Autoliv has agreed to plead guilty in an auto parts price fixing conspiracy. It is the sixth company caught so far in the investigation. A Japanese executive has also agreed to take a guilty stance.
Fixing costs of safety gear
The Stockholm-based Autoliv copped to conspiring to fix the price of seat belts, airbags and steering wheels. The auto parts manufacturer has agreed to pay $14.5 million in punitive charges. It has also agreed to assist as needed in the U.S. DOJ probe.
Autoliv is the first company snagged in the probe for fixing the prices of occupant safety systems.
Autoliv’s CEO, Jan Carlson, made a humbling statement to the press:
“It is simply unacceptable that we have ended up in this situation in the first place. It goes against everything we stand for. Therefore, we have cooperated extensively with the DOJ to investigate and rectify the matter as quickly as possible and, as a result, we have reached an early resolution of our part of this industry-wide investigation.”
Five other companies caught
The other five companies that have agreed to plead guilty at this time are Denso Corp., G.S. Electech, Fujikura Ltd., Furukawa Electric Co. Ltd and Yazaki Corp. All have agreed to assist with the investigation as needed.
Individual executives also named
Ten auto parts industry executives have also promised to enter a guilty plea in the proceedings. One of those executives, Kazuhiko Kashimoto, from the Yazaki Corp., will accept responsibility for trying to fix the costs of wire harnesses, used to route a vehicle’s electrical system. He will be voluntarily going to a U.S. prison for 14 months. In addition, he has agreed to pay $20,000 in fines.
Denso Corp, G.S. Electech, Fujikura Ltd. and Furukawa Electric Co. Ltd. have agreed to criminal fines of more than $750 million combined.
All plea agreements contingent upon approval by the court.
Eliminates competition and inflates prices
Scott Hammond, deputy assistant attorney general of the Antitrust Division’s criminal enforcement program, said:
“By meeting in secret and agreeing to allocate the supply of various automotive parts, the conspirators colluded to rip off automotive manufacturers in the United States and abroad. These conspiracies eliminated competition and resulted in inflated prices to automotive manufacturers for parts in cars sold to U.S. consumers.”
Sherman Act violations
Price fixing is a punishable offense under the Sherman Act. The maximum penalty for individuals, if convicted, is 10 years in prison and a fine of $1 million. For corporations, the maximum monetary penalty is $100 million.