The Justice Department's ongoing price-fixing probe should chill the hearts of supplier CEOs.
That's because the probe, which started out as an investigation of wire harness suppliers, has spread to producers of safety systems, thermal products and others.
Regulators in three regions - Japan, North America and Europe - are coordinating their investigations. And some big players are involved: Delphi, Lear, Sumitomo, Yazaki, Magna, TRW, Autoliv, Valeo, Denso.
Furukawa, a Japanese supplier of wire harnesses, agreed to pay a $200 million fine, an opening salvo from the Justice Dept. that suggests penalties will be stiff.
Morgan Stanley, in an analyst's report, predicted the controversy could discourage merger activity among Tier 1 suppliers, given the government crackdown on anti-competitive practices.
Morgan Stanley also predicted that the probe could tilt the balance of parts pricing power in favor of automakers - as if they didn't have enough clout already.
Morgan Stanley's report speculates that a "typical" price-fixing collusion could boost pricing by 5 to 10 percent over normal prices. If so, it's a safe bet that automakers will try to give certain suppliers a haircut the next time they negotiate a contract.