TRAVERSE CITY, Mich. -- There's three dozen people in the auto supply chain who should be on the mind of everyone attending the Management Briefing Seminars here this year.
For more than three years, the U.S. Department of Justice’s Antitrust Division and its counterparts in Europe and Japan have been working over automotive suppliers like a boxer on a heavy bag. Investigators accuse suppliers of conspiring to rig their bids on contracts stretching back over a decade.
To date, 36 individuals and 27 companies have been indicted or convicted in the United States. Together, they have agreed to pay more than $2.3 billion in fines for their roles in what the government now calls the largest price fixing investigation in U.S. history.
And it's still ongoing.
So far, most but not all of the automotive executives who have pleaded guilty in the case have been Japanese executives working for Japan-based suppliers doing business in the United States. Collectively, they have admitted to overcharging for parts almost every major automaker operating in the United States.
The stain these convictions have left on the automotive supply base has been masked, at least temporarily, by rising industry sales and supplier efforts to keep up with demand. But make no mistake; the stain is still there. It threatens supplier relationships across the industry, even though the majority of suppliers never knew what was going on.
So far, investigators haven’t reached very far into the C-level suites of automotive suppliers. But I would bet that day is coming. Federal investigators have shown that they intend to watch the automotive supply chain closely.
Given the width and breadth of this investigation so far, supplier executives may be looking over their shoulders for many years to come.