BRUSSELS (Reuters) -- Lear Corp. is the latest supplier to be drawn into an international investigation of possible collusion among suppliers of auto electrical distribution systems.
“Lear is cooperating fully with the European Commission in their investigation, and I am confident that our company is not involved in any anticompetitive practices," said CEO Bob Rossiter in a statement.
The European Commission said yesterday that it had conducted raids in several EU nations this week against a number of parts suppliers. Experts said the probe could be focused on agreements among the companies not to compete.
German parts supplier Leoni AG and some of its rivals are being investigated by European Union antitrust regulators for suspected illegal collusion and could be fined if found in breach of the rules.
European authorities raided Leoni and other companies the same week that the FBI raided several Japanese suppliers' offices in the United States, also in connection with a probe of suspected antitrust actions. Japanese authorities also raided suppliers there, the Wall Street Journal reported.
Daniel Crane, an antitrust expert at the University of Michigan, told the Detroit Free Press that FBI participation indicates a criminal investigation and could suggest authorities are looking at agreements among the companies not to compete in certain areas.
He said authorities could be looking for evidence of price fixing or a practice called market division -- an agreement by companies to make different parts and thereby not compete with each other.
“Those are the only kinds of things they would prosecute criminally,” he said.
John Shook, senior adviser at the Lean Enterprise Institute and a Toyota manager from 1983 to 1994, told the Free Press the companies raided by the FBI don't make the same products and don't compete with each other, which would seem to rule out the issue of price-fixing and suggest market division.
“Suppose the suppliers had an agreement that we won't compete with you for making this part if you won't compete with us for making that part. ... Hence the reason they're not making the same parts,” Crane said.
“The Commission has reason to believe that the companies concerned may have violated European Union antitrust rules that prohibit cartels and restrictive business practices,” the European Union executive said in a statement today.
The Commission's investigation is focused on automotive electrical distribution systems, known as wire harnesses, which link a car's computers to the various mechanical parts of the vehicle.
The Commission did not identify the firms but said it was coordinating its investigation with other regulators worldwide.
On Wednesday, the FBI said it had raided U.S. offices of Denso Corp. and Tokai Rika Co., both affiliates of Japan's Toyota Motor Corp., and privately held Yazaki Corp. for possible anti-competitive cartel behavior.
“The antitrust division is investigating the possibility of anti-competitive cartel conduct of automotive electronic components suppliers,” Gina Talamona, deputy director of public affairs for the Department of Justice in Washington, D.C., said yesterday. “We are coordinating with the European Commission and other foreign competition authorities.”
Talamona declined to comment further, saying the investigation was ongoing.
In Japan, investigators searched the offices of Yazaki, Sumitomo Electric Industries Ltd., Furukawa Electric Co. and several other Japanese electric cable makers over suspected collusion, an official with the Fair Trade Commission told the Wall Street Journal.
The FBI took documents from the offices of Yazaki Corp. in Canton, Mich., Lexington, Ky., and Columbus, Ohio; Denso International America Inc., in Southfield, Mich.; and Tokai Rika Co., also known as Tram Inc., in Plymouth, Mich., spokeswomen for the FBI and the companies confirmed.
“In connection with the international inquiry of the EU Commission there are also investigations [being carried out] at our company,” a spokesman at Leoni said.
Robert Bosch, the world's biggest automotive parts supplier, and French peer Valeo said they were not involved in the EU probe.
Bridgette LaRose-Gollinger, senior public relations specialist at Denso, said the search was related to “alleged violations of U.S. anti-trust law and Denso is fully cooperating with the investigation.”