DETROIT -- The price-fixing scandal that has enmeshed a Japanese supplier of wire harnesses is now a far-reaching probe of global suppliers of other auto parts.
Using history -- and almost any TV cop show -- as guides, it now becomes a race to see who will sing to federal prosecutors in an effort to win a lighter punishment. And federal prosecutors dangling tasty plea-bargain deals can be very persuasive.
Since the Furakawa scandal unfolded, the FBI has conducted raids on U.S. offices of three suppliers of safety equipment, although the Justice Department won't give details. And Detroit defense lawyers with a track record in price-fixing litigation say the drama has just begun.
On Sept. 29, the Justice Department of sent a blunt message to suppliers when it announced a plea deal that included a $200 million fine plus jail terms for three Furukawa Electric Co. executives.
Two of the executives already have agreed to sentences of 12 months and 15 months in return for disclosing details of their conspiracy to fix prices with other suppliers of wire harnesses. The third executive has not yet been sentenced.
Those plea deals could be bad news for other wire harness makers under investigation. Yazaki Corp. and Tokai Rika Co. have been targeted by the Justice Department.
Japan's Fair Trade Commission also raided the offices of Sumitomo Electric Industries Ltd., while the European Commission conducted unannounced inspections of the European offices of Lear Corp. and TRW Automotive Holdings.
Makers of other parts could well be drawn into the investigation. In a Web site posting describing their investigative methods, federal prosecutors promise to lighten penalties if suppliers disclose what they know about conspiracies to fix prices of entirely different components.
The Justice Department hasn't said whether its wire harness investigation has triggered probes of other automotive components. But the FBI has searched the offices of three suppliers of safety equipment: TRW Automotive Holding, Takata Corp. and Autoliv Inc.
On Oct. 13, Magna International Inc. acknowledged this month that it was under investigation for tooling bids by its subsidiary, Cosma International. Magna said it is cooperating with the FBI.
In its financial statement for the three-month period ending Sept. 30, Autoliv warned stockholders that "it is likely that ... the company's operating results and cash flows will be materially impacted" by the probe.