For Japanese auto parts suppliers, these are deeply disturbing times. A business culture that has long overlooked collusion is under attack.
Japan's Denso Corp., which supplies major automakers worldwide and is a member of the Toyota Group, and Yazaki Corp. last week joined Furukawa Electric Co. in pleading guilty in North America to bid-rigging.
All three suppliers will pay hefty fines. Seven Yazaki and Furukawa middle managers -- all Japanese nationals -- face up to two years' jail time in the United States.
The collusion on prices and contracts -- where you agree to let me have customer A's business and I let you have customer B's -- is under attack, and not just by the U.S. Department of Justice. Japanese authorities also have significantly stepped up enforcement.
A newly invigorated antitrust watchdog in Japan is investigating collusion on prices and other activities that have long been illegal in the United States and elsewhere. Japanese suppliers no longer can take advantage of lax regulators at home to build a strong base from which to launch their overseas operations.
The crackdown by Japan's antitrust authorities, which gained momentum last year, marks a major shift toward international antitrust standards and away from Japan's old-school collusive practices.
"Regulation of antitrust issues here is getting stricter," says Kohei Takahashi, an auto analyst at JPMorgan Securities in Tokyo. He says the tougher antitrust stance is prompting a debate over the difference "between Japan's traditional pricing system and global antitrust standards."
Moreover, the Japanese investigations have spread to components that have not yet been part of any prosecutions in the United States: windshield wipers, radiators, engine starters, alternators and bearings. It hasn't been disclosed whether the U.S. Justice Department also is investigating those parts, but the assumption has been that Japanese, U.S. and European prosecutors are sharing information.
Regulators also have contacted American and European auto suppliers as part of the investigation. Japanese and U.S. regulators launched their investigations into the wire harness fixing at the same time in the winter of 2010.