Japanese supplier exec indicted in U.S. in latest price-fixing case
G.S. Electech supplied parts to Toyota in Kentucky
A Japanese auto supplier executive was charged today in federal court with price fixing and bid rigging for speed-sensor wire assemblies his company sold to Toyota for vehicles made in the United States and elsewhere.
Shingo Okuda, a Japanese national, was indicted by a federal grand jury in the Eastern District of Kentucky for what the Justice Department says was his role in G.S. Electech Inc.'s international plot to fix, stabilize and maintain the prices of the wire assemblies, which are used as components in antilock brake systems.
Parts also were sold to Toyota's manufacturing unit based in Erlanger, Ky. G.S. Electech of Toyota City, Japan, builds, assembles and sells electrical components.
The charge is part of a broad multinational antitrust investigation in the United States, Europe and Japan that has uncovered price fixing and bid rigging in the automotive supply chain.
So far, 11 companies and 16 executives, Okuda included, have been charged in the U.S. investigation. More than $874 million in criminal fines have been dished out, while 14 individuals have been forced to pay fines and serve jail sentences that range from one year and one day to two years.
Okuda and his co-conspirators, according to the charge, executed the conspiracy by "agreeing during meetings and discussions to coordinate bids and fix prices," according to the Justice Department.
Okuda's participation goes back 10 years to January 2003 and lasted until at least February 2010, the Justice Department said.
The customer, Toyota, released this statement in response to the indictment:
"One of Toyota’s guiding principles is to honor the law of every nation in which we do business and engage in open and fair corporate activities to be a good global corporate citizen.
"Complying with the law is a fundamental prerequisite for any supplier that would like to conduct business with Toyota. If companies have in fact violated antitrust laws, then we see this as a serious issue."
This isn't the first time G.S. Electech has been linked to the ongoing investigations.
In May 2012, G.S. Electech pleaded guilty to a charge filed in U.S. District Court in Detroit for its role in another speed-sensor conspiracy and had to pay a $2.75 million fine.
The Justice Department said Okuda's charge is the first to be filed in Kentucky in its "ongoing investigation into anticompetitive conduct in the automotive industry."
Efforts to reach Okuda or a lawyer representing him were not immediately successful today.
The parts involved in the Justice Department's broad investigation include heater control panels that regulate a car's temperature, turn signal switches and wiper blades, power locks, dashboard panel instruments, airbags, steering wheels and seat belts.
Major companies the Justice Department's Antitrust Division has settled with include Autoliv, Tokai Rika Co Ltd., TRW Deutschland Holding GmbH, Nippon Seiki Col Ltd., Fujikura Ltd., Furukawa Electric Co. and Yazaki Corp.
"Those who engage in price fixing, bid rigging and other fraudulent schemes harm the automotive industry by driving up costs for vehicle makers and buyers," said John Robert Shoup, acting special agent in charge in the FBI's Detroit Division. "The FBI is committed to pursuing and prosecuting these individuals for their crimes."
Reuters contributed to this report.
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