Kayaba Industry Co. agreed to plead guilty and pay a $62 million fine for its role in a conspiracy to fix the prices of shock absorbers sold to automakers in the U.S., federal prosecutors said today.
The Japanese auto supplier will plead guilty to fixing the price of parts installed in vehicles made by Nissan, Honda, Toyota, Suzuki, Kawasaki, and Subaru. The U.S. Justice Department said in a statement that the conspiracy took place from the mid-1990s until 2012.
Kayaba “turned the competitive process on its head by agreeing with its competitors to fix the prices of shock absorbers installed in cars and motorcycles sold in the U.S.,” Assistant Attorney General Bill Baer said in the statement.
The government said Kayaba and two other co-conspirators “agreed to allocate the supply of shock absorbers sold” and decide the prices submitted to the various automakers. In order to keep prices high, Kayaba and the others coordinated on price adjustments while keeping their activities secret, the Justice Department said.
The plea agreement comes as part of a larger, ongoing investigation into price rigging and bid rigging in the auto parts industry. Thirty-seven companies and 55 executives have been charged in the investigation, leading to more than $2.6 billion in fines, according to the department.
Similar investigations have been under way in Canada, Europe and Asia.
Kayaba’s plea agreement is subject to approval in U.S. court. The Justice Department said Kayaba has agreed to cooperate with its investigation.
Representatives from Kayaba could not be immediately reached for comment today.
Civil settlement
The Kayaba plea agreement comes the same day as it was announced Sumitomo Electric Industries will pay $50 million to consumers and auto dealerships in a civil case stemming from the same investigation.
Sumitomo, a Japanese parts supplier, will pay consumers who purchased or leased new vehicles with the parts in question and auto dealers, according to a company press release today.
U.S. class-action lawsuits have been filed against Sumitomo since 2011. Sumitomo is alleged to have broken U.S. antitrust laws in sales of wire harnesses, heater control panels and other products.
“The class actions … are based on alleged violations that took place prior to 2010, and no new violations have been discovered since that time,” the company said.
Sumitomo agreed to the settlement late on Tuesday. It is subject to final approval in court.
Hollis Salzman, an attorney with Robins Kaplan in New York, represents a group of more than 50 consumers in the litigation. Salzman said in a statement to Automotive News that the class actions go a step beyond the U.S. investigation in helping affected consumers.
“While the criminal investigation and fines imposed on the wrongdoers have served an important deterrent function, this latest settlement -- and those that have come before it -- brings us one step closer to securing full compensation for these victims,” Salzman said.
Sumitomo’s agreement brings total settlements in the consumer case to more than $200 million, the law firm said.
Sumitomo ranks No. 17 on Automotive News’ list of the top 100 global suppliers with estimated global sales to automakers of $12.33 billion in its 2014 fiscal year. Sumitomo said the settlement will have no impact on its financial forecasts for 2015.
Representatives from Sumitomo could not be reached for further comment.
Kayaba/KYB information
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