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Auto parts price fixing investigations widen in range

Many executives of the Furukawa Business are facing jail time for their positions in a price fixing scheme that happened for almost a decade across various continents. The business seems to have been trying to illegally set the industry in numerous countries. Source for this arti-cle: Investigation deepens in auto parts price-fixing scandal

Ringleaders to face prison

Since several car manufacturers get their parts from the Furukawa Electric Business, the price fixing discovered by the business in an investigation means a lot of passenger cars and replacement parts had costs driven up by the scheme. Several ex-ecutives in the country have been convicted for price fixing after setting prices for wiring har-nesses with some other industries, according to the Boston Globe. The wiring harness is extremely essential when it comes to the electrical parts of cars.

The investigation has shown that the price fixing was way being done around the world rather than just in one nation. This was after three executives of Furukawa’s American division pleaded guilty and two of the three that pleaded guilty settled with $20,000 in fines and 15 months and one year and one day jail sentences, according to AutoBlog. As reported by the Boston Globe, Furukawa paid $200 million to the Justice Department in fines already also. The fines do not seem to be enough to cover over ten years of crime.

Problems with 20 suppliers

The probe to the Furukawa price fixing scandal, according to Crain’s Detroit Business, is expanding to more countries beyond Japan and the United States. Raids have been carried out and subpoenas issued to 19 other suppliers across six different sectors of the auto market in nations on four con-tinents.

Furukawa has been lucky so far to only get three executives convicted and to get a slap on the wrist in America with fines. Asia, European and Australia activity are all being looked at by officials now.

Unfortunately common

Though price fixing, where corporations collude to keep costs of goods high, is recognized as among the worst sins in business ethics, it does happen in automobile market and related services. According to Reuters, officials from Britain’s Office of Fair Trade are investigating the commercial vehicle divisions of Volvo, Scania and Mercedes-Benz. A raid was carried out at Mercedes’ headquarters in the U.K., and European Union authorities are in-vestigating all three.

The Detroit News reports that fuel stations often do price fixing. In fact, there are five people, including two managers, who are sit-ting on charges of violating Michigan’s antitrust laws who will be sentenced in January. These people, from Madison Heights, Michigan, conspired to keep gas pric-es high in Feb. and March.

Sources

Boston Globe

AutoBlog

Crain’s Detroit Business

Reuters

The Detroit News