Parts firm to pay for price fixing

DETROIT (AP):Carmakers were forced to pay more for auto parts because a group of suppliers conspired to raise prices for more than a decade, the Justice Department said Thursday.

The scheme, revealed in documents filed with the federal court in Detroit, likely raised prices that consumers paid for cars.

In the documents, federal prosecutors charged a Japanese company and three of its executives with conspiracy to restrain trade. Prosecutors said the company, Furukawa Electric Co of Tokyo, agreed to plead guilty and pay a US$200 million fine, while the executives also will admit guilt and serve prison time in the United States (US).

rigged prices

Furukawa, which makes automobile wiring, is part of a wider investigation into an auto parts cartel that rigged prices in the US and Japan, according to the documents.

"This cartel harmed an important industry in our nation's economy," said Sharis Pozen, the acting assistant attorney general for the Justice Department's antitrust division. She called the fine "one of our largest."

It was unclear how many automakers were affected by the conspiracy, how many models were affected and how much the price-fixing scheme inflated parts prices.

The Justice Department did not identify the other companies involved in the cartel.

Starting in January 2000, Furukawa conspired with other cartel members to fix prices of wiring harnesses that were sold to car manufacturers in the US and elsewhere "on a model-by-model basis," Pozen told reporters at a Washington news conference.

The harnesses are groups of wires that link electronic controls to everything from brake lights to transmissions.

probe

Pozen said the Justice Department is working with international autho-rities in the probe, though she declined to identify them.

Asked if prices were fixed and bids rigged for other auto parts, Pozen responded that the investigation is "broad".

The company and the three executives have all agreed to cooperate with the Justice Department.

The three Furukawa executives, all Japanese nationals, will serve prison time in the US ranging from a year and a day to 18 months. It is rare for foreign executives to serve any US prison time for price-fixing, much less serious felony time of more than a year behind bars.