Political Wrinkles  

Go Back   Political Wrinkles > General Forum > News & Current Events
Register FAQDonate PW Store PW Trivia Members List Calendar Search Today's Posts Mark Forums Read

News & Current Events Discuss Auto parts price-fixing probe rattles industry at the General Forum; Auto parts price-fixing probe rattles industry Associated Press | May 25, 2014 | 7:16 pm Photo - Topics: News ...

Reply
 
LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 05-26-2014, 01:22 AM
Jackass master's Avatar
Tired old ass
 
Join Date: Nov 2012
Location: on top of the mountain
Gender: Male
Posts: 5,437
Thanks: 2,946
Thanked 4,198 Times in 2,459 Posts
Default Auto parts price-fixing probe rattles industry

Auto parts price-fixing probe rattles industry
Associated Press | May 25, 2014 | 7:16 pm
Photo -
Topics: News Business Watchdog Watchdog Blog FBI Follow the Money Auto Industry Law

WASHINGTON (AP) An investigation into price-fixing and bid-rigging in the auto parts industry has mushroomed into the Justice Department's largest criminal antitrust probe ever, and it's not over yet.

The investigation, made public four years ago with FBI raids in the Detroit area, has led to criminal charges against dozens of people and companies, stretched across continents and reverberated through an industry responsible for supplying critical car components.

The collusion has also saddled U.S. drivers with millions of dollars in extra costs.

"It's a very, very safe assumption that U.S. consumers paid more, and sometimes significantly more, for their automobiles as a result of this conspiracy," Brent Snyder, a deputy assistant attorney general in the antitrust division, said in an interview.

So far, 34 individuals have been charged and 27 companies have pleaded guilty or agreed to do so, the Justice Department says. Collectively, they have agreed to pay more than $2.3 billion in fines. New cases have arisen with regularity, with Attorney General Eric Holder promising last September that investigators "would check under every hood and kick every tire."
Sign Up for the Watchdog newsletter!

The most recent development came Thursday, when an executive from a Japanese company was charged with conspiring to fix the prices of heater control panels sold to Toyota and with persuading workers to destroy evidence.

Officials say the investigation stands out not just for its scope but also for the cooperation the authorities have received from Japan, Australia and other countries. Despite the challenges of prosecuting foreign nationals, the Justice Department has won guilty pleas from a series of Japanese executives who opted to get their punishment over with rather than remain under indictment in their home countries and subject to career-crippling travel restrictions.

Though the techniques and strategies sometimes differed, the executives generally carried out the collusion by trading coded emails, meeting at remote locations and destroying documents to avoid paper trails.

With an eye toward eliminating competition and maximizing profits, they exploited an industry that experts say is in some ways vulnerable to collusion: There are a finite number of purchasers and suppliers, there's steady pressure among companies to cut prices and car parts, unlike certain products that have a great deal of variability, are generally standardized and homogeneous.

"The firms will just make more money if they're able to reach and stick to an agreement to collectively charge higher prices so that customers can't get them to bid against each other," said Spencer Weber Waller, director of the Institute for Antitrust Consumer Studies at the Loyola University Chicago law school. "The problem is, of course, it's a felony in the United States."

The Justice Department first publicly surfaced aspects of the investigation when FBI agents in Detroit raided the offices of Denso Corp, Yazaki North America and Tokai Rika. All three companies have pleaded guilty to their roles in price-fixing and bid-rigging schemes.

Since the raids, the probe has broadened to encompass about $5 billion worth of auto parts, including seat belts, ignition coils, steering wheels, air bags, windshield wipers and rubber parts that dampen vibration.

Similar cartels have formed in industries ranging from oil and gas to cement and vitamins, though there's debate among economists about how long they can last, given the constant incentive for one member to cheat the others and the tendency to collapse under their own weight as they keep growing, said Daniel Crane, a University of Michigan law professor.

But the collusion in these cases, which in some instances lasted more than a decade, was "deftly done," said Joe Wiesenfelder, executive editor of Cars.com, who has followed the auto parts investigation.

"If they get too greedy and they make their prices too high, then someone smells a rat," he said. "When they set their prices and fixed their prices, they had to do it in a way that wasn't obvious and that took into account the entire market, including suppliers that weren't involved."

Wiesenfelder said that while the collusion affected car consumers, it's hard to tell how much the investigation has been noticed by the average driver.

"It's kind of abstract to consumers," he said. "It's not that prices were fixed on cars. That would really hit home."

But there are indications the industry is chastened.

For instance, Bridgestone Corp., a tire and rubber company that pleaded guilty this year, announced that it would strengthen its compliance, discipline employees and that certain board members and executives would forfeit a portion of their compensation.

Meanwhile, the Justice Department says it's looking into additional misconduct in an investigation that bears all the hallmarks of classic antitrust law-breaking.

"This one," Snyder said, "has it all."
Auto parts price-fixing probe rattles industry | WashingtonExaminer.com
We wonder why vehicles and parts to repair them cost so much?
__________________
I don't have much ammo, but will gladly waste some on you!
Reply With Quote
  #2 (permalink)  
Old 05-26-2014, 03:26 PM
40yearfan's Avatar
Easy Living
 
Join Date: Mar 2012
Location: Phoenix, AZ.
Gender: Male
Posts: 9,970
Thanks: 2,617
Thanked 3,963 Times in 2,718 Posts
Default Re: Auto parts price-fixing probe rattles industry

Quote:
Originally Posted by Jackass master View Post
Auto parts price-fixing probe rattles industry
Associated Press | May 25, 2014 | 7:16 pm
Photo -
Topics: News Business Watchdog Watchdog Blog FBI Follow the Money Auto Industry Law

WASHINGTON (AP) An investigation into price-fixing and bid-rigging in the auto parts industry has mushroomed into the Justice Department's largest criminal antitrust probe ever, and it's not over yet.

The investigation, made public four years ago with FBI raids in the Detroit area, has led to criminal charges against dozens of people and companies, stretched across continents and reverberated through an industry responsible for supplying critical car components.

The collusion has also saddled U.S. drivers with millions of dollars in extra costs.

"It's a very, very safe assumption that U.S. consumers paid more, and sometimes significantly more, for their automobiles as a result of this conspiracy," Brent Snyder, a deputy assistant attorney general in the antitrust division, said in an interview.

So far, 34 individuals have been charged and 27 companies have pleaded guilty or agreed to do so, the Justice Department says. Collectively, they have agreed to pay more than $2.3 billion in fines. New cases have arisen with regularity, with Attorney General Eric Holder promising last September that investigators "would check under every hood and kick every tire."
Sign Up for the Watchdog newsletter!

The most recent development came Thursday, when an executive from a Japanese company was charged with conspiring to fix the prices of heater control panels sold to Toyota and with persuading workers to destroy evidence.

Officials say the investigation stands out not just for its scope but also for the cooperation the authorities have received from Japan, Australia and other countries. Despite the challenges of prosecuting foreign nationals, the Justice Department has won guilty pleas from a series of Japanese executives who opted to get their punishment over with rather than remain under indictment in their home countries and subject to career-crippling travel restrictions.

Though the techniques and strategies sometimes differed, the executives generally carried out the collusion by trading coded emails, meeting at remote locations and destroying documents to avoid paper trails.

With an eye toward eliminating competition and maximizing profits, they exploited an industry that experts say is in some ways vulnerable to collusion: There are a finite number of purchasers and suppliers, there's steady pressure among companies to cut prices and car parts, unlike certain products that have a great deal of variability, are generally standardized and homogeneous.

"The firms will just make more money if they're able to reach and stick to an agreement to collectively charge higher prices so that customers can't get them to bid against each other," said Spencer Weber Waller, director of the Institute for Antitrust Consumer Studies at the Loyola University Chicago law school. "The problem is, of course, it's a felony in the United States."

The Justice Department first publicly surfaced aspects of the investigation when FBI agents in Detroit raided the offices of Denso Corp, Yazaki North America and Tokai Rika. All three companies have pleaded guilty to their roles in price-fixing and bid-rigging schemes.

Since the raids, the probe has broadened to encompass about $5 billion worth of auto parts, including seat belts, ignition coils, steering wheels, air bags, windshield wipers and rubber parts that dampen vibration.

Similar cartels have formed in industries ranging from oil and gas to cement and vitamins, though there's debate among economists about how long they can last, given the constant incentive for one member to cheat the others and the tendency to collapse under their own weight as they keep growing, said Daniel Crane, a University of Michigan law professor.

But the collusion in these cases, which in some instances lasted more than a decade, was "deftly done," said Joe Wiesenfelder, executive editor of Cars.com, who has followed the auto parts investigation.

"If they get too greedy and they make their prices too high, then someone smells a rat," he said. "When they set their prices and fixed their prices, they had to do it in a way that wasn't obvious and that took into account the entire market, including suppliers that weren't involved."

Wiesenfelder said that while the collusion affected car consumers, it's hard to tell how much the investigation has been noticed by the average driver.

"It's kind of abstract to consumers," he said. "It's not that prices were fixed on cars. That would really hit home."

But there are indications the industry is chastened.

For instance, Bridgestone Corp., a tire and rubber company that pleaded guilty this year, announced that it would strengthen its compliance, discipline employees and that certain board members and executives would forfeit a portion of their compensation.

Meanwhile, the Justice Department says it's looking into additional misconduct in an investigation that bears all the hallmarks of classic antitrust law-breaking.

"This one," Snyder said, "has it all."
Auto parts price-fixing probe rattles industry | WashingtonExaminer.com
We wonder why vehicles and parts to repair them cost so much?
Lease a new car every 3 years and you won't have to worry about this.
__________________
__________________________________________
We are advised to NOT judge ALL Muslims by the actions of a few lunatics, but we are encouraged to judge ALL gun owners by the actions of a few lunatics.
Reply With Quote
  #3 (permalink)  
Old 05-27-2014, 12:22 PM
American's Avatar
Constitutionalist
 
Join Date: Sep 2008
Location: VA
Gender: Male
Posts: 727
Thanks: 310
Thanked 305 Times in 208 Posts
Default Re: Auto parts price-fixing probe rattles industry

Quote:
Originally Posted by 40yearfan View Post
Lease a new car every 3 years and you won't have to worry about this.
I think that's a bit pricey.
__________________
"Laws are made for men of ordinary understanding and should, therefore, be construed by the ordinary rules of common sense. Their meaning is not to be sought for in metaphysical subtleties which may make anything mean everything or nothing at pleasure." -- Thomas Jefferson

"He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
Reply With Quote
  #4 (permalink)  
Old 05-27-2014, 12:43 PM
FrancSevin's Avatar
Runs with scissors
 
Join Date: Mar 2014
Location: St Louis MO
Gender: Male
Posts: 14,915
Thanks: 10,265
Thanked 13,877 Times in 7,573 Posts
Default Re: Auto parts price-fixing probe rattles industry

As a former employee of a major leasing company, I can tell you that this would effect their pricing structures as well. So the claim is not exactly true.

On the other hand, a lease removes most of the hassles of ownership including that of disposal of a car that lost more thanthe predicted value. That is something which can seriously hurt the wallet of a private seller/buyer.
__________________
I am going to hang a Batman Costume in my closet. .......... Just to screw with myself when I get alzheimer's.
sola gratia, sola fide, sola scriptura.

I AM NOT A REPUBLICAN, I AM A FREEMAN, THE DEMOCRATS WORST NIGHTMARE
Reply With Quote
  #5 (permalink)  
Old 05-27-2014, 12:48 PM
PW Enlightenment
 
Join Date: Apr 2013
Gender: Male
Posts: 12,591
Thanks: 10,302
Thanked 8,457 Times in 5,019 Posts
Default Re: Auto parts price-fixing probe rattles industry

Quote:
Originally Posted by 40yearfan View Post
Lease a new car every 3 years and you won't have to worry about this.
According to the article, the price fixing affected all parts, not just aftermarket. That would affect the lease price as well.
Reply With Quote
  #6 (permalink)  
Old 05-27-2014, 02:57 PM
40yearfan's Avatar
Easy Living
 
Join Date: Mar 2012
Location: Phoenix, AZ.
Gender: Male
Posts: 9,970
Thanks: 2,617
Thanked 3,963 Times in 2,718 Posts
Default Re: Auto parts price-fixing probe rattles industry

Quote:
Originally Posted by FrancSevin View Post
As a former employee of a major leasing company, I can tell you that this would effect their pricing structures as well. So the claim is not exactly true.

On the other hand, a lease removes most of the hassles of ownership including that of disposal of a car that lost more thanthe predicted value. That is something which can seriously hurt the wallet of a private seller/buyer.
Quote:
Originally Posted by jimbo View Post
According to the article, the price fixing affected all parts, not just aftermarket. That would affect the lease price as well.
I was just being a smart alec.
__________________
__________________________________________
We are advised to NOT judge ALL Muslims by the actions of a few lunatics, but we are encouraged to judge ALL gun owners by the actions of a few lunatics.
Reply With Quote
Reply

Tags
auto, industry, parts, pricefixing, probe, rattles

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

Forum Jump


All times are GMT -5. The time now is 04:37 PM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2020, vBulletin Solutions, Inc.

Content Relevant URLs by vBSEO 3.2.0