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Ford sues Japanese wiring supplier over price-fixing claims

By: Gabe Nelson
AUTOMOTIVE NEWS

July 17, 2013

WASHINGTON — Ford Motor Co. has taken one of its Japanese suppliers to court over claims that the supplier took part in a long-running conspiracy to fix prices of key wiring components.

The lawsuit, filed Tuesday in U.S. District Court in Detroit, alleges that Fujikura Ltd. and a suburban Detroit subsidiary, Fujikura Automotive America, coordinated with other suppliers from January 2000 until at least February 2010 to set artificially high prices on wire harnesses supplied to Ford.

Ford says in the lawsuit that it spent $10 billion over that period on wire harnesses, which link all of the electronic systems built into cars, and "was forced to pay substantially higher prices for wire harnesses than it would have paid absent the conspiratorial conduct."

The lawsuit does not say how much Ford believes it lost, but the automaker wants its money back. The lawsuit seeks triple damages for Ford's losses, as allowed by law.

A spokeswoman for Fujikura did not immediately reply today to a message seeking comment on the lawsuit.

The lawsuit is just the latest in a series of allegations of global price-fixing and bid-rigging in the multibillion-dollar market for wire harnesses, which Ford describes as "the nerve center of every vehicle."

A government probe into the market became known to the public in 2010, when FBI agents raided the U.S. offices of Yazaki North America Inc., Denso International America Inc. and Tokai Rika Group North America.

So far, the U.S. Department of Justice has levied $828 million in fines, convicted 15 executives of wrongdoing and secured guilty pleas from 10 suppliers. The latest one ensnared was Diamond Electric Manufacturing of Osaka, Japan, which will plead guilty to price-fixing charges and pay a $19 million fine, the department said Tuesday.

The government probe could spread farther. The investigation "has grown over time and is broader than what we've announced so far," said Scott Hammond, the deputy assistant attorney general, in February.

The investigation also has spread to Europe. Reuters reported that the European Commission fined four wire-harness suppliers $182 million last week for their role in cartels that affected Toyota, Nissan, Honda and Renault.

The global market for wire harnesses was $26.9 billion in 2010, according to data from the market research firm Research in China cited in Ford's lawsuit.

The Detroit News reported the suit on Tuesday.