DETROIT (Oct. 31, 2:10 p.m. ET) — The price-fixing scandal that has enmeshed a Japanese supplier of wire harnesses is now a far-reaching probe of global suppliers of other auto parts.
Using history — and almost any TV cop show — as guides, it now becomes a race to see who will sing to federal prosecutors in an effort to win a lighter punishment. And federal prosecutors dangling tasty plea-bargain deals can be very persuasive.
Since the Furakawa Electric Co. scandal unfolded, the FBI has conducted raids on U.S. offices of three suppliers of safety equipment, although the Justice Department will not give details. And Detroit defense lawyers with a track record in price-fixing litigation say the drama has just begun.
‘Tip of the iceberg'
“Folks, this is the tip of the iceberg,” said Matthew Leitman, a lawyer for the Detroit law firm Miller, Canfield, Paddock and Stone who has represented companies in previous price-fixing investigations.
Measured by buzz alone, the price-fixing case is easily the biggest story in Detroit's supplier community. Last week the Society of Automotive Analysts hosted presentations by Leitman and two other attorneys on the topic of price-fixing.
Leitman does not claim to have inside information about the probe, but he offered a compelling scenario of the pressure the Justice Department can apply. In short, the sooner you cooperate, the lighter the penalties.
An example: A supplier under investigation for price-fixing involving sprockets could step forward with information about a separate widget cartel. The company that provides information might not be penalized in the ensuing widget probe and would receive lesser penalties in the sprocket investigation.
A complete version of this story is available in the Oct. 31 edition of Automotive News, and on autonews.com.