Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
News
February 06, 2012 01:00 AM

Japan gets tough on auto industry collusion

James B. Treece
Hans Greimel
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    TOKYO (Feb. 6, 11 a.m. ET) — For Japanese auto parts suppliers, these are deeply disturbing times. A business culture that has long overlooked collusion is under attack.

    Japan's Denso Corp., which supplies major automakers worldwide and is a member of the Toyota Group, and Yazaki Corp. last week joined Furukawa Electric Co. in pleading guilty in North America to bid-rigging.

    All three suppliers will pay hefty fines. Seven Yazaki and Furukawa middle managers — all Japanese nationals — face up to two years' jail time in the United States.

    The collusion on prices and contracts — where you agree to let me have customer A's business and I let you have customer B's — is under attack, and not just by the U.S. Department of Justice. Japanese authorities also have significantly stepped up enforcement.

    A newly invigorated antitrust watchdog in Japan is investigating collusion on prices and other activities that have long been illegal in the United States and elsewhere. Japanese suppliers no longer can take advantage of lax regulators at home to build a strong base from which to launch their overseas operations.

    The crackdown by Japan's antitrust authorities, which gained momentum last year, marks a major shift toward international antitrust standards and away from Japan's old-school collusive practices.

    “Regulation of antitrust issues here is getting stricter,” says Kohei Takahashi, an auto analyst at JPMorgan Securities in Tokyo. He says the tougher antitrust stance is prompting a debate over the difference “between Japan's traditional pricing system and global antitrust standards.”

    Moreover, the Japanese investigations have spread to components that have not yet been part of any prosecutions in the United States: windshield wipers, radiators, engine starters, alternators and bearings. It hasn't been disclosed whether the U.S. Justice Department also is investigating those parts, but the assumption has been that Japanese, U.S. and European prosecutors are sharing information.

    Regulators also have contacted American and European auto suppliers as part of the investigation. Japanese and U.S. regulators launched their investigations into the wire harness fixing at the same time in the winter of 2010.

    Kazuhiko Takeshima, chairman of Japan's Fair Trade Commission, says such close coordination with overseas counterparts is key in the age of globalization: “To address international cases like above, it is indispensable to establish close cooperation with the overseas competition authorities.”

    Consider these recent actions by Japan's Fair Trade Commission:

    — On Jan. 19, it fined Yazaki ¥9.6 billion, or about $125.8 million; Sumitomo Electric Industries Ltd. $27.5 million; and Fujikura Electric Co. $14.4 million for colluding in electric wire pricing. Another company, Furukawa Electric Co., admitted to helping rig bids but avoided any fine because it had provided the tip that launched the investigation.

    — In July, the commission began investigating four bearing manufacturers on similar suspicions of price fixing.

    — Also in July, it raided the offices of Denso and six other Japanese parts companies as part of a wider investigation into suspected price fixing related to windshield wipers, radiators, engine starters and alternators that may stretch back as far as 2002.

    Also raided: Mitsubishi Electric Corp., Hitachi Automotive Systems Ltd., Calsonic Kansei Corp., Mitsuba Corp., T.RAD Co. and Denso subsidiary Asmo Co.

    The commission is newly energized. Japan overhauled its antitrust act in 2005 and again in 2009 to broaden the scope of violations and increase penalties.

    The most recent change took effect in January 2010. The number of the commission's investigators nearly doubled to 452 in 2011 from 263 in 2000.

    As a result, the amount of penalties levied by the commission against bid rigging and cartels across all industries has exploded over the past decade, reaching $946.1 million in 2010 vs. just $28.7 million in 2001.

    This is a major change in the commission's behavior.

    Michael Smitka, an economics professor and specialist in Japanese auto-industry labor economics at Washington and Lee University, says the Fair Trade Commission was largely toothless before the laws were changed.

    “They'd have occasional campaigns to get someone to give them a complaint so they could justify their existence,” says Smitka, who is also a judge for the Automotive News PACE Awards, which recognize automotive suppliers' innovations.

    Most of the commission's actions were prompted by “small businesses griping about late payments” from big-business customers and were not related to antitrust actions, he says.

    The increased scrutiny in Japan comes as Japanese suppliers struggle to adjust to a new environment of competitive bidding and global procurement. Cost-cutting carmakers are looking beyond their traditional keiretsu partners.

    Traditionally, Japan's automakers worked closely with a core group of trusted suppliers that shared almost everything from parts engineering and development to costs, says JPMorgan's Takahashi. Carmakers got good prices; suppliers got steady orders.

    But it began to unravel a little more than a decade ago, when Nissan Motor Co., then on the brink of bankruptcy, began looking outside its keiretsu system of go-to suppliers for lowest bidders.

    Japanese automakers have largely watched silently as their suppliers get snagged. On one hand, they don't want to be gouged on parts prices. But, Takahashi says, they are so intimately involved in co-developing parts, they are well aware of pricing policies to begin with.

    Toyota Motor Corp., which owns 23 percent of Denso, declined to say how much financial damage it may have incurred from the price fixing. But it didn't issue a statement of blanket support for its supplier, either.

    “Complying with the law is a fundamental prerequisite for any supplier to conduct business with Toyota,” spokeswoman Amiko Tomita said. “If the companies subject to this announcement violated antitrust laws, then we see this as a serious issue.”

    RECOMMENDED FOR YOU
    Ad panels say ABA overstated PET bottle recycling efforts
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Redline's ‘outrageous cultural behaviors' retain top employees
    2
    Material Insights: Polypropylene production — both virgin and recycled — in the spotlight
    3
    Redline buys Georgia-based Quality Holdings
    4
    Illinois, Utah see chemical recycling battles
    5
    Plastifab diversifies molding with Marchel acquisition
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified