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Class-action suits allege auto-parts price fixing

October 17, 2011

Class-action suits allege auto-parts price fixing

/ Detroit News Washington Bureau

Washington— Three class action lawsuits have been filed against several major auto suppliers, alleging they engaged in a “massive decade-long conspiracy to unlawfully fix and artificially raise the price” of wire harness systems.

As a result, the suits argue the higher prices raised the price of new vehicles, harming tens of millions of new car buyers. The suits seek the return of ill-gotten profits to car buyers.

The suits filed in U.S. District Court in Detroit name Troy-based Delphi Automotive LLP, Southfield-based Lear Corp., Furukawa Electric Co., Leoni AG, Sumitomo Electric Industries Ltd., S-Y Systems Technologies GmbH, Yazaki Corp and its North American unit based in Canton Township.

Two of the suits were filed Monday, while the third was filed earlier this month.

Automotive wire harness systems are electrical distribution systems used to direct and control electrical components, wiring and circuit boards — and represents a multi-billion annual business.

The suits note the U.S. Justice Department, European Union and Japan have been investigating the market for wire harness systems since at least February 2010.

The FBI has conducted raids of some auto supplier offices in Michigan. Authorities in the European Union have also conducted raids.

Last month, Furukawa said it would plead guilty to price fixing and pay a $200 million fine as part of a Justice Department settlement.

Furukawa, a supplier of automotive wire harnesses based in Tokyo, agreed to settle as part of the government’s criminal price-fixing and bid-rigging investigation.

Three executives, who are Japanese nationals, also have agreed to plead guilty and to serve prison time in the United States ranging from a year and a day to 18 months.

According to four separate one-count felony charges filed last month in U.S. District Court in Detroit, Furukawa and its executives engaged in a conspiracy to rig bids and to fix, stabilize and maintain the prices of automotive wire harnesses and related products sold to automakers in the United States and around the world.

“As a result of this international price-fixing and bid-rigging conspiracy, automobile manufacturers paid noncompetitive and higher prices for parts in cars sold to U.S. consumers,” said Sharis A. Pozen, acting assistant attorney general in charge of the Justice Department’s antitrust division. “We are going to continue to pursue this.”

The conspiracy started as early as January 2000 and lasted until at least January 2010, the Justice Department said.

Honda Motor Co. said federal authorities informed it of the investigation early last year. Furukawa Electric supplies Honda with electric wire harnesses.

A spokesman for Delphi, Lindsey Williams, said Monday that the company was aware of the suits, but had not been formally presented with the complaints.

Lear denied any wrongdoing.

“The company believes that the claims against it alleging anti-competitive behavior are completely without merit, and will vigorously defend itself in any litigation related to such claims,” the company said.

In February 2010, Lear denied any wrongdoing as part ofthe European Union’s investigation.

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