Auto suppliers on edge as more charges are likely

Article by Christian A., on October 10, 2011

It’s likely that more charges will be filed over the global price-fixing allegations against Furukawa Electric Co., making the global supply chain wary, according to legal experts. The U.S. government had imposed a $200 million fine on the Japanese supplier.

Three executives are also set to plead guilty before the U.S. District Court in Detroit for their role in global price-fixing among automotive wire-harness suppliers found in three continents. According to the U.S. Department of Justice, this fine is the biggest judgment that its antitrust division has gotten from a Michigan prosecution or an automotive firm.

In fact, it may even rank as one of the 10 largest fines ever, says Autonews. Lee Goldman, professor of antirust law at the University of Detroit Mercy School of Law and former litigation attorney for the Federal Trade Commission, said that other suppliers should be concerned with Furukawa's plea deal. He explained that Furukawa’s actions indicate that the other firms are “big trouble” because Furukawa’s admission of collusion will involve others since it can’t collude by itself.

The suppliers can’t plead the Fifth Amendment anymore on the witness stand if and when someone is tried. Three of Furukawa’s local employees of Furukawa will plead guilty for having violated the Sherman Antitrust Act.

They will serve time at U.S. prisons under a deal with the Justice Department, from between a year and 18 months. These executives are: Hirotsugu Nagata, former CFO of U.S. subsidiary American Furukawa Inc., and Junichi Funo and Tetsuya Ukai. Both of them are former managers in American Furukawa's Honda sales division.

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