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August 03, 2016 02:00 AM

Nishikawa agrees to pay $130 million fine for price fixing

John Irwin
Automotive News
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    WASHINGTON—Japanese supplier Nishikawa Rubber Co. has agreed to plead guilty and pay $130 million in one of the stiffest penalties in the U.S. Justice Department's ongoing investigation into industrywide price fixing and bid rigging.

    Nishikawa, which produces sealing products such as vehicle weatherstripping, agreed to plead guilty to conspiring with other suppliers to fix prices and rig bids for those parts between 2000 and “at least September 2012,” the Justice Department said Wednesday, Aug. 3.

    The supplier, based in Hiroshima, Japan, sold the parts to Honda, Toyota and Subaru, according to charges filed Wednesday in U.S. District Court in Kentucky. It has U.S.-based subsidiaries in Topeka, Inc., and Novi, Mich.

    Nishikawa's $130 million fine, which is still subject to court approval, would be one of the largest in the Justice Department's investigation into price fixing, which has become the largest antitrust enforcement effort in U.S. history.

    The department says 45 companies and 64 executives have been charged, and more than $2.8 billion in fines have been issued.

    “Nishikawa has agreed to pay a steep price for its participation in a conspiracy that victimized consumers in both the United States and Canada,” Brent Snyder, the deputy assistant attorney general, said in a statement. “However, Nishikawa deserves credit for acknowledging their conduct, accepting responsibility and charting a new path toward compliance and remediation.”

    The agreement comes after Keiji Kyomoto, a former Nishikawa executive, pleaded guilty to price fixing and bid rigging in April. Kyomoto, one of three former Nishikawa executives to be charged by the Justice Department in 2015, was sentenced to 18 months in prison and was fined $20,000.

    Nishikawa was charged with violating the Sherman Antitrust Act by colluding with other suppliers to “suppress and eliminate competition in the automotive parts industry.” Nishikawa and its alleged co-conspirators worked together to sell Toyota Motor Corp., Honda Motor Co. Ltd. and Subaru the parts at “noncompetitive prices” and were charged with “employing measures to conceal their conduct” by deleting “documents referencing coordination with competitors.”

    A representative for Nishikawa could not be reached for comment.

    The Justice Department said it worked with the Canadian government's Competition Bureau while investigating Nishikawa to examine affected parts built in the U.S. and sent to Canada for vehicle assembly. The Canadian government will “not pursue further enforcement of this action,” the Justice Department said.

    Denso Corp., the second-largest global auto supplier, agreed in July to pay $255 million in settlements between two class action lawsuits representing U.S. dealerships and consumers.

    The Denso settlements were set to total $193.8 million for consumers and $61.2 million for dealerships.

     Jack Walsworth, Automotive News, contributed to this report.

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