A German unit of TRW Automotive Holdings Corp. has agreed to pay a $5.1 million criminal fine and plead guilty to fixing the prices of seat belts, airbags and steering wheels as part of an ongoing global antitrust investigation.
The company is accused of conspiring to fix prices and rig bids for the parts that were sold to two unidentified German automakers, which then installed the parts in cars sold in the United States, according to court documents.
In a plea agreement that is subject to court approval, the company also has agreed to cooperate with an ongoing U.S. Justice Department investigation.
An employee at the subsidiary, TRW Deutschland Holding GmbH, may face U.S. prosecution in the case, the company said in a statement.
TRW is accused of fixing prices of the parts from January 2008 until at least June 2011, the Justice Department said.
It is the second case filed in the department's auto parts antitrust investigation that has involved occupant safety systems sold to automakers.
The Justice Department antitrust division's probe into price fixing of auto parts has led to settlements with six other companies. The European Commission has a parallel investigation.
Scott Hammond, deputy assistant attorney general of the Justice Department antitrust division's criminal enforcement program, said in a statement: "By agreeing to fix the prices of seat belts, airbags and steering wheels, the conspirators eliminated competition for occupant safety parts in cars sold to U.S. consumers. As a result of the division's close work with its law enforcement partners, more than $785 million in criminal fines have been imposed in this ongoing investigation."
Company response
TRW CEO John Plant said in a statement:
"The actions connected with the DOJ settlement announced today conflict with what TRW stands for and are not consistent with our policies. The Company's policy is to comply with all laws and regulations, including all antitrust and competition laws.
"Once we learned of the investigation, we moved very quickly to cooperate with the DOJ and bring this matter to a resolution. In addition, we have put in place enhanced training and communications to ensure that everyone in the organization is clear that we do not tolerate such conduct."
The first case involving occupant safety systems took place in June, when Autoliv Inc., of Stockholm, agreed to plead guilty for its involvement in a conspiracy to fix prices of seat belts, airbags and steering wheels installed in U.S. cars. Autoliv agreed to pay a $14.5 million criminal fine and cooperate with the Justice Department.
More to come?
One auto supplier analyst said more fines could be on tap for both TRW and Autoliv in Europe.
"While we are encouraged to see both Autoliv and TRW recently settle with the U.S. Department of Justice, we would note the European Commission investigations remain ongoing and tend to take longer (12-36 months)," wrote Brett Hoselton of KeyBanc Capital Markets.
"Moreover, a settlement with the European Commission has potential to be costlier than the $5.1 million settlement TRW announced today with the U.S. Department of Justice."
In addition to TRW and Autoliv, five other companies have been charged in the department's investigation into the price fixing and bid rigging of auto parts: Furukawa Electric Co., Denso Corp., Yazaki Corp., G.S. Electech Inc. and Fujikura Ltd. Ten individuals have also been charged. They are facing varying fines and jail sentences.
TRW Automotive, of suburban Detroit, ranks No. 12 on the Automotive News list of the top 100 global suppliers with worldwide parts sales to automakers of $14.7 billion in 2011.
source by-http://www.crainsdetroit.com/article
