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FBI Raids Three Key Japanese Auto Suppliers

Potential antitrust violations under investigation.

by on Feb.24, 2010

Denso was one of three Japanese auto electronics suppliers to be raided by the FBI.

Concerns about potential antitrust violations led the FBI to raid the U.S. offices of three major Japanese suppliers, though it is unclear if still other manufacturers are involved in the investigation.

Among the company’s targeted were Denso Corporation,  one of the world’s largest producers of automotive components and a member of the Toyota Motor keiretsu, a closely-linked network of cross-held companies that characterizes the way the auto industry operates in Japan.  Also raided were Yazaki North America and Tokai Rika.

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A spokeswoman for the U.S. Justice Department confirmed that the government is looking into possible antitrust action by automotive electronics suppliers.

“The antitrust division is investigating the possibility of anti-competitive cartel conduct,” said the department’s Gina Talamona, in a prepared statement. “We are coordinating with the European Commission and other foreign competition authorities.”  

A spokesperson for Denso said offices in Southfield, Michigan were targeted.  They oversee the supplier’s operations in both North and South America.

The company said the investigation is not believed to be related to Toyota’s ongoing safety issues, but questions have been asked about the supplier’s potential role in so-called unintended acceleration, an issue that has so far led Toyota to recall more than 8 million vehicles worldwide.

A separate, U.S. parts firm, CTS, has been blamed for providing the potentially sticky accelerator pedals covered by one of two related recalls, but in testimony on Capitol Hill, this week, Toyota’s top U.S. executive, Jim Lentz said the recalls will “not totally” resolve the problem, and there is growing concern that electronic control systems may eventually be implicated, as well.

Three Yazaki facilities, in suburban Detroit, Lexington, Kentucky, and Columbus, Ohio, were also raided.

Meanwhile, the Associated Press quoted Joe Rine, a local spokesman for Tokia Rika, as saying, “We haven’t done anything wrong. We’ll supply them with all the information” the government requests.  The Japanese firm provides parts for both Toyota and Nissan, as well as U.S. automakers General Motors and Ford Motor.

The investigation is believed to be focusing on possible steps by electronics suppliers to secretly cooperate on pricing matters in an otherwise highly-competitive segment.

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