Bridgestone Agrees US$425m Penalty in Price-fixing Probe
Motor parts and tyres producer Bridgestone Corporation has become the latest car industry supplier to plead guilty to charges of conspiring to fix the price of parts sold to motor manufacturers, following an investigation by the US Department of Justice (DoJ). It also agreed to pay a US$425m criminal fine.
The Japanese company, based in Tokyo, is the world’s largest producer of tyres and rubber car parts. The fine imposed was more than double the next-highest fine levied in the DoJ investigation because of the company’s previous conviction of conspiring to fix prices in the marine hose industry, the department said. Bridgestone paid a US$28m fine in 2011, but didn’t reveal similar activity in the motor supply chain.
The investigation revealed that between 2001 and 2008, Bridgestone met with competitors and agreed to split up the market for the rubber parts installed in vehicles to reduce vibrations. The companies then submitted false bids with inflated prices in response to requests for proposals from major car manufacturers including Toyota and Nissan, ensuring that particular suppliers won particular pieces of business.
To date, the DoJ probe has seen admissions of collusion in the market for components including fuel injectors, air conditioners and windshield wipers. A total of 26 suppliers have pleaded guilty and paid more than US$2bn in penalties. A total of 28 people have been charged.
“The management of the Bridgestone Group is fully committed to ensuring that its global operations and businesses are conducted in an ethical and legal manner,” the company said. “They sincerely regret the actions that resulted in this plea agreement and that they did not discover these activities at an earlier date.”
Bridgestone added in a news release that it first learned of the investigation in May 2012 and has been cooperating with the DoJ since then. It said it is confident the behaviour that prompted the probe ended in 2008, when the company launched new compliance efforts. The company has cancelled some bonuses that executives and board members were due to receive in March. Bridgestone also will cut some salaries and discipline employees.