Multimillion Dollar Fine Levied in Auto Parts Fixing Case

Posted March 11, 2015

Showa Corp., a Saitama-Japan-based auto parts manufacturer, has agreed to plead guilty to a charge of price fixing. The company will pay a fine of $19.9 million, the U.S. Department of Justice has announced.

The single felony charge was filed in the U.S. District Court for the Southern District of Ohio in Cincinnati. It alleged that Showa was involved in a conspiracy to “suppress and eliminate competition in the automotive parts industry” by rigging bids and fixing prices for certain pinion-assist type of electric powered steering assemblies which were sold to Honda Motor Co., as well as some of its U.S. subsidiaries.

Showa manufactures and sells pinion-assist-type electric powered assemblies. They provide power to the steering gear pinion shaft from electric motors to help with the vehicle’s steering.

From early 2007 to approximately late September 2012, Showa and other companies were involved in fixing bids and price quotes on pinion-assist electric powered steering assemblies that were to be submitted to Honda. Showa submitted the quotes and sold the pinion-assisted-type electric powered steering assemblies at non-competitive prices.

Department of Justice Comments on Auto Parts Fixing Case

Bill Baer, the Assistant Attorney General in charge of the Department of Justice’s (DOJ) Antitrust Division, stated that the Showa’s guilty plea marks the 27th time a company has been held accountable for fixing prices on parts used to manufacture cars in the U.S.

According to the DOJ, the conspirators kept their activities secret by using code names. They also met at remote locations to avoid detection. Showa has agreed to cooperate with the Department as it continues its ongoing investigation. The company’s plea agreement is subject to approval by the court.

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