DoJ To Denso: Pay $78 Million, Go Forth And Sin No More
It was the early 2010, the Toyota witch hunt was in full swing. While Toyota executives were burnt at the stake grilled on the Hill, Denso’s U.S. offices were raided by the FBI. Denso is a major automotive parts supplier, and a member of the Toyota family. The raid was part of an on-going investigation into alleged anti-trust violations. Or so they said.
After the NHTSA, NASA and the National Academy of Sciences could not find a ghost in the machine, the Department of Justice also cleared out its case file. For a fee.
Denso and the DoJ cut a plea deal. Denso will pay a fine of $78 million “based on charges that it violated antitrust laws in connection with sales of certain automotive components” to one of its customers, Denso said today in a statement.
The fine will hit the books as a (hopefully) non-recurring one time charge in the third quarter of the fiscal year ending March 2012. It is said to have “no material effect on the Company’s financial forecast for the fiscal year.”
Internally, there is some finger rapping: Denso’s chairman, president and some board members and executive directors have to “voluntarily return 30 percent to 10 percent of their compensation for a three-month period starting in February 2012.”
Another supplier, Yazaki Corp., did not get off as easily. The company agreed to plead guilty to U.S. charges and pay a $470-million fine, says the LA Times. Even more painful, four of its executives are to serve prison terms of up to two years, the paper says.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Why do you imply that the DoJ investigation was part of the NHTSA SUA investigation? 2 of the first posts were obviously confused by this. They are clearly 2 different separate fines for separate issues.
Intentional obfuscation or bad writing? Not to mention using the word "fee" in one paragraph, and then "fine" in another. And isn't the Yakuza $470M fine a bigger story?
This piece is really below the high grade established for TTAC. Apart from the snarky, suggestive style (which we can deal with), it conflates two completely separate investigations: the "unintended acceleration" problem in certain Toyota hybrid engine vehicles (possibly traced to a sticky accelerator sub-assembly some of which were supplied by Denso) and garden-variety price fixing, apparently engaged in by some parts suppliers. Just so you know, Bertel, the U.S. always prosecutes price-fixing criminally (U.S. antitrust laws provided for both criminal and civil penalties). Hence the FBI executing search warrants, etc. The individuals involved in making the price-fixing scheme work always go to jail if convicted. Most plea deals involve jail time as well, but with the government recommending brief sentences. Occasionally, for a small player, the government will go along with a recommendation of probation only . . . but they'll still insist on a a guilty plea to a felony. In a price-fixing investigation (which, necessarily, involves multiple actors), there's a basic rule which all lawyers involved know: the first defendant in the prosecutor's door gets the best deal, because one settlement with an alleged conspirator (which always involves that conspirator testifying and waiving his 5th amendment immunity from self-incrimination) increases the pressure on the others to capitulate. The suggestion that this antitrust prosecution is part of some U.S. government/ government motors plan to harass Toyota (unlike Transportation Sec'y LaHood's witch hunt for runaway Toyotas) is just irresponsible.