By on February 24, 2010

Reuters reports that the Detroit offices of Denso, a major Japanese automotive supplier, has been raided by the FBI as part of an on-going investigation into alleged anti-trust violations. Denso spokeswoman Bridgette Gollinger said the investigation was “absolutely not” related to ongoing recalls by Toyota. Denso supplies accelerator pedals (see above) and other components to the automaker. “We are cooperating with the investigation,” Gollinger said. The FBI raid was first reported by The Wall Street Journal, which said that federal investigators had also searched the Detroit area offices of two other Toyota suppliers, Yazaki and Tokai Rika. Curious coincidence of timing as this happens while Akio Toyoda testifies on Capitol Hill.

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25 Comments on “Denso US Office Raided By FBI...”

  • avatar
    Mr Carpenter

    BO clowns to Toyota: “Nice car company you’ve got there, pity if anything happened to it.”

    BO clowns to Denso: “Nice car parts supply company you’ve got there, pity if anything happened to it.”

    Best description of the current situation I’ve EVER seen, here, which pretty well sums up the underlying issues in America. And what is likely to happen next.

  • avatar

    Editors: More car talk, less teabagger propoganda.

    • 0 avatar
      Mr Carpenter

      Oh my goodness, it’s all going to go way beyond anything to do with “tea”, my friend.

      Did you read the link I provided above?

      Try opening your eyes and mind. It might save your skin later.

    • 0 avatar

      Again, Desno is also a GM supplier.

      If this is a secret Communist plot to benefit GM, they’re doing a lousy job.

    • 0 avatar

      @Mr. Carpenter:

      I read the link. Vieira’s analysis is way off the plot for a simple reason: postwar Argentina was a military dictatorship in the throes of civil war, and contemporary America is a constitutional republic with political stability that Argentinians could only dream about.

      Basically, he’s comparing Barack Obama to Juan Peron with a straight face, which tells me all I need to know about Mr. Vieira.

  • avatar

    rmwill: Don’t like it? Switch the channel!!!

  • avatar
    Mr Carpenter

    This is everything to do with absolute control and nothing to do with the business practices or quality of Toyota or Denso, in case it escaped your attention, folks….

    Isn’t it patently obvious?

    And no I’m not a Republican nor a teabagger for that matter! (And I’m certainly not an advocate of the other side of the same coin as the Republicans, the Democrats).

    The point which should be taken away is – if some of the more reputable and once influential foreign companies operating in the US in competition with US government owned entities can be treated this cavalierly, what chance does Joe average have in standing up and being heard or not being hassled?

    Once again, if the scales have fallen off your eyes, it’s pretty easy to see the pattern.

    Especially if you’ve ever studied human history and seen what other people in absolute power have done in the past. Or for that matter, what goes on all over the world in tin-pot dictatorships.

    I’ve moved every penny of my 401k to non-stock and non-bond portfolios for now.

    • 0 avatar

      If Joe Average was making faulty accelerator pedals that killed people, I’d want him to be hassled.

      And you still don’t seem to realize that Denso is a GM supplier. They won “GM Supplier of the Year” awards, even, according to their website! GM would be really hurt if they fell.

    • 0 avatar

      What you ignore is that Toyota is, for all intents and purposes, NOT a Japanese company – most of its production for this market is done here, by tens of thousands of American workers. You’re telling me that the Obama administration wants to put these guys out of business? That’s pure silliness.

      Even from a pure political standpoint, the calculus is clear: 1) Obama is going to run for re-election in two years on how many jobs he helped create, and 2) how many electoral votes does he stand to either lose or give to his opponent by putting Toyota out of business in Indiana and Kentucky, and all the states its suppliers operate in?

      Like it or not, this is NOT a free market fantasy world in which corporations truly rise and fall with the “free market.” In the real world we live in, the government is charged with keeping corporations honest, and Toyota’s no exception. The government’s doing what it’s paid to do. If Toyota doesn’t like it, it should stop stonewalling and start cleaning up its act.

      May I suggest that they spend a few billion of the dollars they made on us, and do the same thing Lexus did during their first recall, and go out of their way to help customers get their cars fixed?

    • 0 avatar

      Let me suggest an alternate reality, which you will almost surely reject:

      The Department of Justice received a tip that Denso and other competitors in the US auto parts markets were engaging in illegal activities (like price fixing, noncompete agreements, or other violations of the nation’s antitrust laws).

      The Department of Justice presented their proof to a federal judge, and the judge found probable cause in what they presented. The judge then issued a warrant.

      The Department of Justice then executed the warrant, and seized evidence to further their criminal investigation.

      Let me suggest that this is exactly the way that things went down. Because contrary to the cockamamie legal theories that the prior administration liked to throw around, the federal government doesn’t get to do this sort of thing on a whim, a vendetta, or a hunch, just because someone powerful wants it done. And in case you haven’t noticed, the federal judiciary is generally pretty darned conservative.

      This isn’t LAWLESSNESS, dude. This raid isn’t evidence of a breakdown or a government abuse, just because it is the US arm of a Japanese manufacturer and … uh … the Obama administration bailed out GM and pushed it through bankruptcy, or whatever it is that you claim is their unclean motive. This is the way that the system is supposed to work – and the way the federal government is supposed to police abuses by the private sector, to keep them from harming the interests of people like you. They enforce the law.

      Unless you have specific proof of corruption by the federal government, other than this “absolute control” conspiratorial BS that you keep slinging around, I encourage you to shut your pie hole. Because your claims are weak. They are trash. They are unfounded. And I am sick of reading this garbage by conspiracy theorists like yourself everywhere I go on the web.

      That’s it. I am done.

      [By the way – some people from ACORN are waiting for you in your garage with a stun gun and a can of Crisco. Barry Hussein Sotero is pretty mad at you for your very insightful blog posts, and ordered his thugs out to teach you a lesson, and to warn you against revealing the truth. I wouldn’t go outside for a while if I were you – ]

  • avatar

    @ BDB: If they’re trying to go after the manufacturer of “faulty accelerator pedals that killed people”, then they’d be raiding the offices of CTS. Denso’s pedals actually seem to be the good ones.

  • avatar

    I was under the same impression. Though I’d love to know why the FBI is raiding the offices of “the good guys.” Anyone have any more info on this?

    • 0 avatar

      Rep. Souder just mentioned the possibility that Denso gas pedals might be contributing to the UA (or is that SUA?) problem, but the FBI raid was over antitrust issues. Don’t expect a lot of details because the antitrust case is under seal, but as soon as my BBC appearance wraps up we will marshal the facts and report the latest developments.

  • avatar

    Ugh.. Freakin’ Ra-Tards on here sometimes.

    Denso is a GM supplier. Yazaki is (at least) a Chrysler supplier.

    GM and Chrysler are NOT “government motors”.

    Yes, Toyota is in trouble. The hearings are nothing more than posturing.

    No, we shouldn’t assume why the suppliers were raided. We should just wait and see what happens.

    Idiot conspiracy theories…

  • avatar

    WWJ News Radio 950 in Detroit has reported that this is a case of collusion between the three companies raided yesterday.

    I read an article a few years back that came to this same conclusion. With so many suppliers going out of business, the remaining ones will have more economic power against auto makers which would lead to these secret agreements between the remaining players.

    • 0 avatar

      IIRC (I speak generally, and did not look to see if their portfolios had evolved from my past knowledge):
      – Yazaki is a electrical and wiring company.
      – Takata is a safety-restraints (seatbelts, airbags, etc.) company.
      – Denso is a company making HVAC, Fuel Systems and electrical devices (like alternators).

      I can see how Yazaki might sub-supply some wiring and connectors to both Denso and Yazaki, so I would be happy if one of our Legal Eagles could explain how there could be collusion when they don’t really compete against each other.

      Is it coming down to the old transfer-price game? Is Toyota using its holdings in these companies to drive-up prices paid for its components such that it reduces its profit and domestic tax bill? (But how would that work when Toyota doesn’t wholly own these companies?)

      Even though it is very late here in Europe, I watched the Congressional Testimonies until the bitter end …

      Ed, you are right, the Rep. from Indiana did mention that Denso had been raided. He also asked if the deaths in the various accidents were due to the Denso pedal (this was affirmed by Toyoda, but I had the impression he may have mis-understood this question), then why were only the cars with the CTS pedal recalled.

      As for the Wednesday Testimony:

      1st Panel, LaHood testimony:
      – emphasized repeatedly that safety is paramont;
      – that the Agency is right-sized and properly funded (if they get the extra 66 persons they are asking for next year);
      – said today they have like 235 engineers (I thought he said yesterday they have 125 engineers, 2 of which are E/E’s), somewhere I saw that about 57 of these engineers do the ODI work;
      – couldn’t quite say if they are hiring more lawyers than engineers these days;
      – said they have no fear about hiring outside experts to augment their internal staff;
      – when NHTSA Acting-Admin. Strickland said Toyota was unresponsive to NHTSA’s concerns, LaHood told him to take the next plane to Tokyo; that he called Toyoda by phone; and that Toyota was “a little safety deaf”;
      – LaHood repeated the famous “We will continue to hold Toyota’s feet to the fire,” statement;
      – NHTSA came off looking slow itself when LaHood indicated they would do a deep review of UA, but just couldn’t bring himself to say that it was well underway, and it became clear that it not much is yet going on;
      – Some congressmen (Some were so clearly biased that I was left wondering who their big campaign-fund donors were, or what Toyota operations were in their districts) tried to paint NHTSA as being unfair, or acting on political-motivation, or having conflicts of interest, but I don’t think they were very effective in making these stick.

      2nd-panel w/Toyoda et al.:
      – delivery date of the commercially-available EDR-readers moved to middle-next-year and TMC portrayed itself as among the leaders, GM/FMC/CG, in providing this access (1-year before legally required);
      – questions were asked if Toyoda was being fairly treated by Uncle Sam (This question cut both ways and I was not sure if it was “unfair by the GM-owning Admin?” or “too fair in negotiations by NHTSA?”) … Toyoda indicated they were being treated fairly.

      – There was very moving testimony from Officer Saylor’s MIL, as well as damning testimony from the man (I forget his name)who drove to the Toyota dealer by shifting from D-N-D … car in shop, 1.5-weeks, replaced sensors, throttle-body, pedal, and still could not tell him what went wrong (and NHTSA, despite an initial call, never followed-up despite this guy calling back when he went to sell his car), and finally, Claybrook and Ditlow gave additional telling testimony (Exponent was fingered as a company that was just a bit too cozy with OEM’s to be deeply inquisitive, or independent.)
      – Claybrook pointed out that the mast minority (like 15%) of NHTSA funding is actually used for vehicles, the rest is for roadways and research; she said they need 100M USD/yr more to be effective. Also that NHTSA seems to have forgotten they are policemen and have been making too much nice-nice with the OEMs and too afraid to “bluntly frighten” consumers to bring recalled vehicles back for repair; called for better website (she called it “a nightmare”) that would aid consumers (and Congress and OEM’s) in sharing information, doing research and making early detection;
      – Ditlow said the “equipment recall” for the floormats (the one that saved Toyota 100M USD) was a joke … it didn’t address the issue, and most cars never came back; also called for open publishing of meeting minutes between NHTSA and OEM’s (until now, only attendee names are released);

      Conclusion: Toyoda et al. said and did all the right things but were not wholly convincing (despite my willingness to cut him slack and wanting to believe); Congressional bias seemed to be mostly For Toyota, but seemed more or less balanced; LaHood tried to portray his agency as right-sized, capable, and on the job (I think this will be proven to be somewhat false.)

      I’m sure there will be much more to come as all the investigations ramp-up and all the pieces begin to fall into place… there was just enough to leave me thinking that we haven’t seen the whole picture yet and that there may still be some explosive surprises.

      Ok, it 02:30 here, and I’m tired … I hope these observations are interesting to somebody.

  • avatar

    I am a “conservative”. While I want to believe conspiracy theories about the evil current Administration, the truth is that most conspiracy theories are bunk.

    Antitrust violations are a serious matter. If Denso – or anyone else – is involved in antitrust practices, the US government’s responsibility to its citizens is to prosecute such cases. I am glad they do it.

  • avatar
    Mr Carpenter

    Very well then, how about some direct quotes from Professor Vieira’s article? Conspiracy theory? Um, no. Simple facts as he sees them, yes.

    “Contemporary politicians recognize no limits to their raw power. Observe that I do not say their “authority” – because to the extent that they act outside of the Constitution, they have no legal authority whatsoever (and, in the strictest sense, no power, either). Yet most of them do imagine themselves entirely outside of the Constitution – at least in terms of the constraints it imposes on them when they act under color of law in the guise of “government”. Indeed, they openly express their disdain for the Constitution.”

    “Finally, when they (the American public) discover that the two major political parties are really one party with an empty cranium and a pair of duplicitous faces, and that changing the political personalities in office does not ameliorate the conditions that arise out of the government’s hare-brained economic policies, they will rebel against this country’s (leaders). A general disdain for legality will become the order of the day. After all, if public officials refuse to obey the Constitution, which is the sole source of their authority, what obligation has anyone else to obey any law that those officials enact or attempt to enforce? “

  • avatar
    Mark MacInnis

    As a former member of accounting management at THREE Japanese transplant companies in the US, including one of the three that was raided yesterday, I can ask where the hell the Justice department has been for the last 20 years?…..the Keiretsu system is RIFE with anti-trust violations, and tax avoidance….the whole Keiretsu system is based on money accruing at the top of the food chain, i.e, Toyota or Honda. They dictate pricing for all components…right down the auto supply chain. Toyota owns Denso, who owns Tokai Rika, who owns Toyota Tsusho, etc., etc. All of the subsidiaries are operated at a loss or at breakeven….which has the added benefit of keeping wages down, as the subsidiary companies plead poverty, so sorry, can’t pay wage increases or bonuses….and benefits. Income is essentially taxed ONCE at the parent level, which means there is no churn of tax revenue thru the system….all profits go up the chain to the paternalistic parent, who make all the decisions and control all the capital…which means since they have the cash, they can expand strategically…they also have their own banks, and the support of MITI in Japan. All of this has allowed them to expand and grow and attack markets predatorily.

    This system has benefited Honda and Toyota for DECADES….giving them the ability to out-engineer and out-manufacture the US domestics and Europeans with a cost advantage. There is no semblance of arm’s-length price negotiations. There is no real opportunity for open-quoting of the parts….any such quoting activity is lip-service to the idea of “competition”…so Honda and Toyota have a price advantage at every level of the supply chain, which accrues to the top. The fact that those suppliers also supply to the other OEM’s is smoke and mirrors. In every case I have seen, the cost of parts charged to the other OEM’s is higher than the costs charged to the benevolent parent within the Keiretsu….

    This anti-competitive activity has been going on since the 1980’s….I recognized it and have commented on it on this site, and others, in the past.

    Now, about the co-incidental timing of this attack on the Keiretsu structure and the simultaneous attacks on Toyota from a safety/quality standpoint? My only comment is que bono? Who benefits? Follow the money and draw your own conclusions….

    • 0 avatar
      Mr Carpenter

      Precisely how, in real world terms, is what the Japanese do (as you describe) any different than what the Big 3 did in the past? It’s just differerent in detail. (This does not make it right for any of them, of course).

      GM: AC, Delco-Remy, Packard Electric, Rochester, Harrison, Saginaw Gear, much of which was later morphed into Delphi, hived off and partially reabsorbed.

      Ford: Autolite, Motorcraft, much of which was later morphed into Visteon, hived off and partially reabsorbed.

      Chrysler: Mopar, Airtemp, etc.

  • avatar

    I can see it now:

    “COPS – at Denso”

    (Inner Circle music playing in the background):

    “Bad boys, Bad Boys”
    “Whatcha gonna do”
    “Whatcha gonna do when they come for you”

    “Bad boys, Bad Boys”
    “Whatcha gonna do”
    “Whatcha gonna do when they come for you”

  • avatar

    I hope Denso gets what they deserve. I am still angry at them since 2005. I had a sure job with them in Tennessee. They gave me a formal offer after working for them 3 mos. on a temporary basis, and then withdrew it, I believe, because I am a diabetic. I was diagnosed with carpal tunnel by their doctors during my pre-employment physical, but yet I have 3 highly decorated neuro and orthopedic surgeons that tested me and verified that I do not have it. They still withdrew my offer. It is 5 years later, and I still do not have carpal tunnel. You tell me who has the power? Even after the state said I have a case, no lawyer here would take it.

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