Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Toyo to plead guilty to participating in two auto parts conspiracies, (Nov 26, 2013)

By Jeffrey May, J.D.

Japan-based Toyo Tire & Rubber Co. Ltd. has agreed to plead guilty and to pay a $120 million criminal fine for its role in two separate conspiracies to fix the prices for automobile parts, the Department of Justice Antitrust Division announced today. In addition to paying the fine, the company has agreed to cooperate with the government’s investigation under a plea agreement, which is subject to court approval (U.S. v. Toyo Tire & Rubber Co. Ltd., Case 3:13-cr-00529-JJH).

According to the charges filed today in the federal district court in Toledo, Toyo conspired to allocate sales of, to rig bids for, and to fix the prices of automotive anti-vibration rubber parts it sold to various automobile manufacturers from approximately March 1996 to May 2012. Automotive anti-vibration rubber parts are comprised primarily of rubber and metal and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration.

Toyo also has admitted to participating in a conspiracy involving automotive constant-velocity-joint boots sold to U.S. subsidiaries of GKN plc, a British automotive parts supplier. According to this second count of the information, this conspiracy lasted from about January 2006 until about September 2010. This appears to be the first Justice Department action involving automotive constant-velocity-joint boots, which are composed of rubber or plastic and are used to cover the constant-velocity-joints of an automobile to protect the joints from contaminants.

The proposed plea agreement from Toyo comes less than one week after two Japanese nationals—Masao Hayashi and Kenya Nonoyama—were indicted by a federal grand jury for their alleged roles in a conspiracy to fix prices for anti-vibration parts. Although Toyo was not named in that charge and neither Hayashi nor Nonoyama were identified in the latest filing, these individuals are reportedly executives of Toyo.

Toyo, which has subsidiaries in Kentucky and Georgia, is the 22nd company to be charged in the Justice Department’s ongoing investigation into the automotive parts industry. All 22 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.8 billion in criminal fines, according to the Justice Department.

Attorneys: Christine M. O’Neill for Department of Justice. Scott R. Lassar (Sidley Austin) for Toyo Tire & Rubber Co. Ltd.

Companies: Toyo Tire & Rubber Co. Ltd.; GKN plc

News: Antitrust AntitrustDivisionNews