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Kayaba, Sumitomo to pay millions for price-fixing in US

Kayaba Industry Co, which does business in the US as suspension parts maker KYB, and Sumitomo Electric Industries are facing payments in the millions to settle price-fixing cases about the components that they make. As part of the Department of Justice's ongoing crackdown of price fixing in the auto industry, KYB agreed to pay $62 million and pleaded guilty to conspiracy to set the cost of shock absorbers from the mid '90s through 2012. The company allegedly worked with co-conspirators to keep the cost of the parts high, and those components then made it into vehicles from Honda, Kawasaki, Nissan, Subaru, Suzuki, and Toyota. "Any collusive agreement among competitors to restrict price competition undercuts our free enterprise system and violates the law," said Carter M. Stewart, US Attorney of the Southern District of Ohio, in the DoJ's announcement. Over the past few years, the DoJ has brought cases against 37 parts suppliers and 55 executives, leading to over $2.6 billion in fines. The investigations haven't always been so successful – some of the Japanese execs fled from the US to avoid prosecution. Critics allege that price fixing is simply how business is done. According to Automotive News, Sumitomo Electric Industries is also facing a $50 million settlement in a civil lawsuit that's related to price fixing of parts like wiring harnesses and heater control panels. The plaintiffs include owners and dealers that purchased vehicles with these parts. The company asserts that the violations are from before 2010, and it now has different process in place to avoid further violations. KYB Agrees to Plead Guilty and Pay $62 Million Criminal Fine for Fixing Price of Shock Absorbers Kayaba Industry Co. Ltd., dba KYB Corporation (KYB) has agreed to plead guilty and to pay a $62 million criminal fine for its role in a conspiracy to fix the price of shock absorbers installed in cars and motorcycles sold to U.S. consumers. According to charges filed today, KYB conspired from the mid-1990s until 2012 to fix the prices of shock absorbers sold to Fuji Heavy Industries Ltd. (manufacturer of Subaru vehicles), Honda Motor Co. Ltd., Kawasaki Heavy Industries Ltd., Nissan Motor Company Ltd., Suzuki Motor Corporation and Toyota Motor Company, including their subsidiaries in the United States.

Subaru suppliers rely on gray market labor

The Subaru Forester is currently the Japanese brand's bestselling model in the US. A new investigation by Reuters is making some scathing allegations about how the popular model is actually made, though. The piece claims that many of Subaru's suppliers in Ota, Japan, are using low-paid foreign workers and asylum seekers to produce components that go into the CUV. The report says that these laborers are coming from places like China and Bangladesh, and they allegedly receive a pittance compared to their Japanese counterparts. Many said that they get about $6.60 an hour, but employment brokers can take a large portion of that pay. At just four suppliers Reuters estimates there are 580 foreign workers, or about 30 percent of the total workforce. The situation has turned Ota into a cultural melting pot because of the significant population of immigrant labor. The problem stems in part from Japan's tiny labor market, and the country's odd asylum system that doesn't allow some applicants to work legally. These suppliers produce many components for the Forester, including the seats, shocks, and fuel tanks. Reuters admits that the businesses have contracts with other Japanese automakers, as well, but Subaru receives the main focus of this piece, which you can read in full, here. When asked for comment about Reuters' report, Subaru of America provided Autoblog with the following statement: "Fuji Heavy Industries does not condone the exploitation of any class of worker, either in its own operations or within its supply chain. FHI expects all employees to be treated fairly, with dignity and respect and to be provided with appropriate workplace protections. The FHI CSR policy respects and adheres to the law and regulations of business as well as upholding human rights and international standards of behavior and the ethical standards of our stakeholders. Our supply chain network has been made aware of our policy and expectations."

Takata air bag recall list

The National Highway Traffic Safety Administration confirmed yesterday that 33.8 million vehicles with Takata airbags are going to be recalled. It's the largest recall in automotive history. The already record-breaking rate of automotive recalls this year shows no signs of slowing down, especially since millions of cars with defective airbags made by global supplier Takata are under ongoing scrutiny. The federal government is warning owners that inflator mechanisms in the air bags can rupture, causing metal fragments to fly out when the bags are deployed. The faulty air bags have already been blamed for multiple deaths. How do you know if your vehicle is safe? The National Highway Traffic Safety Administration released an updated list of vehicles under recall. Sometimes however, the government's website will crash and the list may not be complete. Check your VIN at the NHTSA website to make sure. The list of cars affected by the recall has not been released, but seem to span multiple models over the years for many of the automakers.