Yazaki Corporation: The Suppliers Divided the Business by Model

The Yazaki price fixing case concerned model allocations and rigged quotations for wire harnesses and instrument panel clusters, alongside a separate fuel-sender pricing agreement. Yazaki’s criminal plea describes coordination reaching even the price adjustments automakers requested. For someone who prepared quotes or handled a customer account, that is the part to recognize: the customer asked its suppliers to change a price, and the suppliers discussed their response with each other.

What Did Yazaki Plead Guilty To?

Yazaki pleaded guilty to three criminal antitrust conspiracies involving different automotive components. Its plea agreement describes bid rigging and price fixing for wire harnesses and instrument panel clusters, and price fixing for fuel senders. The Department of Justice’s March 26, 2012 announcement confirms that Yazaki entered its guilty plea on March 1, 2012.

Yazaki was a Tokyo-based manufacturer that sold the affected parts through its United States subsidiary in Michigan. In the plea, Yazaki admitted that officers and employees, including high-level personnel, participated in the conspiracies. Competitor meetings and conversations produced agreements that reached the quotations and prices automakers received.

For harnesses and clusters, the plea describes competitors dividing supply model by model and rigging bids to carry out that arrangement. For fuel senders, it describes an agreement over prices and requested adjustments.

How Do Cartels Relate to Bid Rigging?

A cartel can use rigged bids to carry out an agreement about who gets the business. In Yazaki’s plea, the wire-harness and instrument-cluster conspiracies combined that choice with agreements about price. The suppliers agreed on model allocations, rigged the quotations sent to automakers and coordinated prices.

The arrangement concerned which supplier would supply parts for particular models. A buyer could ask competing businesses for quotes while those businesses were already agreeing among themselves about the supply allocation.

For an account manager or bid analyst, the connection between an allocation and a quotation is concrete. A model assignment says where the business is meant to go. The bid sent to the automaker is where that assignment meets the customer’s purchasing process. We examine those records together because the submitted price is only one part of the decision.

Yazaki’s admitted conduct took competition out of both choices: who supplied the model and what the customer paid. Automakers lost the competition they were asking for.

The Customer’s Price Request Went Back to the Cartel

The coordination also reached automakers’ requests to change prices. Yazaki’s plea expressly includes those requests in all three product conspiracies.

A purchasing team asking for a price adjustment was opening another negotiation. The competing suppliers settled their response among themselves.

The fuel-sender passage states the mechanism directly:

For an insider, the customer’s request and the supplier’s response belong in the same account as the competitor contact. The useful connection is what the suppliers discussed and how that discussion reached the price the customer received.

Three Products, Three Parts of the Business

Yazaki’s plea gives each component its own period, sales measure and account of the agreement. The product descriptions explain where the parts fit in the car. The sales figures show how much business the plea associated with each conspiracy.

Wire Harnesses and Related Products

Wire harnesses are the car’s electrical distribution systems, directing and controlling electronic components, wiring and circuit boards. The plea also covers related products, including wiring connectors and fuse boxes.

The wire-harness conspiracy ran from at least January 2000 until at least February 2010. Yazaki’s relevant sales affecting certain automakers in the United States and elsewhere totaled approximately $2 billion.

The plea describes meetings and conversations in the United States and elsewhere, followed by model allocations, rigged quotations and coordinated prices. Its Michigan subsidiary sold the affected products to automakers. The arrangement crossed borders, but the customer-facing sale passed through the American business.

Instrument Panel Clusters

Instrument panel clusters, also called meters, are the array of instruments and gauges in front of the driver. For this product, the plea describes a conspiracy running from at least December 2002 until at least February 2010, with approximately $73 million in relevant sales affecting certain automakers in the United States and elsewhere.

Here too, Yazaki admitted model-by-model supply allocations, rigged bids and coordination of requested price adjustments. The products sat in a different part of the car, but the commercial arrangement followed the same pattern. Competitors coordinated the model supply and the quotation, with sales through Yazaki’s United States subsidiary.

Fuel Senders

Fuel senders sit inside the fuel tank and measure the amount of fuel. The plea puts this conspiracy from at least March 2004 until at least February 2010. It identifies approximately $1.6 million in Yazaki sales affecting an automobile manufacturer in the United States.

The admitted meetings took place in Japan with a competing fuel-sender manufacturer. They produced agreements to fix, stabilize and maintain prices, including the adjustments the automaker requested. Yazaki’s United States subsidiary sold the affected parts to that customer.

The fuel-sender agreement makes the cross-border connection particularly clear: competitor discussions in Japan, sales through Michigan and prices charged to an automaker. Someone working on the American account could be dealing with the commercial result of a discussion held elsewhere.

How Is Bid Rigging Detected?

In a case with Yazaki’s admitted mechanism, we would examine the connection between a model allocation, the quote sent to the automaker and the instructions behind a price adjustment.

For an auto-parts insider, that knowledge can be very specific. You may understand which model an allocation schedule refers to, why a quote changed or what an automaker was seeking when it requested an adjustment.

We look at quotation versions alongside customer requests and competitor communications. If you saw a rival’s agreement drive the response to a customer, your account can explain why the final quote looked the way it did. The question is how the competing suppliers’ decision became the price or supply arrangement offered to the automaker.

The People Between the Competitor Meeting and the Customer

Yazaki’s plea places officers, employees and high-level personnel inside each conspiracy. The competitor discussion, pricing decision and customer sale could cross national borders.

DENSO provides a closely related example of the customer-facing role. In its May 21, 2013 account of separate criminal charges, the Department of Justice identified a senior manager and a group leader in DENSO’s Toyota Sales Division. The charges alleged that they participated in meetings and conversations, or directed subordinate employees to participate, to coordinate and fix component prices.

Those charges concerned electronic control units and heater-control panels. The common thread is the sales function: people dealing with a named customer’s business also allegedly helped carry out the competitor agreement. For someone inside a supplier, an instruction received at the account level may be the point where the larger arrangement becomes visible.

Private Auto-Parts Settlements Compensate Buyers

The separate automotive-parts purchaser litigation sought compensation for buyers over alleged component price fixing. Those settlements concern the buyers’ losses.

A person inside a supplier may instead hold the explanation for how the agreement worked: the model assignment, the competitor discussion or the reason a quotation changed. We assess that knowledge as the starting point for a whistleblower case. A purchaser’s claim and an insider’s information serve different purposes, even when they concern the same prices.

What Could Your Information Mean for a Whistleblower Case?

The Department of Justice’s antitrust whistleblower rewards program can pay insiders for information about collusion, and our experts work through whether and how it applies to what you know.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Where collusion also produces false claims involving government money, we work through the fit with you, starting with the agreement and the transactions you know.

You Know How the Quote Was Decided

Tell our whistleblower experts which Yazaki model allocation or price-reduction instruction changed the offer made to an automaker.