NGK Insulators Ltd. to Pay $65.3 Million for Fixing Prices on Auto Parts
WASHINGTON—Automotive parts supplier NGK Insulators Ltd. has agreed to plead guilty and to pay a $65.3 million criminal fine for its role in a conspiracy to fix prices and rig bids for ceramic substrates for automotive catalytic converters supplied to automobile manufacturers. The company will also plead guilty to obstruction of justice.
According to the two-count felony charge filed today in the Eastern District of Michigan, NGK Insulators, based in Nagoya, Japan, conspired to rig bids for, and to fix, stabilize and maintain the prices of, catalytic converter substrates. The parts were supplied to automobile manufacturers such as General Motors Company, Toyota Motor Corporation, Nissan Motor Company Ltd. and certain of their subsidiaries, affiliates and suppliers in the United States and elsewhere. NGK Insulators was involved in the conspiracy from at least July 2000 until at least February 2010. NGK Insulators is also charged with obstructing justice between February 2010 and approximately July 2012, for altering, destroying, mutilating and concealing documents with the intent of impeding the investigation into criminal antitrust violations in the automotive parts industry. NGK Insulators has agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“Companies and their executives who commit antitrust crimes will be found out and punished,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “And if they attempt to obstruct our investigation, they will face even harsher consequences.”
Ceramic substrates are uncoated ceramic monoliths with a fine honeycomb structure that are used in automotive catalytic converters. Catalytic converters are critical emissions control devices that convert pollutants in an exhaust gas stream into less harmful gases through catalytic chemical reactions.
According to the charge, NGK Insulators and representatives of another corporate conspirator had conversations in which they agreed upon anticompetitive bids and price quotations on bids to be submitted to certain automobile manufacturers. NGK Insulators, which sells a variety of ceramic and metallic products for the automotive industry, power generation, electronics components and other industrial processes, is the second-largest worldwide manufacturer of ceramic substrates for automotive catalytic converters.
Additionally, after becoming aware of antitrust investigations in the United States and other countries, NGK Insulators and certain of its executives and employees obstructed justice through a series of actions in both the United States and Japan. NGK Insulators deleted and attempted to delete electronic files, destroyed and concealed paper files, removed and replaced high executives’ office computers, removed and concealed electronic files stored on its U.S. office computer system, attempted to destroy paper files located in the U.S., engaged in misleading actions and withheld information about the offenses under investigation.
The charges against NGK Insulators are the latest in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry. Including NGK Insulators, 36 companies and 30 executives have pleaded guilty or agreed to plead guilty in the ongoing investigation and have agreed to pay more than $2.5 billion in criminal fines.
NGK Insulators is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. NGK Insulators is also charged with obstruction of justice, which carries a maximum penalty of $500,000 per count for corporations.
Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.