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DoJ fines Japanese parts firms $740M in massive automotive price-fixing scandal

Nine Japanese suppliers have pleaded guilty in US court over charges of price fixing in the automotive parts industry, resulting in the Department of Justice doling out a total of $740 million of fines, according to a report from Bloomberg. The scandal, which has resulted in General Motors, Ford, Toyota and Chrysler spending up to $5 billion on inflated parts and driving up prices on 25 million vehicles has sent the DoJ hustling into investigations. "The conduct this investigation uncovered involved more than a dozen separate conspiracies aimed at the U.S. economy," Attorney General Eric Holder (pictured above) said during yesterday's press conference.
As the investigation stands, the DoJ has issued $1.6 billion in fines against 20 companies and 21 individual executives, with 17 of the execs headed to prison. Deputy Assistant Attorney General Scott Hammond said, "The breadth of the conspiracies brought to light today are as egregious as they are pervasive. They involve more than a dozen separate conspiracies operating independently but all sharing in common that they targeted US automotive manufacturers."
Big-name suppliers indicted in the investigation include Mitsubishi Electric, Mitsubishi Heavy Industries, Hitachi Automotive and Mitsuba Corporation. A list of fines and other corporations named in the investigation is available at Bloomberg.

Chrysler recalling nearly half a million vehicles with active head restraints

Chrysler has announced that it will recall roughly 490,000 vehicles around the globe due to a potential active head-restraint problem. The problem is being blamed on "potentially faulty microcontrollers" that may keep the vehicles' anti-whiplash active safety feature from working properly. Chrysler says it has no knowledge of any accidents or injuries related to the issue. Models covered under the recall include the 2011-2013 Chrysler Sebring, 200 (shown) and Dodge Avenger models, along with 2011-2013 Jeep Liberty and 2011-2012 Dodge Nitro SUVs.
Interestingly, the Pentastar notes that the faulty part came from an (unnamed) supplier who furnished the parts in the wake of Japan's 2011 earthquake and tsunami, natural disasters which decimated the world's supply of microcontrollers.
Chrysler says of those nearly half a million vehicles affected, around 442,000 of them reside in the US, with an additional 25,000 in Canada and 10,000 units in Mexico. A further 12,000 models were shipped beyond the NAFTA region. The Auburn Hills automaker will begin sending out recall notices shortly, and technicians will upgrade the system software or replace the microcontroller as necessary at no cost to owners.

Auto investor Kirk Kerkorian dead at 98

Kirk Kerkorian, among the most talked-about investors in the American auto industry in recent memory, died at the age of 98 in Los Angeles on Monday, June 15. The billionaire ran the investment company Tracinda Corp. and was the largest shareholder in MGM Resorts International. Kerkorian attempted to use his power as a well-financed investor to push the auto industry in some fascinating ways. In 2006, he used his nearly 10-percent stake in General Motors to push a merger with the Renault-Nissan Alliance. The deal made it as far as discussions, but eventually fell through. Kerkorian also attempted to purchase Chrysler - twice. According to Automotive News, the first effort came in 1995 with a $22.8-billion offer for the automaker, and soon after it failed the company merged with Daimler. Then in 2007, Kerkorian was back with a bid for $4.5 billion, but things eventually fell to Cerberus. The billionaire finished the trifecta by buying up $1 billion in Ford stock in 2008 to make Kerkorian the single largest investor in the company. However, the situation didn't last long, and by the end of that year, he had unloaded the shares. According to Automotive News, Kerkorian was ranked by Forbes as the world's 41st richest man in 2008 with a net worth of $16 billion. News Source: Automotive News - sub. req.Image Credit: Joe Cavaretta / AP Photo Celebrities Earnings/Financials Chrysler Ford GM obituary