Auto blog

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.

NHTSA investigating power modules on Chrysler Group SUVs and minivans

The Center for Auto Safety is officially petitioning the National Highway Traffic Safety Administration to begin scrutinizing alleged problems with the totally integrated power module (TIPM) on about 24 Chrysler Group SUVs and minivans. The advocacy group claims that the part's failure can cause affected vehicles to stall or not start at all. NHTSA is still looking into the accusations and deciding whether a full investigation is actually warranted.
The CAS petition claims at least 70 TIPM failures, but according to NHTSA, six of the complaints are for models that don't have the modules. In 34 of the reported cases, the vehicles refused to start, and in 17 of them the engine stalled. There were also two allegations of smoke and one of a fire. However, none of these affected airbag deployment or resulted in a crash.
This petition isn't the first TIPM-related problem for Chrysler Group. A recent report in the New York Times alleged that it found 240 complaints potentially related to the issue on NHTSA's website alone. In September, the automaker also recalled 230,760 examples worldwide (188,723 in the US) of the 2011 Jeep Grand Cherokee and Dodge Durango replace the fuel pump relay circuit inside of the TIPM-7 with one external to the unit. The original part could allegedly cause the models to stall without warning. Even earlier, the company also recalled about 80,000 examples of the Jeep Wrangler and Dodge Nitro in 2007 to have the module reprogrammed.

Chrysler purchases remaining shares from VEBA Trust, announces funding plan

It's official: The Detroit Three is now The Detroit Two and The Fiat Subsidiary, Chrysler. Both the Italian carmaker and The Pentastar announced the completion of cash payments and a Memorandum of Understanding (MOU) on future payments necessary to make the Chrysler Group a wholly-owned subsidiary of Fiat. As previously detailed, Chrysler made a cash payment of $1.9 billion and Fiat North America made a cash payment of $1.75 billion to the Voluntary Employment Benefit Association (VEBA) run by the United Auto Workers union.
On top of that, Chrysler Group signed an MOU that agrees to payments of $700 million to the VEBA in four installments, the first of which was made concurrently with the other cash payments. And for you trivia mavens, the full name of the UAW is the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. So go impress your loved ones with that nugget after you check out the press release below.