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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.

Toyota fears supplier pressure in Australia with GM pull out

With Ford and General Motors both announcing an end to production in Australia, the country's auto industry is in a bad way. With the exit of two big players, there's increased concern that a third Australian manufacturer, Toyota, will be forced out, as well.
"We are saddened to learn of GM Holden's decision. This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia," Toyota Australia said in a statement. The GM closure of Holden production will be the direct end to 2,900 jobs, but will also force a dramatic reduction in the size of the country's supplier network, as there will simply be fewer cars to build.
In the same statement, Toyota Australia said it would work with suppliers and local government to figure out whether continuing production Down Under was even feasible. According to Automotive News, a representative for the Australian Manufacturing Workers' Union told reporters it was "highly likely" that Toyota would also close up shop within the next few years.

Toyota investing $750M, adding 600 jobs at 5 U.S. plants

BUFFALO, W.Va. — Toyota on Thursday announced it is investing an additional $750 million at five U.S. plants that will bring nearly 600 new jobs, including the production of two hybrid vehicles for the first time at its Kentucky facility. It marks yet another expansion of the Japanese automaker's U.S. presence, bringing to nearly $13 billion the amount it will spend by 2021. The latest investments are at facilities in Alabama, Kentucky, Missouri, Tennessee and West Virginia. Those same facilities were part of a 2017 announcement by Toyota for a $374 million investment to support production of its first American-made hybrid powertrain. Toyota Motor North America CEO Jim Lentz said the latest investments "represent even more examples of our long-term commitment to build where we sell. By boosting our U.S. manufacturing footprint, we can better serve our customers and dealers and position our manufacturing plants for future success with more domestic capacity." Toyota's Georgetown, Kentucky, facility will get a $238 million infusion to produce hybrid versions of Lexus ES 300 sedans starting in May and the Rav4 SUV starting in January 2020, the company announced. It also includes $288 million to increase annual engine capacity at Toyota's Huntsville, Alabama, facility. The plant will add 450 jobs to accommodate new four-cylinder and V6 engine production lines. Last year Toyota and Mazda announced plans to build a $1.6 billion joint-venture plant in Huntsville that will eventually employ about 4,000 people. Toyota also is spending $62 million on equipment to boost production of Toyota and Lexus cylinder heads at its Bodine Aluminum facility in Troy, Missouri, as part of its cost-saving New Global Architecture production strategy to share common parts and components among different vehicles. A $50 million expansion and equipment upgrade at its Bodine plant in Jackson, Tennessee, will add 13 jobs and produce engine blocks while doubling the capacity of hybrid transaxle cases and housings. And Toyota will add 123 jobs and spent $111 million to expand its plant and purchase equipment in Buffalo, West Virginia, to double the capacity of hybrid transaxles. Previously, Toyota also announced a $600 million investment at its Princeton, Indiana, plant to increase the capacity of its Highlander SUV and to incorporate the new production strategy, and $170 million to launch the 2020 Corolla on a new production line in Blue Springs, Mississippi.