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Bosch fined $57.8 million by DOJ for price fixing and bid rigging

The US Department of Justice has been investigating bid rigging and price fixing among automotive parts suppliers for years, and so far the agency has leveled nearly $2.5 billion in fines against 34 companies. The latest business to be caught in this ongoing crackdown is Germany's Robert Bosch GmbH (Bosch), the world's largest independent auto component maker, and it agrees to pay a $57.8 million criminal fine to the Feds. According to the DOJ, Bosch has agreed to plead guilty to pricing fixing and bid rigging for spark plugs and oxygen sensors supplied to the former DaimlerChrysler, Ford and General Motors. The rigging is said to have occurred between January 2000 and July 2011. Bosch also allegedly played foul with starter motors sold to Volkswagen from January 2009 until at least June 2010. Bosch and other companies allegedly conspired on the pricing for bids to submit to automakers, and sold the parts at noncompetitive prices. The DOJ filed a one-count felony charge in US District Court for these actions. The company's plea is still subject to court approval, though. Bosch is only the third European company to be charged in this investigation, according to the DOJ. So far, many of the fined businesses have been from Japan, including Takata, NGK and others. Some execs have claimed price-fixing has been the standard operating procedure in the auto parts industry for a long time. Robert Bosch GmbH Agrees to Plead Guilty to Price Fixing and Bid Rigging on Automobile Parts Installed in U.S. Cars Robert Bosch GmbH, the world's largest independent parts supplier to the automotive industry, based in Gerlingen, Germany, has agreed to plead guilty and to pay a $57.8 million criminal fine for its role in a conspiracy to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automobile and internal combustion engine manufacturers in the United States and elsewhere, the Department of Justice announced today. According to the one-count felony charge filed today in the U.S. District Court of the Eastern District of Michigan, Bosch conspired to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of, spark plugs and oxygen sensors sold to automobile and internal combustion engine manufacturers such as DaimlerChrysler AG, Ford Motor Company, General Motors Company and Andreas Stihl AG & Co., among others, in the United States and elsewhere.

10 years later, a look back at U.S. auto industry’s near-death experience

The U.S. auto industry this month marks a grim and harrowing milestone: A decade ago, the entire industry was staring into the abyss of total collapse. By 2009, of course, the broader economy was teetering on the brink, with mortgage default rates and foreclosures spiraling and the real estate market in the tank. Both Lehman Brothers and Bear Stearns had collapsed, President George W. Bush had signed the Troubled Asset Relief Program, or TARP, infusing $700 billion of taxpayer money to stabilize Wall Street, and Insurer AIG, stung by huge losses on subprime mortgages, won a federal bailout. Virtually the entire decade had been particularly unkind to the Detroit Three automakers, which were over-reliant on gas-guzzling trucks and SUVs as gasoline prices crept toward the $4 mark, and whose labor costs — especially for health care and retiree pension obligations — were dragging them billions into the red. It was a dreadful, frightening time in Detroit, especially, with reports of plant closures and mass layoffs appearing with alarming regularity. Seeing the federal government's largess with Wall Street, General Motors and Chrysler both went calling for government assistance for themselves. (Ford managed to avoid following suit only by mortgaging all of its assets, including its very brand, years earlier in exchange for billions of dollars in loans.) Yet instead of giving them the "bridge loans" they sought, the incoming Obama administration instead pushed back against GM and Chrysler, eventually guiding them into bankruptcy protection, as the Detroit Free Press recalls in a multimedia story recounting the industry's tumultuous and perilous recent past. The piece uses images of the newspaper's front pages from those days, splashed with what former newsroom colleagues and I would often refer to as "Pearl Harbor font" headlines ("NO DEAL" read the Freep's Dec. 12, 2008, edition). There are also timelines, interactive graphics and snippets of video interviews with two insiders: freshman U.S. Rep. Haley Stevens of Michigan, who served as chief of staff for President Obama's auto task force; and U.S. Rep. Debbie Dingell, the wife of the late longtime U.S. Rep. and industry ally John Dingell, who was then an executive at GM.

Share price falls on skepticism of Chrysler-Fiat five-year plan

Following this week's Fiat Chrysler extravaganza, where the Italian-American manufacturer announced its plans for the next five years, the Autoblog staff was cautiously optimistic of the company's future. Investors? Not so much.
Fiat saw its shares tumble 12 percent in Wednesday's trading, falling from 8.67 euros ($12.06 at today's rates) to 7.44 euros ($10.35) as of this writing, with blame partly going to the Italian half of the FCA marriage, which recorded a pretty significant drop in profits during the first quarter of this year.
The plan, which will cost around $77 billion over the next several years, is facing criticism from investors thanks in part to a 1.4-percent drop in Fiat's first-quarter profits, to 622 million euros ($862 million). That figure is also short of Bloomberg analysts' projections, which predicted $1.18 billion in profits before taxes, interest and one-time items.