More Scandals Rock Honda Parts Suppliers in Japan
The troubles keep coming for Japanese car companies. As the scandal over Takata’s faulty airbags rages on, two executives from an unrelated Japan-based auto part manufacturers agreed to turn themselves over to the U.S. court system for price rigging.
Takata airbags have been a hot topic since the reveal that the airbags can explode with too much force in high-humidity environments. The metal shrapnel from the faulty airbags has been linked to at least five deaths, and the company’s biggest customer, Honda, has been slow to recall affected vehicles. Takata continues to insist that the current recalls are sufficient.
On Wednesday, federal regulators finally managed to pressure Honda to expand its driver’s side airbag recall to all 50 states in the U.S., rather than only those with humid climates. The decision comes in the wake of National Highway Traffic Safety Administration reports detailing incidents outside high-humidity zones.
Though the decision is significant, Takata itself is still refusing to declare the bags defective and issue its own recall.
Meanwhile, executives Kosei Tamura from T.Rad Co., Ltd. and Kazumi Umahashi from Mitsuba Corp. are planning to plead guilty in a U.S. court for conspiring to fix auto part prices. Both executives are facing terms in U.S. prisons, according to the Justice Department.
The Justice Department investigation looked at price fixing of over 30 different car parts, including components for power steering, seat belts, air conditioning and power window motors.
“When companies like this enter into price fixing of car parts it generally increases those companies profits while charging the public a higher price than what the MSRP of the parts are,” says Jacob Hemsworth, Mac Auto Parts Sales. “Price fixing not only hurts the public when it comes to car parts, but also other suppliers of car parts. It is not surprising to hear the people involved in the price fixing of these parts are facing lengthy jail terms and large fines, though both may be a little less that what they should be getting.”
Umahashi has agreed to a 13-month prison term for fixing prices of parts sold to Honda, while Tamura will serve 366 days for conspiring to fix prices for radiators sold to Honda. Each man will pay a fine of $20,000.
It’s unclear what effect the ongoing scandals surrounding Honda’s suppliers will have on the Japanese car company. Even though several top executives have stepped down or taken pay cuts, it may take more than that to rebuild trust with the general public.
