Really big crime in Detroit draws yawns?

**Lowell** · October-08-11, 10:09 AM

This week's Crain's detailed a criminal conspiracy in Detroit [metro] that dwarfs the antics of the alleged Kilpatrick crime enterprise, Wayne County shenanigans, and certainly the small fry catalytic converter and GPS thieves.

Give up yet? Didn't see this in the breaking news? No Scott Lewis stakeouts? What? You haven't heard about theft in the [yawn] automotive wire-harness business? You're not alone. Me either.

Yet automotive supplier Furukawa Electric has agreed to pay, not a paltry $1 million restitution, but a $200 million dollar fine, that 3 of its local executives will serve 12-18 months and the company will cooperate in the ongoing investigation as part of its guilty plea for its role in a global price-fixing conspiracy for wire-harnesses in violation of the ye olde Sherman anti-trust act.

Now that this huge domino has toppled expect even more as raids and investigations have spread to Sumitomo, TRW, Yazaki, Lear, Denso and Tokyo Rika automotive suppliers.

Ho hum? No mega thread for this one?

I guest the lesson learned is to commit crimes that are boring and complex and don't do as the Rodney Dangerfield one-liner summarizes.

"My old man was so stupid he got fired from the bank for stealing pencils."

lilpup · October-08-11, 11:27 AM

That's because the investigations into these kinds of crimes are usually very hush, hush. I recall Yazaki and some other suppliers having their offices raided a while back but beyond that hadn't heard a peep about what was being sought or what was found.

**Gistok** · October-08-11, 01:03 PM

Thanks for the info... now I wonder who gets the $200 million? The Feds?

lilpup · October-08-11, 01:34 PM

It would be verrrrryyyy interesting to see which companies and vehicle models were targeted by these price fixers.

**Meddle** · October-08-11, 05:32 PM

Industrial 'crime' is just business as usual. Nike just got zinged for a similar amount over some of their shoes.

**Blueidone** · October-08-11, 06:18 PM

And what does it say when corporations get fined two hundred million and don't even bat an eyelash...and then move on to do it again?

**Jimaz** · October-08-11, 06:55 PM

Originally Posted by Blueidone

And what does it say when corporations get fined two hundred million and don't even bat an eyelash...and then move on to do it again?

That they have taken out an insurance policy against such eventualities?

**Blueidone** · October-08-11, 07:03 PM

Says that loud and clear!!

**BagAJellyDonuts** · October-08-11, 07:21 PM

Sure sucks that companies like this can just pay fines considering there were likely hundreds if not thousands of jobs lost someplace else.

**JBMcB** · October-08-11, 09:04 PM

Originally Posted by Lowell

Give up yet? Didn't see this in the breaking news? No Scott Lewis stakeouts? What? You haven't heard about theft in the [yawn] automotive wire-harness business? You're not alone. Me either.

Simple. How much has this price fixing scheme cost you? What effect did it have on your life? Usually these price fixing schemes only involve a couple percentage points of the total price of the item - and it's usually low-cost high-volume items so the fixing is difficult to notice. If the companies agree to a couple of bucks over the mean MSRP, that's tens of millions of dollars of more profit for them. The increase is lost in the noise of the other variable costs in the final product.

So, are you expecting a huge expose on how a group of tier 1 and tier 2 auto suppliers conspired in a complex fashion to bilk consumers out of a couple of bucks each? It's an illegal conspiracy, people are going to jail, but it ultimately doesn't affect the average guy on the street at all.

**DetroitPlanner** · October-08-11, 10:26 PM

A couple percent on a $30,000 vehicle is not chump change. Thats $600. Multiply that by the 12 Million vehicles sold in the average year in the US. Thats $7.2 billion a year out of consumers pockets.

**JBMcB** · October-08-11, 10:51 PM

Originally Posted by DetroitPlanner

A couple percent on a $30,000 vehicle is not chump change. Thats $600. Multiply that by the 12 Million vehicles sold in the average year in the US. Thats $7.2 billion a year out of consumers pockets.

It's not a couple percent on a vehicle - the companies that were busted were selling wiring harnesses to auto companies. It's a couple percent on the cost of wiring harnesses. When I worked for a car electronics company these ran us few bucks each.

**Lowell** · October-09-11, 01:02 PM

Originally Posted by JBMcB

Simple. How much has this price fixing scheme cost you? What effect did it have on your life? Usually these price fixing schemes only involve a couple percentage points of the total price of the item - and it's usually low-cost high-volume items so the fixing is difficult to notice. If the companies agree to a couple of bucks over the mean MSRP, that's tens of millions of dollars of more profit for them. The increase is lost in the noise of the other variable costs in the final product.

So, are you expecting a huge expose on how a group of tier 1 and tier 2 auto suppliers conspired in a complex fashion to bilk consumers out of a couple of bucks each? It's an illegal conspiracy, people are going to jail, but it ultimately doesn't affect the average guy on the street at all.

All of what you say is correct. My point is that theft or malfeasance as alleged with the Kilpatricks or Wayne county, which likewise only take pennies out of every pocket and similarly it doesn't affect the average guy on the street, gets far more ink -- even though the total amount of the theft is many times greater.

**Meddle** · October-09-11, 02:20 PM

^^^ But like I said, corruption at the corporate level is business as usual. It isn't news. If you're not a thief and a con, you don't get ahead.

The Kwame and Mommy caper was over stupidity and arrogance more than corruption in Detroit which is also almost expected of politicians. Detroit, Chicago, Newark - they're all the same. Corrupt to the core going back many decades.

lilpup · October-09-11, 05:56 PM

Originally Posted by Lowell

All of what you say is correct. My point is that theft or malfeasance as alleged with the Kilpatricks or Wayne county, which likewise only take pennies out of every pocket and similarly it doesn't affect the average guy on the street, gets far more ink -- even though the total amount of the theft is many times greater.

I disagree. The resultant impacts of the two are radically different. Firstly, civic corruption takes from ALL the taxpayers whereas the other only hits those who purchase the targeted products. Secondly, tax funds aren't the flexible revenue stream that sales revenue funds are. Corporations can easily pass along their higher costs or find cuts to offset them. Civic entities, especially around here, don't have that kind of luxury. Civic corruption is far, far more damaging - both in actual effect and the breadth of those affected..

**Detroitej72** · October-09-11, 07:46 PM

Originally Posted by Meddle

^^^ But like I said, corruption at the corporate level is business as usual. It isn't news. If you're not a thief and a con, you don't get ahead.

When you think about it, isn't it sad that we accept this as the norm for business in America?

**English** · October-09-11, 08:30 PM

Originally Posted by Detroitej72

When you think about it, isn't it sad that we accept this as the norm for business in America?

It is. The double standard is pretty disgusting. It's silly to think that we should accept corporate corruption as business as usual, and then expect our pols, our teens, and the underclass to be fine upstanding citizens. Our "greed is good" mentality has infected all sectors of our society and even if people think they're not directly affected, they are.

lilpup · October-10-11, 01:08 AM

It's very difficult to get action against corporate corruption unless it's absolutely huge. The insularity of corporate operations along with the dearth of enforcement agency resources combine to make the business world a winner-take-all wild west.

A few years ago the company I worked for decided they wanted to take advantage of opportunities presented by the economic downturn. The company wasn't well positioned so they wanted to massage and pad the company balance sheet, among other things. An attorney with whom I had a casual discussion said, by virtue of my position, I'd be as indictable as the corporate bosses if I stay ed and looked the other way but he also didn't think I had enough of a paper trail to get any enforcement agency to take action. The situation was exactly as the corporate honchos believed when they said they wouldn't get caught - too small for the Feds to worry about and the state was stretched too thin. Perhaps if I had been thinking I could have stayed and gathered more for an interested agency but I was afraid of getting burned and so bailed out of the environment [[at great financial expense to myself in this economic environment).