OT: parts suppliers going to prison

Feb 02, 2012 3 Replies
E

The Justice Dept. has finally caught up with some auto-parts price-fixing crooks:



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Having covered the automobile supply chain for a number of years, from the '80s through 2003 or so, I've long suspected that there *had* to be collusion and price-fixing going on. The way the automobile OEMs were squeezing their supply chains made it impossible for the big guys to make a profit. Yet, they were doing quite well, while smaller suppliers were going belly-up.



Now we know why.


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E

Well, be careful about making too many generalizations. The auto makers have been squeezing suppliers until they scream for a few decades now. The wonder is that they haven't *all* gone bankrupt.

If it tells us anything in general, I think it is that too much price coercion is going to force suppliers to find ways around it in order to survive. Without knowing the details about the current situation, my feeling is that they just pushed too hard. I doubt if it was driven by greed. More likely it was survival.

However, fraud is fraud.

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C

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the justice dept must have been hurting for money. There's no way it took

10 years to discover all this. They're just as crooked.
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J

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Remember "The Informant"?

"Competitors are our friends. Customers are our enemy".

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