Note to CEOs: if you’re going to meet with your competitors at a clandestine hotel in order to fix prices, make sure nobody in your entourage is a snitch. And if you’ve already received a regulator’s multimillion-dollar fine a few years ago, be more careful the second time, otherwise you’re likely to be fined a cool billion bucks– as France’s Saint Gobain was yesterday. Neelie Kroes, European Commissioner for Competition: “Saint-Gobain, Asahi, Pilkington and Soliver have defrauded the auto industry and consumers for five years. The FT reports that the fines are so punitive because the auto glass industry is large (sales of $3bn/year) and because Saint-Gobain had been involved in a similar incident in the past.”
Strangely, car makers seem not so interested in getting any of their (overcharged) money back: One said, “In the current environment, we do not want to make life harder for our suppliers.” Huh? A strange thing for a car company to say, given how they (given a chance) squeeze suppliers till the pips squeak. But the (unnamed) car maker went on: “Not to forget, the quoted companies are the only ones left in the business.” Oh, that’s why.
In other supplier-related news, Automobilwoche [sub] reports that the global crisis is claiming its first major German casualty. Getrag, a privately-owned company, hasn’t recovered since Chrysler recently cancelled an per-year order of 700,000 DSG (dual-
clutch) transmissions, and is practically bankrupt. Expect to see worried faces at Getrag’s customers, which include BMW, Mercedes, Smart and Porsche.
Hurray! It’s nice to see that at least one guvernment has the balls to take on the tripart (3 “individual” companies) monopolies and punish them for rape. If they were in the US, Pelosi would be trying to give them 40 or 50 billion to “help them out”.
If my recollection serves me right (and I’ve been following the edicts of the European Court since they slapped VW for standing in the way of grey imports) this must have been the largest fine in the court’s history.
Hurray! It’s nice to see that at least one guvernment has the balls to take on the tripart (3 “individual” companies) monopolies and punish them for rape.
Oh puh-lease, one thing you can’t accuse those losers of being is a “monopoly” — or maybe you haven’t noticed they’re all so unprofitable and uncompetitive they’re about to go belly up. We’ve hardly been needing government action to loosen Chrysler’s stranglehold on the automotive market.
And by the way, GM/Ford/Chrysler wouldn’t be a monopoly in any case, it would be an oligopoly and a cartel. This news item is about illegal cartel activity. (As opposed to the legal state-sanctioned socialist cartel we see with OPEC).
This news item is about illegal cartel activity. (As opposed to the legal state-sanctioned socialist cartel we see with OPEC).
Yes, I used the term loosely… but in practical terms, whether industries controlled by a few companies are a monopoly or cartel makes no difference. Either way, the customer is getting screwed.
see “Rats in the Grain” by Liebler.