Anti-Trust Lawyers Weigh Toyota Chief Comments on Price Increases

Washington DC June 10, 2005; The AIADA newsletter reported that "Inviting competitors to match your price increases can be illegal "price signaling," says lawyer Jim Weiss, former head of an antitrust unit at the Justice Department and now in private practice at a law firm specializing in antitrust,” reports USA Today. “

If rivals don’t follow, no violation. "But it invites the government to look into what you’re doing. When the government looks into what you’re doing, they frequently find something, even if it’s not what they intended," he says.” Speaking as chairman of the Japan Business Federation during a conference in Osaka, Japan, Toyota Chairman Hiroshi Okuda for the second time in two months suggested the automaker would likely raise prices in the U.S. in order to aid struggling Detroit automakers, GM and Ford. Okuda’s remarks, which came just one day after GM’s CEO, Rick Wagoner, met with shareholders to discuss plans to close plants and cut 25,000 jobs, were picked up by reporters at Japan’s Kyodo News and published in newspapers throughout the U.S.

When making his comments, Okuda stressed his fear that a beleaguered U.S. auto industry could have negative effects on the way Japanese automakers are perceived in the country. He suggested that higher prices would help struggling automakers improve earnings.

From USA Today: “Mike Michels, spokesman for Toyota Motor Sales, the automaker’s main U.S. unit, says prices might rise because of higher costs or additional features, but "There’re not going to be any arbitrary price increases. That’s not how we do pricing. I don’t think Chairman Okuda meant it that way."”

For now, however, “antitrust lawyers say the Justice Department is likely to take note of the comments and watch for unusual moves in Detroit automakers’ pricing. Okuda’s comments might have the opposite result. Antitrust lawyers say it’s possible that Detroit car companies might temporarily skip planned price increases on models that compete directly with Toyota models to prove they are not colluding with Toyota in a price-fixing scheme.”