WASHINGTON—A probe by the U.S. Department of Justice of possible anti-competitive practices in the tire industry is continuing, a department spokeswoman said. However, she could not reveal specific details of the price-fixing investigation, which was revealed in August 1995 when tire companies acknowledged they had been subpoenaed by the Justice Department.
A Goodyear spokeswoman said the tire maker ``has produced documents in response to the grand jury subpoena, and we are continuing to cooperate fully with the Justice Department in the investigation.''
Michelin North America Inc. also continues to cooperate with the Justice Department but will not make further comment on the investigation, a Michelin spokesman said.
Bernd Frangenberg, president of Continental General Tire Inc., also told TIRE BUSINESS that the tire maker has been cooperating in response to the grand jury's subpoena.
Although tire price hikes were the norm in 1995, tire industry analysts said that in 1996 tire companies were aggressive in discounting prices to meet competitors as raw material costs softened and inventories became bloated.
``It's such a competitive industry,'' said analyst Harry Millis, of Willoughby, Ohio-based Fundamental Research Inc. ``There's no way (there is price fixing).''
The Justice Department investigated the tire industry twice before—most recently during the 1970s—and both cases were thrown out of court, Mr. Millis said.
``It's a burdensome exercise for the companies that receive those subpoenas,'' said Thomas G. Slater Jr., a partner in the law firm Hunton & Williams in Richmond, Va.
Mr. Slater, who has defended companies in similar cases for about 20 years, said a price-fixing investigation does not limit a firm's activities, and only a small percentage of investigations go on to the next step.
But it's still very expensive for the companies and most times unnecessary, he said.
However, Mr. Millis said the costs of the investigation will be hard to break out from the overall costs of government regulations. ``I doubt it is a major burden on companies of that size,'' he said.