WASHINGTON (Mar. 10, 2000)—The U.S. Justice Department´s five-year investigation of alleged price fixing in the tire industry is over.
The agency notified major U.S. tire manufacturers Feb. 18 that it was terminating the probe and would not file a complaint, according to several industry sources. A Justice Department official in Cleveland declined comment, and another in Washington would only confirm that the investigation had ended.
In August 1995, tire makers including Goodyear, Bridge-stone/Firestone Inc., Continental General Tire Inc., Cooper Tire & Rubber Co., Dunlop Tire Corp. and Michelin North America Inc. confirmed they had been subpoenaed in the investigation and were cooperating with the department´s Antitrust Division in the case.
During the long course of the investigation, there was never any news of its progress. The Justice Department´s official policy is never to comment on any ongoing case.
The seemingly unanimous price movement of tires presumably drew the agency´s attention, industry observers said at the time the probe was announced. Because of the cutthroat market competition among tire companies, none of them raises prices until raw material costs or other external factors force them all to do so.
"You never can dismiss a federal investigation as being inconsequential, but those of us who follow the industry never believed that they had a case," said Saul Ludwig, a tire industry analyst with McDonald & Co. in Cleveland. Asked how the end of the investigation would affect tire makers, Mr. Ludwig answered, "Less legal expenses."
Reacting to the news of the probe´s termination, tire company spokespersons were unanimously close-mouthed.
"We understand the case is closed, and we have no further comment," a Goodyear spokeswoman said. A Cooper spokeswoman said her company was "very pleased" by the termination. "We´ll want to get back to the business at hand, and this is good news for us," she said.
"We were prepared to defend ourselves," said Daryl Hollnagel, secretary of Conti General. However, the investigation was dormant for some time before the Justice Department dropped it. "I have no idea why," Mr. Hollnagel said.
The Justice Department case was the latest of several unsuccessful federal government attempts to pin price-fixing charges on tire makers. The biggest previous effort came from the Federal Trade Commission in the mid-1970s.