FTC Warns Suzuki Unit over Subcontracting Law Violation

Tokyo, Dec. 8 (Jiji Press)–Japan’s Fair Trade Commission issued a warning Monday to Snic Co., a subsidiary of Suzuki Motor Corp., for unreasonably keeping unchanged unit prices for subcontractors producing auto parts despite significant decreases in order volumes in violation of the subcontracting law. The FTC told Snic, based in the city of Iwata, Shizuoka Prefecture, central Japan, to take steps to prevent a similar malpractice. The case affected 318 parts. This was the first FTC warning issued over the practice of unfairly keeping contracted unit prices unchanged. Since March last year or before, Snic has unilaterally placed orders with 10 subcontractors making parts such as car seats while maintaining the unit prices despite significant declines in orders following the end of mass production of related vehicles. The FTC believes that the subcontractors suffered losses from the practice. Additionally, Snic forced 14 subcontractors to store 880 items, including molds, free of charge although the company did not place orders for a long period. The company paid about 8.4 million yen as part of the unpaid fees by October this year. In a statement released Monday, Snic promised to make efforts to further strengthen compliance and prevent any recurrence. END [Copyright The Jiji Press, Ltd.]