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Toyota Supplier Group Targeted for Potential Collusion

by APICS Staff | N/A 2012 | 12 | 18

Kyohokai, an association of top suppliers to Toyota, faces scrutiny from regulatory authorities because of potentially collusive behavior, the Wall Street Journal reports. Kyohokai is a 69-year old organization that consists of 222 members representing Toyota’s biggest upstream partners, which disseminates information about Toyota business plans. Earlier this year, group members supported a motion to disband; however, they later agreed to remain intact, opting to increase the transparency of their processes.

Hisataka Nobumoto, chairman of Kyohokai and CEO of Akebono Brake Industry, says the association is not a barrier to competition, though it can seem that way from the outside. The group will reveal more of its inner workings to avoid any appearance of impropriety with regard to its relationship with Toyota and to strengthen corporate compliance. Kyohokai’s hand was forced when US and Japanese authorities began probing into its actions.

In January and April, the US Justice Department charged nine executives at five Japanese auto parts manufacturers with price fixing and bid rigging. Three of the firms, all of which belong to Kyohokai, pled guilty and faced fines totaling $748 million. In an unrelated situation, four Kyohokai member corporations were raided by the Japanese Fair Trade Commission under suspicion of violating antimonopoly laws.

Kyohokai receives no funding from Toyota. A representative from the automaker says the company prioritizes fair and open business relations and requests its suppliers comply with laws and regulations.

India Grants Access to Walmart and Other Large Retailers

India’s government has decided to allow large department stores, including Walmart, to do business inside the country, albeit with some restrictions, the New York Times reports. “Farmers stand to benefit from the significant reduction in post-harvest losses, expected to result from the strengthening of the back-end infrastructure,” reads a government statement. Currently, as much as 40 percent of the food grown by Indian farmers rots before reaching consumers, and spoilage of essential foods stockpiles also is a problem.

The regulations allowing large retailers such as Walmart to operate in India include the following conditions:

  • Retailers cannot operate in states that do not agree to the policy.
  • Retailers only may operate in large urban areas with more than one million people (India has more than 50).
  • Retailers must provide “transport connectivity and parking.”
  • Retailers must invest at least $100 million into the country, with at least half of direct investment made to “back-end infrastructure.”
  • Retailers must source at least 30 percent of products from Indian small and midsize businesses, or alternatively install local facilities.
Report: Optimism Rising at Small Businesses 

Confidence among small-business owners is at its highest level in nine months, Bloomberg News reports. As more companies anticipate rises in hiring and sales, the National Federation of Independent Business (NFIB) announces its optimism index increased to 92.9, overcoming four straight months of decline.

Other good news for manufacturers includes sentiment about the labor market rising to its highest level since 2008, as a net 10 percent of employers report they plan to add workers. This is a strong marker for business activity, despite factors such as a slowdown in the global economy and negative influences from the uncertainty of the upcoming US presidential election’s effects on tax and regulatory policy.

“The labor market readings were very solid,” says William Dunkelberg, chief economist at NFIB. “Expectations for business conditions in early 2013 improved substantially, perhaps a forecast of the election outcome and the chance for a favorable resolution of our fiscal dilemma.”

According to the US Small Business Administration, small companies represent more than 99 percent of US employers. The NFIB surveys 736 small-business owners to generate its monthly report. The data also show an increase to 18 percent of small-business owners who find it hard to fill job openings, compared to 15 percent the previous month. 

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