Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Panasonic, Whirlpool fined for price fixing

By Aaron Smith, staff writer


NEW YORK (CNNMoney.com) -- The Justice Department said Thursday that Panasonic and Embraco, a Whirlpool subsidiary, are being fined more than $140 million for price fixing refrigerator parts.

Both companies plead guilty to charges of manipulating the prices of refrigerator compressors in the U.S. and elsewhere from 2004 to 2007, according to the Justice Department. Compressors are used to cool refrigerators by controlling gas pressure.

Embraco North America Inc., a Brazil-founded manufacturer of refrigerator compressors, will pay $91.8 million; and the Japanese company Panasonic (PC) will pay $49.1 million. Panasonic is known primarily for its electronic products, but it also manufactures compressors with a worldwide market share of about 13%, the company said.

Whirlpool lowered its financial outlook as a result of the fine. The company said its $91.8 million expense amounts to $1.20 per diluted share for the third quarter. As a result, the company now expects to report earnings of $7.80 to $8.30 per diluted share, down from the prior outlook of $9 to $9.50 per share.

Whirlpool's (WHR, Fortune 500) stock was practically unchanged by the news.

Christine Varney, assistant attorney general in charge of the Justice Department's antitrust division, said these are the "first charges" in an "ongoing investigation in the worldwide refrigerant compressors market."

Panasonic spokesman Jim Reilly said his company had entered into the plea agreement, "to resolve claims that its household refrigerator compressor business unit engaged in certain anti-competitive activity, regarding price fixing with other compressor manufacturers."

Reilly would not identity the other manufacturers. He added that the fine will not impact the financial outlook for the current fiscal year.

The Justice Department filed the charges through U.S. District Court in Detroit. To top of page

Index Last Change % Change
Dow 18,432.24 -24.11 -0.13%
Nasdaq 5,162.13 7.15 0.14%
S&P 500 2,173.60 3.54 0.16%
Treasuries 1.46 -0.05 -3.51%
Data as of 4:20pm ET
Company Price Change % Change
KeyCorp 11.70 0.05 0.43%
Bank of America Corp... 14.49 -0.19 -1.29%
Ford Motor Co 12.66 -0.05 -0.39%
Chesapeake Energy Co... 5.42 0.23 4.43%
General Electric Co 31.14 -0.11 -0.35%
Data as of 4:03pm ET
Sponsors

Sections

For the first time ever, Amazon and Facebook are more valuable than Berkshire Hathaway, the storied company run by legendary investor Warren Buffett. More

Venezuela's government issues a decree recently that makes it possible to force workers to work in the country's fields amid food shortages. More

Sheryl Sandberg says she supports Hillary Clinton for president, because she would help close the gender gap, and because she's 'the most qualified candidate.' More

It's about to get harder for some luxury all-cash home buyers to hide their identity from the U.S. government. More