US DOJ Confirms Antitrust Probe Of Compressor Industry
February 19 2009 - 11:31AM
Dow Jones News
Two days after authorities in Brazil raided Whirlpool Corp.'s
(WHR) offices there, the U.S. Department of Justice confirmed
Thursday that it is investigating possible antitrust violations in
the multibillion-dollar refrigeration compressor industry, in
conjunction with international authorities.
"The Antitrust Division is investigating the possibility of
anticompetitive practices in the compressor industry," said Justice
Department spokeswoman Gina Talamona. "We are coordinating with
other foreign competition authorities."
Whirlpool said Thursday that it received a grand jury subpoena
Tuesday from the U.S. Justice Department seeking company documents.
The company confirmed that Brazilian and Italian authorities
visited Whirlpool offices in those countries on the same day.
Whirlpool said it would cooperate fully with the investigations
and said that, to the company's knowledge, there have been no
charges filed against the company or any of its employees.
Tecumseh Products Co. (TECUA), a Whirlpool competitor, said
Wednesday that it, too, has received a grand jury subpoena from the
U.S. Justice Department. Tecumseh said it also has received
investigatory requests from Brazilian authorities and believes the
European Commission is conducting an investigation. The company
said authorities appear to be focusing on pricing issues.
Brazilian authorities swept through Whirlpool's Sao Paulo and
Santa Catarina state offices Tuesday in an operation called Zero
Grau, or Zero Degrees, with the objective to find evidence of a
global cartel in the selling of hermetic compressors for
refrigeration. The compressors are used in household refrigerators
and freezers, as well as commercial vending machines and water
coolers.
Sixty agents left with bags full of computers, laptops and other
archival material.
Raymond James cut its rating on Whirlpool Thursday based on news
of the investigation. "An investigation may aversely affect
Whirlpool's ability to achieve pricing in its core white goods
business in 2009, which is critical to its defraying input cost
inflation and un-absorption rates," the firm said.
-By Brent Kendall, Dow Jones Newswires; 202-862-9222;
brent.kendall@dowjones.com
(Kenneth Rapoza contributed to this report.)