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Justice Probing Possible Price Fixing by Domestic Tiremakers

August 23, 1995

CLEVELAND (AP) _ The U.S. Justice Department confirmed Wednesday it is looking into allegations of price fixing by domestic tire manufacturers.

The Goodyear Tire & Rubber Co. disclosed the probe in a quarterly filing with the Securities and Exchange Commission. The Akron-based tiremaker said it was cooperating with a Justice Department subpoena, issued in April by antitrust investigators in the Cleveland office.

Lawyers in the Cleveland office referred questions to spokeswoman Gina Talamona in Washington. She confirmed that an investigation was under way but would not disclose any details.

``It’s an ongoing look at the industry,″ she said. ``I can’t get into it.″

It was not immediately clear whether the investigation centered on contracts for original-equipment tires, which are negotiated directly with automobile manufacturers, or on prices for replacement tires.

Goodyear spokesman John Perduyn said Wednesday that the company felt it was necessary to mention the subpoena in its quarterly report, known as a 10-Q.

``Even though most of this was driven today by the that fact we filed our 10-Q for the second quarter ... it’s an industry wide investigation of all companies that manufacture passenger tires or truck tires in the U.S.,″ Perduyn said. ``They all received the same subpoena.″

Other companies that manufacture tires domestically include Michelin, Bridgestone/Firestone, Cooper, Pirelli and Continental General.

Bridgestone/Firestone spokesman Trevor Hoskins said the company was aware of the investigation but did not believe it would create any problems.

``We feel sure that when the investigation is successfully concluded, it will be found that we comply with the antitrust regulations,″ Hoskins said in a statement.

Alec Reinhardt, Cooper’s executive vice president and chief financial officer, said the Justice Department requested financial information from the Findlay, Ohio-based company.

``We have gathered up the information and sent it to the Justice Department in Cleveland. We don’t know what they are investigating. But we want to cooperate with the Justice Department,″ he said.

Pirelli spokesman Robert Newman in New Haven, Conn., declined to comment.

Michelin spokesman Bill Patterson said the company, which is based in Greenville, S.C., had received the subpoena and was ``fully cooperating with the government.″ He declined further comment.

The tire industry has been steadily squeezed by increasing raw material costs, especially rubber prices, and when one tiremaker announced a price increase, others have usually been quick to follow suit. Goodyear said in announcing a price increase last January that prices for some grades of rubber had more than doubled since early 1994.

Analyst Harry Millis of Fundamental Research Inc. said he doubted there had been any collusion on pricing, noting a recent slump in tiremaker earnings.

``I think the Justice Department is wasting taxpayer money,″ he said. ``If the tire industry, in fact, is using any type of joint pricing, they’re doing a lousy job of it.″

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