Tire Makers Are the Focus of Antitrust Investigation : Probe: Justice Dept. looks into possible price fixing or restraint of trade as the industry is hit with higher raw material costs.

A federal grand jury in Cleveland is investigating possible price fixing or other restraint of trade in the domestic tire industry, government and industry officials confirmed on Wednesday.

News of the probe by the U.S. Justice Department’s antitrust division surfaced in a quarterly report filed with the Securities and Exchange Commission by Goodyear Tire & Rubber Co.

Goodyear said it received a subpoena for documents in April in connection with an industrywide investigation. Bridgestone/Firestone Inc., Michelin, Dunlop Tire Corp. and Cooper Tire & Rubber Co. also acknowledged receiving subpoenas.

Gina Talamona, spokeswoman for the Justice Department in Washington, confirmed that an investigation was under way but would provide no further details. “The antitrust division is looking at the possibility of anti-competitive practices in the tire industry,” she said.

The antitrust investigation is the latest by the Justice Department involving a major U.S. industry and appears to signal a more vigilant approach on pricing issues under the Clinton Administration.

The government is currently looking into possible price fixing by Archer-Daniels-Midland Co. and other food-additive firms. It also has been probing possible collusive pricing activities by the nation’s auto dealers.

The tire investigation comes as the industry has been struggling to increase prices to cover sharply higher material costs, particularly that of natural rubber. Tire prices have risen about 7% since late last year in several stages, but competition has forced a rollback of some announced increases.

“If they are engaging in any kind of price fixing, they are sure doing a very bad job of it,” said Harry Millis, a tire industry analyst for Fundamental Research Inc. in Willoughby, Ohio.

This is the third probe of price fixing in the tire industry in the last 20 years, Millis said. The previous cases involved charges brought against Goodyear and Firestone, but both were dismissed, he said.

The companies that received subpoenas either produce tires that are supplied to auto and truck makers or manufacture replacement tires that are sold to consumers through retail outlets.

It could not be determined if the probe was focusing on a specific segment of the industry. Millis, however, said it was more likely to involve the replacement tire business.

Goodyear spokesman John Perduyn said the company was cooperating with government investigators. The company has supplied documents, but no managers or employees have been called before the grand jury to date, he said.

“All we know is that we were told the investigation involves possible restraint of trade or price fixing,” he said.

Reuters quoted an industry source as saying the probe involved price fixing and the government requested sales employees’ diaries, expense accounts and telephone records for the past four years.

Goodyear, one of only two remaining U.S.-based tire companies, has often acted as the industry’s pricing leader, being the first to announce increases that are later followed by other manufacturers.

Perduyn said the company has raised prices two times this year. In January, when announcing a price increase, the company said some grades of rubber had more than doubled in price since early 1994.

In its Aug. 14 filing with the SEC, Goodyear said it received a Justice Department subpoena “in connection with an industrywide investigation . . . into possible violations of Section 1 of the Sherman Act by tire manufacturers.”

Section 1 of the Sherman Act prohibits unreasonable restraint of trade, including price fixing, customer allocation, market allocation and bid rigging. Company and government officials didn’t say which of those areas the government is investigating.

Bridgestone/Firestone, Michelin and Dunlop and Cooper officials also said they had supplied documents to federal authorities. Officials of Pirelli and Continental General could not be reached for comment.

Trevor Hoskins, spokesman for Bridgestone/Firestone, a unit of Japan-based Bridgestone Corp., said the company was aware of the probe and was confident nothing would come of it.

“We feel sure that when the investigation is successfully concluded, it will be found that we comply with the antitrust regulations,” he said.

In Wednesday trading, Goodyear shares fell $1.50 to $39.50; Cooper Tire lost 50 cents to $25.25.