U.S. Launches Price-Fixing Probe of Carbon Fiber Industry

The Justice Department’s antitrust division is investigating allegations of price-fixing by makers of carbon fiber, known as graphite, used in golf clubs, tennis rackets and other goods, the government said Thursday.

“The antitrust division is looking at the possibility of anti-competitive practices in the carbon fibers industry,” a department spokeswoman said.

Meanwhile, a Los Angeles grand jury is also investigating the industry.

Lightweight carbon fibers, known as graphite when used in sporting equipment, add strength and rigidity to golf clubs and tennis rackets without making them heavy and unwieldy.

The government began investigating with subpoenas as long ago as January, according to one of the companies.

A number of the companies also face civil suits in federal court in California alleging that they fixed prices between 1993 and mid-1998.

Hexcel Corp. of Stamford, Conn., acknowledged earlier this year in a financial filing that its documents had been subpoenaed. But its vice president and general counsel said he was told by the government that the company was not a target of the federal investigation.

“As of [Wednesday] they told us we were not a target. I have no expectation that will change,” said Ira Krakower, general counsel of the company. “We have cooperated fully with the Justice Department.”

David Lilley, president of Cytec Industries Inc. of West Paterson, N.J., said the company “had not been accused of price-fixing.” A spokesman said the company was not a target of the Justice investigation.

Lilley said some of the civil suits occurred because of a Los Angeles grand jury investigation of the industry.

“As is often the case, this grand jury investigation recently spawned a few related class-action lawsuits. We believe those are without merit with respect to Cytec Industries Inc.,” he said.

Cape Composites Inc. of San Diego has brought one of the four civil suits. Its complaint, filed in a federal court in California, names Hexcel as a defendant, along with a number of other companies.

The others include Mitsubishi Rayon Co. of Japan and its subsidiaries, Newport Adhesives & Composites Inc. of Irvine and Grafil Inc. of Sacramento; Toho Rayon Co. of Tokyo and its subsidiary, Toho Carbon Fibers of Menlo Park; and Toray Industries Inc. of Tokyo.

None of the U.S. companies had any comment.