GM reaches $900-million deal on two criminal charges

N.Y. prosecutor won’t rule out charges against employees over faulty ignition switches

NEW YORK— General Motors agreed to pay $900 million (U.S.) to resolve criminal charges over its concealment of an ignition-switch defect linked to at least 169 deaths, federal prosecutors said Thursday.

The agreement calls for two charges — wire fraud and scheming to conceal information from government regulators — to be dropped after three years if the automaker co-operates fully.

U.S. Attorney Preet Bharara in New York did not rule out the possibility employees could still face charges.

Also Thursday, GM announced that it will spend $575 million to settle many of the civil lawsuits filed over the scandal.

The twin agreements bring to more than $5.3 billion the amount GM has spent on a problem prosecutors say could have been fixed at a cost of less than a dollar per car.

Those expenses include government fines, compensation for victims and the recall and repair of the millions of affected vehicles.

The statement of facts to which the company agreed describes in scathing terms GM’s deceitful and dismissive approach to handling a problem that was evident even before the defective switch went into production in 2002.

Consumer advocate Clarence Ditlow, executive director of the nonprofit Center for Automotive Safety, bitterly criticized the settlement.

“GM killed over a 100 people by knowingly putting a defective ignition switch into over one million vehicles,” Ditlow said. “Today, thanks to its lobbyists, GM officials walk off scot-free while its customers are six feet under.”

Bharara said he understands some victims’ families might be disappointed no individuals were arrested, but he added: “We apply the laws as we find them, not the way we wish they might be.” He also said GM was given credit for co-operating with the investigation, including sharing the results of its in-house probe.

As part of GM’s deal with prosecutors, an independent monitor will be appointed to review the automaker’s procedures for handling of safety defects. When GM employees, the media and some customers complained about the switch in 2004 and 2005, the company’s engineers rejected a cheap and simple improvement that would have significantly reduced the problem, court papers said.

The wire fraud count pertained to the company’s assurances to customers over the Internet in 2012 and 2013 of the safety of used cars they were purchasing, court papers said.

Last year, GM recalled 2.6 million older small cars worldwide to replace the faulty switches.

The faulty switches can unexpect- edly slip out of the “run” position to “off” or accessory. That shuts off the engine and disables power-assisted steering, power brakes and airbags.

Last year, GM also established a fund to compensate victims. Lawyers administering the fund accepted 124 death claims and 275 injury claims. Families of those who died will get at least $1million. GM has set aside $625 million to compensate people who accept a settlement with the fund.

Texas attorney Bob Hilliard represented 1,385 plaintiffs with death or injury claims who decided not to seek compensation from the fund.

On Thursday, GM said it has agreed to spend part of $575 million to settle those lawsuits, which include 45 deaths.