GM to pay $900M in ignition switch settlement

NEW YORK, Sept. 17 (UPI) -- General Motors on Thursday agreed to a $900 million settlement to resolve a criminal investigation into its delayed recall of 2.6 million cars for defective ignition switches.

The settlement, announced Thursday by the U.S. Attorney's Office in New York, calls for a payment of $900 million and the signing of a deferred-prosecution agreement. The company will not be obligated to enter a guilty plea, and no company officers will be charged.

The terms were expected to include a criminal charge that GM hid flaws in ignition systems from safety regulators and customers, thereby defrauding them, but the case will be "put on hold" until the company fulfills the financial terms of the agreement.

Faulty ignition systems have been tied to 124 deaths and several hundred injury claims. The settlement includes felony charges of wire fraud and of attempting to conceal a safety defect from regulators. Prosecutors credited GM with establishing an independent compensation fund, which is expected to pay out $625 million to victims.

GM and prosecutors were involved in negotiations for months over the matter. The government subpoenaed millions of pages of records and interviewed dozens of witnesses in the past 18 months.

The talks were first reported in May, but approval by the company's board of directors came together quickly through telephone calls in the past several days.

The expected payout of $900 million is less than Toyota's penalty of $1.2 billion paid to resolve a similar issue. The settlement must still be approved by a federal judge.