General Motors has agreed to pay $900m to end an investigation into its handling of an ignition-switch defect linked to 124 deaths, two sources told Reuters.
No individuals would be charged in the criminal case, one of the sources said, and the deal will see the American automaker sign a deferred-prosecution agreement that will put the case on hold while GM fulfils terms of the deal.
This means GM will be criminally charged with hiding the defect from regulators and in the process defrauding consumers, but the case may eventually be dropped if it abides by the agreement. The terms of the deal with the US government were not immediately known.
The agreement was expected to be announced on Thursday, the sources said, but any deferred-prosecution agreement would require court approval. GM declined to comment and spokeswomen for US prosecutors in New York and in Washington also declined to comment.
"I am very hopeful the Department of Justice will hold GM fully accountable and presses for an acknowledgement of responsibility as well as monetary penalties," Democratic senator Richard Blumenthal of Connecticut said in a telephone interview with Reuters.
The case revolved around a defect in ignition switches on Chevrolet Cobalts, Saturn Ions and other GM vehicles that could cause engines to stall, air bags to fail to deploy and power steering and breaks to stop operating effectively.
Though engineers and managers at GM were aware of the issue decades ago, the first recalls only started in February 2014, despite years of consumer complaints, and the company agreed with the US Transportation Department in May 2014 to pay a $35m fine over its delayed response to the defect.
The $900m the company is now expected to pay, confirmed by a second source, is less than the $1.2bn paid to resolve a similar case by Toyota, which was slower to cooperate with regulators in response to accusations that it concealed a problem in its vehicles that caused them to accelerate suddenly.
In contrast, GM Chief Executive Mary Barra was quick to act appointing a new safety czar, overhauling GM's product engineering organization and firing 15 executives connected to the mishandling of the defect, establishing a special fund to compensate victims and recalling more than 30 million vehicles in North America in 2014 to fix a wide array of defects.
The company is also facing more than 200 civil lawsuits over the ignition switch and other safety recalls from 2014, from plaintiffs seeking damages for deaths and injuries blamed on vehicle defects, as well as economic losses such as lost vehicle value. The first of the civil cases is slated for trial in January 2016.
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