GM or General Motors announced that they will settle with federal prosecutors regarding a criminal investigation regarding a fatal ignition problem on their small cars.
According to ABC News, General Motors will pay a fine amounting around $900 million in a deferred prosecution agreement on a wire fraud charge under the deal. Meaning, any charges against GM will be dismissed if the company complies with oversight and other terms for three years, said one source.
All sources refused to be identified for the reason that the agreement is not scheduled to be formally announced until later Thursday.
As reported by Dispatch, the criminal case against GM has been linked to 124 deaths, a source said Wednesday.
The Detroit-based auto maker was charged criminally because of allegedly hiding the defect from regulators and in the process, defrauding customers. However, the case will be put on hold while GM complies with the terms of the deal.
As for the official comment, General Motors refused to give one, along with a spokeswoman for the US prosecutors in Manhattan.
The terms and conditions regarding GM's deal with the government were not immediately discussed, including how many counts the American multinational car maker would be charged with. Another thing to be discussed is whether the automaker agreed to hire an independent monitor, or how long it would need to abide by the agreement before the case to be dropped.
According to Forbes, Japanese automaker Toyota, also encountered a similar suit. Just last year, the U.S Justice Department prosecuted Toyota after it admitted that it misled U.S consumers by concealing and making deceptive statements regarding an unintended acceleration problem in its vehicles.
Toyota even received a bigger fine than GM's $900 million as the Japanese car company was fined a $1.2 billion penalty.
As for the specific details on GM's ignition issue, it was reported that ignition switches on Chevrolet Cobalts, Saturn Ions and other GM vehicles could cause their engines to stall, resulting them with preventing air bags from deploying during crashes.
Also, power steering and power brakes did not operate when the ignition switch unexpectedly moved from the "on" position.
