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GM To Pay $8M for Faulty Parts

March 17, 1999

INDIANAPOLIS (AP) _ The U.S. Attorney for the southern district of Indiana announced Tuesday that General Motors Corp. and its former subsidiary, Allison Engine Co. of Indianapolis, have agreed to an $8.15 million settlement over faulty aircraft parts.

The parts in question were manufactured and delivered by Allison and sold to the United States Air Force for use on C-130 aircraft. In 1991, the Air Force determined that certain airplane blades Allison had produced for T56 turbine engines on C-130 aircraft did not comply with blueprint requirements.

Tuesday’s settlement requires General Motors to pay the United States $6.39 million, which represents the total settlement less $1.76 million that the company expended as payment to produce kits to fix problems with the blades. The blades were ultimately replaced.

General Motors owned Allison at the time of its contract with the Air Force. The Indianapolis company was later sold and is now owned by Rolls Royce.

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