Lucas Industries has agreed to pay another $88m (pounds 58m) to settle claims that it supplied sub-standard parts to the US Navy. The decision ends a two-year Pentagon investigation into the company. The car parts and aerospace company will make further provisions of pounds 95m when it announces its profits on Monday, and said the division that caused the trouble is to be sold, writes Russell Hotten.
Lucas has already paid a pounds 12m fine to settle criminal proceedings and last year said provisions of pounds 200m included an undisclosed amount to cover the US action.The settlement avoids years of costly and complex litigation and the possibility that Lucas would struggle to win new defence contracts in the US until the problems had been settled. George Simpson, Lucas chief executive, said the financial impact of the US troubles was "out of all proportion to the issues involved, but we believe this was the best settlement available".