PRINCETON, N.J. (March 26, 2001) — Exide Technologies has reached a plea agreement with the U.S. Attorney for the Southern District of Illinois, ending an investigation of Exide regarding past dealings between the company´s prior management and Sears, Roebuck and Co.
According to terms of the settlement, announced in an Exide press release March 23, Exide Illinois Inc., a subsidiary of Exide Technologies, has agreed to plead guilty to conspiracy to commit fraud in connection with batteries it manufactured and sold to Sears under a contract that began in the fall of 1994. Under the settlement, Exide will pay a fine of $27.5 million, payable over five years, with the first year´s payment being $3 million.
The government, in turn, said it will not prosecute any other criminal charges against Exide for any matter relating to the contract between Exide and Sears and/or any other matters currently known to the government as a result of its investigation.
In Exide´s press release, Robert A. Lutz, the company´s chairman and CEO, said: "This agreement brings to a close investigations of Exide relating to the questionable business practices of this company´s former management team." Mr. Lutz joined Exide in December 1998 after a career as an executive with Chrysler Corp.
"There´s a world of difference between the Exide of then and the Exide of now," he added. "We´ve replaced all managers who were implicated in any way, and are ourselves pursuing legal action against the three top former executives. We have an all-new board of directors. And we now have a zero-tolerance ethics and integrity code."
Exide "worked diligently with the government to ensure that the agreement we reached would not impede Exide´s ability to continue to serve our valued customers in our key industrial and transportation markets, and to continue our company´s restructuring program," Mr. Lutz continued.
"We also believe that the company can accommodate this settlement within its existing financial capacity. And, with it, we can now get back to concentrating our full and undivided attention to our mission of becoming the premier provider of electrical-energy storage solutions in the world."
On the brink of going to trial March 26 on related litigation, Advance Auto Parts and Exide Technologies jointly announced March 23 that the companies have reached a settlement of the lawsuit filed by Advance against Exide in the U.S. District Court of the Western District of Virginia, involving a battery supply contract between the two firms.
The case — which involved the enforceability of a battery supply agreement entered into between Advance and GNB Technologies, now merged into Exide — was scheduled for trial on March 26. Terms of the settlement were not disclosed.
"We are pleased with the outcome," said Jim Wade, Advance´s president.
"Batteries are a significant part of our business, and they will continue to be," he said. "We will continue to build on our relationships with suppliers, employees and customers as we continue as one of the most respected auto parts retailers in America."
Tom Minner, President of Exide´s Global Transportation Business Group, said the company also is pleased with the outcome. "This resolution allows us to continue to focus on our mission to become the global leader of stored electrical energy solutions, and the preferred supplier of automotive, heavy duty, marine and other batteries and technologies."
Advance Auto Parts is the primary trade name for Advance Stores Co. Inc., the second-largest auto parts chain in the nation.