Chrysler to Pay in Mileage Suit

Chrysler Motors Corp. pleaded no contest today to charges that thousands of its vehicles were sold as new even though company employees had driven them with the odometers disconnected.

The company agreed to pay more than $16 million to owners of the cars as part of a settlement of current and potential class-action lawsuits.

Under the plea, Chrysler Motors, Chrysler Corp.’s automotive subsidiary, neither contested nor admitted the criminal charges contained in a 16-count indictment returned in June by a federal grand jury in St. Louis.

The plea came as the case was to go to trial in U.S. District Court here.

The indictment accused Chrysler of defrauding dealers and the public by disconnecting odometers on millions of new cars used by company department heads since 1949.

The indictment alleged that 60,000 vehicles manufactured at Chrysler’s seven plants in the United States and two in Canada had their odometers disconnected as they came off the assembly lines between July, 1985, and December, 1986.

Chrysler Chairman Lee Iaccoca called the practice “dumb” in a public apology a week after the indictment was returned.