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U.S., ARIZONA REACH ENVIRONMENTAL AGREEMENTS WITH

Criminal Plea Agreement and Civil Settlement Call for

WASHINGTON, D.C. - TRW Vehicle Safety Systems Inc. will resolve charges that it violated hazardous waste laws at its airbag manufacturing plant in Queen Creek, Ariz., under a civil settlement and criminal plea agreement announced today by the United States and the State of Arizona.

Vehicle Safety Systems Inc. (VSSI), a wholly owned subsidiary of TRW Inc., agreed to plead guilty to federal and state criminal charges in plea agreements with the United States and Arizona filed today in Phoenix. The Michigan-based company will pay a $6 million criminal penalty to the United States and a $6 million criminal penalty to Arizona. The plea agreements also require VSSI to establish an environmental management system at two airbag factories in Arizona and one in Nevada.

In a separate action, VSSI has agreed to pay a $5.6 million civil penalty that will be divided equally between the United States and Arizona under a civil settlement filed today in U.S. District Court in Phoenix. This agreement, filed by the U.S. Justice Department and the Arizona Attorney General on behalf of the EPA and the Arizona Department of Environmental Quality, obligates VSSI to perform more than $5.7 million worth of projects to enhance the environment and contribute $1.5 million to clean up the Butterfield landfill in Mobile, Ariz. that is contaminated with hazardous waste produced by VSSI.

"These two vigorous enforcement actions superbly demonstrate how the federal government and states can partner to achieve significant environmental benefits," said Steve Herman, EPA's Assistant Administrator for Enforcement and Compliance Assurance. "These settlements also serve as a warning to other companies that mismanage hazardous waste. If you break the law, you will pay the penalty."

VSSI uses sodium azide, a toxic and potentially explosive compound, to manufacture vehicle airbag restraint systems. Sodium azide is a component of the propellant that inflates the airbag.

The Resource Conservation and Recovery Act requires companies that produce, store, transport and dispose of hazardous waste to manage it in accordance with regulatory requirements. The civil settlement filed today settles claims that VSSI failed to meet these requirements.

In the criminal plea agreement filed today, the company admitted that it knew the Butterfield landfill was not authorized to accept hazardous waste and that the sodium azide-contaminated waste was potentially harmful to the public and the environment. VSSI also admitted that it knew it was illegal to store this waste onsite at its factory, without a permit.

The plea agreement directs VSSI to create and maintain for three years an environmental compliance plan at its three plants, to ensure that the company does not commit more violations of the type it admitted to today. As part of the plan, VSSI will hire an auditor to evaluate its operations and report to state and federal regulators. The plea agreement also directs VSSI to pay for full-page ads in Arizona newspapers, within 10 days after the Court accepts the plea, describing the company's illegal actions, its conviction, and the preventative steps it will take in the future.

"Companies that work with the most hazardous materials cannot duck their legal obligation to protect the public and the environment," said Lois Schiffer, the Assistant Attorney General for the Environment at the Justice Department.

As part of the civil settlement, VSSI will complete a comprehensive assessment of its facility, determine whether corrective measures are needed to address pollution, and undertake any necessary measures at the site, such as closing surface impoundments and related sumps and tanks. The cleanup of this site is estimated to cost up to $12 million.

The civil settlement also calls for VSSI to pay $1.5 million toward clean up of hazardous waste contamination at the Butterfield landfill. Waste Management of Arizona, owner of the landfill, has agreed to undertake the cleanup of that site, and this commitment is incorporated in the civil settlement filed today.

The civil settlement also requires the company to conduct several environmental projects that will provide water conservation benefits and an emergency "911" notification system for the citizens of Maricopa County. Other projects include improvements to VSSI's facilities that are not legally required, but will reduce the amount of hazardous waste generated or disposed of by VSSI, minimize spills, and ensure that hazardous waste will not reach the soil or groundwater.

The criminal case was investigated by the EPA Criminal Investigative Division and the Arizona Attorney General's Office.

The civil settlement is subject to a 30-day public comment period and final approval by the Court. The plea agreement also must be approved by the Court.

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