Cummins agrees to record-setting engine emissions settlement (updated)

Cummins

10/01/2024 15:52

(Adds Cummins statement, background)
    By David Shepardson
       WASHINGTON, Jan 10 (Reuters) - Truck engine maker
Cummins  CMI.N  agreed to settle a lawsuit filed Wednesday by
the Justice Department and California and pay a record-setting
fine of about $1.65 billion for installing defeat devices on
hundreds of thousands of engines.
    In December, the Justice Department said Cummins had agreed
in principle to the settlement the government said was the
largest-ever civil penalty for a Clean Air Act violation. Under
the proposed settlement subject to court approval, Cummins will
pay $1.48 billion to the federal government and $164 million to
California, according to court documents.
    The lawsuit said Cummins allegedly installed so-called
"defeat devices" to bypass or disable emissions controls such as
emission sensors and onboard computers.
    Cummins said the settlement filed Wednesday is "consistent
with the previously announced settlement terms" and "do not
involve any additional financial commitments beyond those
disclosed by Cummins" last month. 
        The lawsuit said Cummins used defeat devices on 630,000
2013 to 2019 RAM 2500 and 3500 pickup truck engines to cheat
emissions control requirements. The government also said Cummins
had undisclosed auxiliary emission control devices on 330,000
2019 to 2023 RAM 2500 and 3500 pickup truck engines but they did
not result in excess emissions.
  
        U.S. Attorney General Merrick Garland said preliminary
estimates suggest Cummins defeat devices "caused them to produce
thousands of tons of excess emissions of nitrogen oxides."   
  
        Cummins said earlier it expects to take a $2.04 billion
charge in the fourth quarter to resolve claims relating to the
engines. "The company has seen no evidence that anyone acted in
bad faith and does not admit wrongdoing," Cummins said.
  
        RAM-owner Stellantis  STLAM.MI  declined to comment. The
960,000 vehicles have been recalled and emissions controls
software updated. Cummins must pay higher penalties if at least
85% of recalled vehicles do not get software updates.
  
        Cummins first announced in April 2019 it was internally
reviewing its emissions certification process and compliance.
  
        In August 2022, the U.S. business of Fiat Chrysler
Automobiles -- now part of Stellantis -- pleaded guilty to
criminal conspiracy and paid nearly $300 million to resolve a
Justice Department diesel-emissions fraud probe. 
  
        Volkswagen  VOWG_p.DE  paid $1.45 billion in U.S. civil
penalties in 2017 after the German automaker in 2015 disclosed
it had cheated emissions tests by installing defeat devices" in
11 million vehicles worldwide, using sophisticated software to
reduce emissions only during emissions tests.
  

 (Reporting by David Shepardson; Editing by Chizu Nomiyama and
Jonathan Oatis)
 ((David.Shepardson@thomsonreuters.com; 2028988324;))