Cummins Inc. will pay a whopping $1.67 billion fine to settle claims it violated the Clean Air Act by using devices that bypass emissions sensors on hundreds of thousands of pickup truck engines, potentially making the diesel engine maker responsible for the second-largest civil environmental penalty ever.
The $1.67 billion is the second largest environmental penalty ever imposed in civil court. (AP ... [+]
The Department of Justice said the company installed "emissions defeat devices," or parts that bypass or disable a car's built-in sensors that ensure the vehicle is complying with legal limits on pollution, in 630,000 RAM pickup trucks from 2013 to 2019.
Cummins also used undisclosed emission control devices in another 330,000 RAMs from 2019 to 2023, according to a DOJ statement.
Attorney General Merrick Garland said in the statement the fine is the largest civil penalty secured by the Justice Department and the second largest environmental penalty ever imposed in civil court, sitting behind the $20.8 billion fine paid by BP over its massive 2010 oil spill in the Gulf of Mexico.
Preliminary estimates from the Justice Department suggest that defeat devices on some of the engines led to thousands of tons of excess emissions of nitrogen oxides, which Garland said could lead to breathing issues like asthma and respiratory infections over long-term exposure.
Cummins said in a statement addressing the settlement that it has addressed many of the issues involved and worked collaboratively with regulators for more than four years, adding it expects a charge of approximately $2 billion in the fourth quarter to “resolve these and other related matters.”
Cummins has already recalled 2019 RAM 2500 and 3500 trucks and has initiated a recall of the 2013-2018 model years of the truck.
“I want to emphasize that the company has seen no evidence that anyone acted in bad faith and does not admit wrongdoing,” Cummins External Communications Director Jon Mills told Forbes, adding the engine maker is making multi-billion dollar investments into decarbonization and electric vehicle manufacturing.
Shares of Cummins traded down more than 2% on Friday and closed at $237.01 per share.
The device recalls and other related recalls cost Cummins an estimated $59 million. The company reported $8.4 billion in revenue in the third quarter, raking in $656 million in net income. Cummins disclosed a review of the investigation into the emissions defeat devices when they began in 2019. Two years before the investigation, Volkswagen AG also found itself caught up in an investigation into its use of defeat devices. The company later agreed to plead guilty to three criminal felony counts, and pay a $2.8 billion criminal penalty and $1.5 billion in civil penalties over the selling of 590,000 diesel vehicles in the U.S. that used the devices.
Engine maker Cummins agrees to pay $1.67 billion to settle claims it bypassed emissions tests (AP)
Cummins' to pay $1.675 billion penalty over truck engine emission defeat devices (Reuters)