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Cummins agrees to record penalty for emissions defeat devices

Dec. 26, 2023
Engine maker expects to record a charge of approximately $2 billion in the fourth quarter of 2023 to resolve matters involving approximately one million pickup trucks

Cummins Inc. reported Dec. 22 that it has reached an agreement in principle to pay a $1.675 billion penalty to settle claims that it violated the Clean Air Act by installing emissions defeat devices on hundreds of thousands of engines. The penalty would be largest ever for a clean air act violation and the second largest ever environmental penalty, according to a statement by the U.S. Dept. of Justice.

Defeat devices are parts or software that bypass, defeat, or render inoperative emissions controls such as emission sensors and onboard computers. The company allegedly installed defeat devices on 630,000 model year 2013 to 2019 RAM 2500 and 3500 pickup truck engines. The company also allegedly installed undisclosed auxiliary emission control devices on 330,000 model year 2019 to 2023 RAM 2500 and 3500 pickup truck engines.

“The types of devices we allege that Cummins installed in its engines to cheat federal environmental laws have a significant and harmful impact on people’s health and safety,” Attorney General Merrick B. Garland said. “Our preliminary estimates suggest that defeat devices on some Cummins engines have caused them to produce thousands of tons of excess emissions of nitrogen oxides.”

The governmental entities involved are the U.S. Environmental Protection Agency (EPA), the California Air Resources Board (CARB), the Environment and Natural Resources Division of the Department of Justice (DOJ), and the California Attorney General’s Office.

For its part, the company reported it has “cooperated fully” with the relevant regulators, already has addressed “many of the issues” involved, and “looks forward to obtaining certainty” as it concludes this lengthy matter.

“Cummins conducted an extensive internal review and worked collaboratively with the regulators for more than four years,” a company statement said. “The company has seen no evidence that anyone acted in bad faith and does not admit wrongdoing.”

Cummins disclosed a review of these matters in 2019 and has regularly updated its disclosures as that review progressed, the statement noted. The company has already recalled model year 2019 RAM 2500 and 3500 trucks and has initiated a recall of model years 2013 through 2018 RAM 2500 and 3500 trucks and previously accrued a total of $59 million for the estimated costs for executing these and other related recalls.

Cummins expects to record a charge of approximately $2.04 billion in the fourth quarter of 2023 to resolve these and other related matters involving approximately one million pickup-truck applications in the United States.

The Justice Department will work “diligently” to incorporate the agreement into a consent decree that will be filed with the U.S. District Court for the District of Columbia, Garland noted.

“Violations of our environmental laws have a tangible impact—they inflict real harm on people in communities across the country,” he said. “This historic agreement should make clear that the Justice Department will be aggressive in its efforts to hold accountable those who seek to profit at the expense of people’s health and safety.”