Jamestown, N.Y.-based engine manufacturer Cummins, Inc., has agreed to a settlement with the U.S. Dept. of Justice that will see it pay a more-than-$1.67 billion penalty to settle claims by regulators that it unlawfully altered hundreds of thousands of pickup truck engines to bypass emissions tests.
According to Justice, which announced the agreement in principle Dec. 22, Cummins is alleged to have violated the Clean Air Act, specifically the portion of the federal law that requires car and engine manufacturers to comply with emission limits.
The $1.675-billion fine, if fully paid, will be the largest civil penalty the DOJ has secured under the Clean Air Act and the second-largest environmental penalty ever. In settling with Justice, Cummins said in a statement that the "company has cooperated fully with the relevant regulators, already addressed many of the issues involved, and looks forward to obtaining certainty as it concludes this lengthy matter."
Both Cummins and Justice said the company had disclosed the possible violations to regulators including the U.S. Environmental Protection Agency, the California Air Resources Board and the Environment and Natural Resources Division of the DOJ in 2019. Since then, Cummins recalled model year 2019 Dodge RAM 2500 and 3500 trucks and 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 of the various recalls. The Dodge Ram 2500 and 3500 are fleet vehicles for many general contractors and are known for their hauling capabilities.
In its statement, the DOJ accused Cummins of installing so-called "defeat devices" — controls that can bypass or defeat factory-installed emissions controls — on approximately 630,000 2013-2019 Ram 2500 and 3500 truck engines, as well as other emission control devices on roughly 330,000 2019-2023 Ram 2500 and 3500 truck engines. Justice said these defeat devices rendered emission sensors and onboard computers out of compliance.
"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," said Attorney General Merrick Garland in a statement. "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 cascading effect of those pollutants can, over long-term exposure, lead to breathing issues like asthma and respiratory infection."
Cummins disputes that any excess emissions occurred from the engines and their controls involved and said, in its statement, "The company has seen no evidence that anyone acted in bad faith and does not admit wrongdoing."
Cummins said that it expects to record a charge of approximately $2.04 billion in the fourth quarter of 2023 to resolve these and other related matters involving the approximately 1 million trucks that have been recalled. The company said approximately $1.93 billion relates to payments that it expects to make in the first half of 2024. Stellantis, the automaker that produces the Dodge RAM 2500 and 3500 vehicles, declined to comment. The settlements are subject to final regulatory and judicial approvals.
