Cummins Inc. has reached an agreement with the federal government and California to settle claims regarding its emissions certification and compliance process for certain engines primarily used in pickup truck applications.
According to the Department of Justice, Cummins has agreed 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.
Cummins said it “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.”
Cummins also said that it conducted an extensive internal review and worked collaboratively with the regulators for more than four years, adding that it “has seen no evidence that anyone acted in bad faith and does not admit wrongdoing.”
DOJ said Cummins 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.
Cummins noted that it 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 pick-up truck applications in the United States. Of this amount, approximately $1.93 billion relates to payments that are expected to be made in the first half of 2024.
Attorney General Merrick B. Garland said the $1.675 billion penalty is “the largest civil penalty we have ever secured under the Clean Air Act, and the second largest environmental penalty ever secured.
“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,” Garland added. “For example, in this case, 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 infections.”
Garland concluded that such a penalty “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.”
The settlements are subject to final regulatory and judicial approvals.