Cummins to Pay $2 Billion Fine After Emissions Probe
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Cummins Inc. has agreed to pay $2 billion in penalties but admitted no wrongdoing as part of a U.S. Department of Justice investigation that determined devices that bypassed emissions sensors had been installed on Cummins engines in hundreds of thousands of Class 2B and Class 3 Ram trucks.
Cummins agreed to a $1.675 billion civil penalty to settle claims — the largest ever secured under the Clean Air Act — plus $325 million for pollution remedies.
The so-called defeat devices, which DOJ defined as parts or software that bypass, defeat or render inoperative emissions controls such as emissions sensors and onboard computers, were allegedly installed on 630,000 model year 2013 to 2019 Ram 2500 and 3500 pickup truck engines. The investigation also targeted undisclosed auxiliary emission control devices that were claimed to be installed on 330,000 model year 2019 to 2023 Ram 2500 and 3500 pickup truck engines.
“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,” said U.S. Attorney General Merrick Garland. “The cascading effect of those pollutants can, over long-term exposure, lead to breathing issues like asthma and respiratory infections.”
Columbus, Ind.-based Cummins said it conducted an extensive internal review and worked with the regulators for over four years, and stressed it had seen no evidence that anyone acted in bad faith. The agencies it worked with on the review included the U.S. Environmental Protection Agency, the California Air Resources Board, the Environment and Natural Resources Division at DOJ and the California Attorney General’s Office.
The engine specialist expects to record a charge of about $2.04 billion against its fourth-quarter 2023 earnings. Around $1.93 billion relates to payments that are expected to be made in the first half of 2024, it added.
Cummins posted third-quarter 2023 net income of $656 million, compared with a profit of $400 million in the same period in 2022. It reported Q3 revenue of $8.431 billion, an increase of 15% from $7.333 billion in the same quarter in 2022.
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