Navistar Agrees to Pay $52 Million Civil Penalty for Sale of Certain 2010 Engines
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Navistar Inc. has agreed to a civil settlement with the U.S. Department of Justice under which the manufacturer will pay a $52 million penalty but admit no wrongdoing in connection with the sale of 7,749 heavy-duty diesel engines in 2010 that the government alleged were sold in violation of the Clean Air Act.
The agreement also calls for the truck maker to retire its remaining balance of oxides of nitrogen credits under the U.S. Environmental Protection Agency’s Averaging, Banking & Trading program, and spend at least $30 million over the next four years implementing a mitigation program that will result in the reduction of at least 10,000 tons of NOx emissions.
The Oct. 25 agreement ends a six-year legal dispute that began in 2015 when the government filed a civil lawsuit against Navistar alleging that in 2010, after lower emission standards went into effect in 2009, the company introduced into commerce heavy-duty diesel engines that were not certified and did not meet the lower emission standards.
Although it agreed to the civil penalties, in the consent decree, Navistar denied the violations and has not admitted any liability arising out of the “transactions or occurrences” alleged by prosecutors.
“The parties dispute the appropriate relief, including the existence and/or amount of excess emissions of NOx resulting from the alleged violations,” the consent decree said. “The parties have agreed, however, to resolve their dispute through payment of a civil penalty and the use of mitigation to offset past and future excess emissions.”
In an Oct. 29 statement, the truck maker, headquartered in Lisle, Ill., acknowledged the agreement and said, “Navistar is pleased to put this legacy issue behind us and eager to focus on transportation solutions for the future.”
According to the consent decree, Navistar had marketed and sold the engines installed in its International brand trucks as being EPA-certified model year 2009 engines, but completed all manufacturing and assembling processes for the engines in 2010, according to EPA. EPA said that Navistar began building the engines during model year 2009 by installing crankshafts in engine blocks, the first step in producing an engine. Navistar completed the engines in 2010, after the new emissions standards took effect, EPA said.
A federal judge held that the engines were in fact model year 2010 engines and required to be covered by a 2010 certificate of conformity demonstrating compliance with the lower emission requirements.
In this episode, host Michael Freeze asks, how are companies saving money by leasing trucks rather than owning? For answers, we speak with Jim Lager of Penske Truck Leasing and Al Barner of strategic fleet solutions at Fleet Advantage. Hear a snippet above, and get the full program by going to RoadSigns.TTNews.com.
In a statement, EPA said that Navistar’s implementation of the mitigation program is expected to reduce NOx and other pollutants in areas disproportionately impacted by mobile source air pollution — including communities surrounding ports, depots and warehouses.
Larry Starfield, Acting Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance, said, “Today’s settlement will protect these vulnerable communities by preventing the emission of 10,000 tons of NOx from older, heavily-polluting commercial vehicles and equipment.”
The mitigation agreement specifically calls for Navistar to permanently destroy any combination of on-highway heavy-duty diesel engines from model year 2009 or older that are used to power Classes 4-8 heavy-duty diesel trucks, transit, intercity or school buses, or any other on-highway heavy-duty diesel vehicles or various nonroad heavy-duty diesel engines.
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