New York, NY - Engine manufacturer Cummins Inc. has reached an agreement in principle to pay a staggering penalty of over $1.67 billion to settle claims by regulators that the company unlawfully tampered with hundreds of thousands of pickup truck engines to evade emissions tests. The U.S. Justice Department announced the agreement on Thursday, highlighting that Cummins' alleged actions violated the Clear Air Act, a federal law that mandates compliance with emission limits.

If finalized, the $1.675 billion fine will mark the largest civil penalty ever secured under the Clear Air Act to date and the second largest environmental penalty ever achieved by the Justice Department. The allegations center around the installation of defeat devices, capable of bypassing emissions controls, on approximately 630,000 Ram 2500 and 3500 pickup truck engines manufactured between 2013 and 2019. In addition, undisclosed auxiliary emission control devices were allegedly installed on roughly 330,000 Ram 2500 and 3500 engines produced from 2019 to 2023.

Attorney General Merrick B. Garland expressed concern over the grave impact of Cummins' actions on public health and safety, stating, "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." Preliminary estimates by the Justice Department suggest that the defeat devices on Cummins engines have resulted in thousands of tons of excess emissions of nitrogen oxides, with potential health consequences including respiratory issues and infections arising from prolonged exposure to these pollutants.

Cummins, however, released a statement on Friday asserting that it does not admit any wrongdoing and highlighted its previous cooperation with regulatory bodies. The company emphasized actions taken since 2019, including a recall of 2013-2018 Ram 2500 and 3500 trucks and another recall of 2019 Ram 2500 and 3500 trucks. Cummins indicated that it had already set aside $59 million for estimated costs related to these recalls and anticipates an additional charge of approximately $2.4 billion in the fourth quarter of 2023 to address these matters and other related issues involving approximately one million pickup truck applications in the United States.

The agreement in principle reached by Cummins is with the U.S. and State of California, but it remains subject to final approvals. In response to the news, shares for Cummins Inc. fell by approximately 3% on Friday morning. Last month, the engine manufacturer, headquartered in Columbus, Indiana, reported net income of $656 million for the third quarter, generated from a revenue of $8.4 billion.

The Justice Department's pursuit of this record-breaking penalty underscores the seriousness with which emissions cheating is being addressed, as regulators seek to hold accountable those who violate environmental regulations in the quest for profit.