Troubled Waters: Cummins Settles for Record $1.675B Civil Penalty

Cummins (NYSE:CMI) has agreed to pay a massive $2B in fines and remedies to settle a lawsuit filed by the U.S. Department of Justice and the state of California. The lawsuit accused the company of installing devices intended to deceive emissions controls, as announced by the DoJ.

The proposed settlement demands that Cummins (CMI) pay a staggering $1.675B in civil penalties, which marks the largest ever assessed in a Clean Air Act violation. An additional $325M will be spent to remedy the violations connected to the software “defeat devices” that circumvented emissions testing and certification requirements.

Furthermore, Cummins (CMI) is obligated to “execute a nationwide vehicle recall to repair and replace the engine control software in hundreds of thousands of RAM 2500 and RAM 3500 pickup trucks equipped with the company’s diesel engines,” as per the DoJ statement.

The agreement also mandates the company to “extend the warranty period for certain parts in the repaired vehicles, fund and undertake projects to mitigate excess ozone-creating nitrogen oxides emitted from the vehicles, and implement new internal procedures aimed at preventing future emissions cheating.”