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Navistar Cleared to Sell Non-Compliant Engines

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August 31, 2012 by   Leave a Comment

The U.S. Environmental Protection Agency (EPA) said Thursday (Aug. 30) that it will allow manufacturers to sell diesel engines that don’t meet federal emission standards.

As reported by the Chicago Tribune, the ruling will allow Navistar International Corp. to sell its non-compliant engines by paying a maximum fine of $3,800 each — double what it has been paying.

“We can now provide our dealers and customers with clarity and certainty as we transition to our clean engine technology and look forward to utilizing the Final Rule as needed,” Troy Clarke, Navistar president and chief operating officer, said in a statement.

The fines will not be retroactive, so Navistar will not have to pay extra for the non-compliant engines it has already sold.

The company’s heavy-duty engines are used in school buses, commercial trucks and other vehicles over 33,000 pounds. The company is also parent to RV manufacturer Navistar RV.

Navistar has non-compliant engines because technology it developed failed to meet 2010 emission standards to reduce smog-causing nitrogen oxide.

That technology cost it approximately $700 million since 2001. Navistar changed its course after reporting a second-quarter loss of $172 million. This month, the Lisle-based company said it would combine its technology with the approach used by its competitors to further lower emissions and get its engines certified. Navistar is also buying a competitor’s engines to meet the standards.

The EPA issued an interim rule in January that allowed manufacturers to sell non-compliant engines as long as they paid a fine of $1,919 per engine. Navistar competitors, including Mack Trucks Inc. and units of Daimler AG and Cummins Inc., successfully sued federal regulators, claiming that the agency was giving Navistar preferential treatment.

So, the EPA increased the fine Thursday.

In a statement about its final rule, the EPA said: “This flexibility allows manufacturers to continue producing and selling engines that come close to air pollution standards as they work toward full compliance.”

 

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