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EPA Sues Navistar, Says Some Engines Were Illegal

July 17, 2015

By Tom Berg

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Navistar Inc.’s 2009-2010 “transition” strategy for exhaust-emissions compliance has led to a lawsuit filed on Wednesday by the U.S. Environmental Protection Agency.

EPA claims 7,750 Navistar diesels sold in International trucks during 2010 were not true 2009 models, and without formal exemptions, they were illegal.

The suit is the latest development resulting from the company's tried but failed strategy to use a less costly method to meet emissions limits. It was temporarily helped by EPA in an emergency ruling that allowed continued production of the engines while Navistar continued to work on its technology. That ruling was challenged by competitors and thrown out by a federal judge.

In 2009, Navistar executives announced that their 2010 emissions strategy would include their own engines using “advanced exhaust gas recirculation,” but not selective catalytic reduction that its competitors were adopting. It also continued selling ’09 pre-SCR Cummins ISX15 diesels well into 2010, and used EPA-issued credits that it had previously earned. Executives criticized SCR, saying it put the burden of compliance on customers.

In its lawsuit this week, EPA charged that Navistar “sold, offered for sale, introduced or delivered engines that did not satisfy emissions standards applicable to model-year 2010 engines.” EPA said that because the 7,750 Navistar engines in question were not fully assembled in 2009 but in 2010, the company should have obtained an exemption in the form of a certificate of compliance, but didn’t. Navistar has said the engines should be considered “transitory” and legal.

“We dispute these allegations,” said Navistar spokesman Steve Schrier.  “We believe our 2010 engine transition was appropriate and we intend to aggressively defend our position going forward. Beyond this, we don’t comment on pending litigation.”

The company could face fines of up to $300 million, though observers say that the penalties probably wouldn’t run that high. The suit was filed in the U.S. District Court for Northern Illinois.

Navister never could quite meet absolute limits for nitrogen oxides, or NOx, and the engines proved unreliable, prompting multiple lawsuits from customers. Navistar spent millions for warranty repairs and ran numerous “campaigns” that sought to reset electronic controls and otherwise correct deficiencies.

Missed sales and financial losses caused a decline in stock value and shakeups in top management.

In 2012 Navistar abandoned its EGR-only strategy and got help from Cummins for SCR equipment, and resumed buying Cummins diesels for use in International trucks. Navistar’s sales have been recovering and its financial performance has improved.  

Comments

  1. 1. Cliff Downing [ July 20, 2015 @ 03:36AM ]

    And all of us benefit from this action by the EPA in what way? Just give Navistar a thump on the head with a moderate fine per motor in question and call it a day. The deed is done, can't be undone, and none of this will change anything about the motors in question. Legal actions and crippling fines, in the end, the rest of us will get the bill. Both what it costs Navistar and what it cost EPA to take such drastic action. We The People lose yet again.

  2. 2. Downwall Spiral [ July 20, 2015 @ 04:05AM ]

    To Cliff Cowing: Actually, Navistar paid royalties per engine to the EPA to use EGR since the EGR science is owned by the EPA. However, the fine is for the Cummins Engines that Navistar stock-piled in 2009 to install in 2010 trucks in order to increase sales. Navistar supposedly did the same thing in 2006 for 2007 emissions. If the EPA did not take royalties on EGR, the EPA would be much less blameless in Navistar's demise.

  3. 3. Dick Elston [ July 20, 2015 @ 07:41AM ]

    It is done, the horse is out of the barn, let's just go on and quit trying to place blame on either Navistar or on the EPA. What's to say that this wasn't a "get even with Jim Hebe". Please let's as an industry quit trying to point fingers in a "get even mode" and move forward with the people who build the best trucks (any brand or engine) that have ever been built to date and continue without suppressing regulations imposed by the politicians that have no idea what they are doing to the industry or the economy of that industry.

  4. 4. John Barsness [ July 20, 2015 @ 08:40AM ]

    EPA needs to be downsized to a handufl of people with no authority other than to advise congress. They are out of control.

  5. 5. John Barsness [ July 20, 2015 @ 08:40AM ]

    EPA needs to be downsized to a handful of people with no authority other than to advise congress. They are out of control.

  6. 6. Jim Moriarty [ July 20, 2015 @ 12:51PM ]

    Ain't top down socialist gubmint just wunderfull !!! Thank you Obummer.

  7. 7. Mstar [ July 21, 2015 @ 10:19AM ]

    Dick Elston, spoken from a loyal Navistar employee.
    Give us a break, Navistar broke the rules while the rest of the industry got it right. now it is time to pay up.

  8. 8. Mstar [ July 21, 2015 @ 10:20AM ]

    Dick Elston, spoken from a loyal Navistar employee.
    Give us a break, Navistar broke the rules while the rest of the industry got it right. now it is time to pay up.

  9. 9. Brad [ July 21, 2015 @ 11:45AM ]

    The EPA is not blameless in the advanced egr direction that Navistar took. This originally was their preferred technology, and endorsed its use in the Navistar engine family, as the EPA owns that technology. And Dick, not everyone else got it right. Early on the systems to monitor the DEF were just no working, enabling some people to go so far as to use water in it's place. Because of this, these engines were actually running dirtier than ever as nothing was treating the NoX. The early systems from every manufacturer were a nightmare, and caused a lot of heartache for the truck owners. The difference is that the rest of the OEM's were able to clamp down and remedy the issues, whereas Navistar adopted the SCR system as the solution. As for build dates on engines, I can't comment on that. I certainly sold 2009 engines in 2010, which I think every OEM did. If the question is 2009 or 2010 built Cummins engines, what does that have to do with Navistar as they did not manufacture the engine. The big mistake that Navistar made was to take such an arrogant attitude toward the 2010 emissions technology which promoted a concerted effort by all of the other OEM's to set their competitive sights on them. Hard lesson learned.

  10. 10. retard [ July 21, 2015 @ 01:06PM ]

    top down not the democrat economic policy, usually not socialist,

  11. 11. Tony [ July 24, 2015 @ 10:12AM ]

    This is Government at it's worst. Comply or else!

  12. 12. Bobby [ July 24, 2015 @ 10:17AM ]

    It is interesting that the EPA is at it again. I have e-mails from them stating that they could not tell me which way was the less carbon footprint. In the end they told me they didn't have a way to measure all the emissions that was created with SCR such as transportation of and the infrastructure to deliver it. The cheesy answer was we make the rules and manufactures have to meet them. I smell foreign manufactures like Volvo and Freightliner in here pushing for another American manufacturer to get out of the way.

  13. 13. MC [ July 27, 2015 @ 03:10PM ]

    John Barsness really? Like Congress would have the slightest idea what to do. They take the side of highest bidder. Under your suggestion, the EPA would be completely powerless and corporations would be given a free pass to do whatever they damn well please. Do we need the Ohio River to catch fire again before anyone realizes our need for the EPA?

  14. 14. Joe [ July 31, 2015 @ 11:25AM ]

    Bobby, really? Freightliner and Volvo trying to push an American company out of the way? truth is Navistar made a bad decision and thy should pay for that mistake. Make a better product that is not only good for the environment but also is reliable and people will buy it.

 

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