The Environmental Protection Agency (EPA) is looking into 7,600 “transition engines” Navistar built in 2009 that the agency says weren’t properly certified under the Clean Air Act.
However, Navistar believes it handled the matter appropriately.
“Navistar acknowledges that it has received notice from the U.S. EPA related to the use of 2009 transition engines,” said Navistar spokesman Steve Schrier, but “We firmly believe our 2010 transition was appropriate, and we will continue our discussions and cooperation with the agency on this matter.”
Fines up to $285 million could be levied against the OEM since each violation carries a fine of up to $37,500, Reuters reported.
According to a Jan. 30 letter it sent to Navistar, EPA said Navistar had partially built the 7,600 engines in question in 2009 but didn’t complete production of them until 2010, which could be a violation of the Clean Air Act because the OEM didn’t adhere to rules relating to the engines’ specific model year.
Reuters quoted equities analyst Stephen Volkmann as saying the transition engine notice is part of a larger issue and possibly part of a “larger settlement” with EPA, and that fines would likely be smaller and something Navistar could “shoulder.”
He also said the issue of transition engines may go beyond Navistar.
The EPA stated it “does not comment on ongoing enforcement matters.”
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