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EPA investigating Navistar’s diesel-engine production

Truck and engine company could face $285 million in fines

Truck and engine company Navistar International Corp. just got pulled over by the environmental police.

Yesterday the Illinois-based company confirmed that the Environmental Protection Agency (EPA) is investigating its diesel-engine production. In a Jan. 30 letter, the EPA informed Navistar that it is looking into whether 7,600 engines the company built in 2009 comply with the Clean Air Act. The company could face fines of up to $37,500 for each violation, which means it could end up paying as much as $285 million in fines.

The EPA is investigating Navistar’s transition engines, which were partially built in 2009 as the company was preparing to launch a new line of engines and then completed in 2010. The agency says the company may have violated the Clean Air Act because it didn’t follow rules related to the specific model year of the engines.

Jefferies & Co. equities analyst Stephen Volkmann told Reuters that the EPA may investigate other engine companies for suspected violations. “We believe that this partial assembly of engines has been standard industry practice for years, and that this could likely apply to any number of manufacturers," he said.

Ashley Post

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