Ford avoids messy problem as Cummins agrees to pay $1.67 billion in emission fines

[jpd80]

Quote

Engine maker Cummins agrees to pay $1.67 billion to settle claims it bypassed emissions tests

NEW YORK (AP) — Cummins Inc. has agreed to pay an over $1.67 billion penalty to settle claims by regulators that the engine manufacturer unlawfully altered hundreds of thousands of pickup truck engines to bypass emissions tests.

According to the U.S. Justice Department, which announced the agreement in principle Thursday, Cummins' alleged actions violated the Clear Air Act — a federal law that requires car and engine manufacturers to comply with emission limits.

The $1.675 billion fine would be the largest civil penalty the Justice Department has secured under the Clear Air Act to date and second largest environmental penalty ever secured.

The Justice Department accuses Cummins of installing defeat devices — which can bypass or defeat emissions controls — on 630,000 2013-2019 Ram 2500 and 3500 pickup truck engines, as well as undisclosed auxiliary emission control devices on 330,000 2019-2023 Ram 2500 and 3500 pickup truck engines.

“The types of devices we allege that Cummins installed in its engines to cheat federal environmental laws have a significant and harmful impact on people’s health and safety," Attorney General Merrick B. Garland said in a prepared statement. “Our preliminary estimates suggest that defeat devices on some Cummins engines have caused them to produce thousands of tons of excess emissions of nitrogen oxides."

Story continues at link.      https://www.msn.com/en-us/money/companies/engine-maker-cummins-agrees-to-pay-1-67-billion-to-settle-claims-it-bypassed-emissions-tests/ar-AA1lUlwW?ocid=entnewsntp&cvid=f61f86112bc446b38537e1c88e8d4f15&ei=40
 

 

I understand that Cummins is an industry standard in engine supply but now faces a hefty payout.

So glad that Ford avoided this by not having as an engine option like Ram…

 

So what happens to all of those trucks, does Ram have to do anything to make good on emission requirements or is this done and finished?

 

 

Edited December 23, 2023 by jpd80

[Rick73]

3 hours ago, jpd80 said:

So what happens to all of those trucks, does Ram have to do anything to make good on emission requirements or is this done and finished?

Based on article, it appears to me that the $1.67 billion must not include all costs, considering the planned $2.4 charge in 2023’s fourth quarter.

 

“Cummins said it previously accrued $59 million in estimated costs for these and other related recalls. The company expects an additional charge of about $2.4 billion in 2023's fourth quarter “to resolve these and other related matters involving approximately one million pick-up truck applications in the United States.””

 

Diesels no doubt face an uphill battle.  With gasoline fuel so much cheaper, it’s difficult to see justification for them other than those driving extreme distances annually.

[SoonerLS]

17 hours ago, jpd80 said:

So what happens to all of those trucks, does Ram have to do anything to make good on emission requirements or is this done and finished?

Looking at what happened to VW as a result of their similar scandal, it's likely that Stellantis/Ram will be having to deal with fixing the trucks. I'd imagine that they will at least try to charge most (if not all) of that back to Cummins instead of having to eat all of the costs like VW.

[silvrsvt]

13 hours ago, Rick73 said:

Diesels no doubt face an uphill battle.  With gasoline fuel so much cheaper, it’s difficult to see justification for them other than those driving extreme distances annually.

 

In light duty applications, yes, but there is still a market for heavy duty applications like military vehicles or generators. 

[SoonerLS]

10 minutes ago, silvrsvt said:

 

In light duty applications, yes, but there is still a market for heavy duty applications like military vehicles or generators. 

And agriculture--I don't know if anyone is even making gasoline-powered tractors these days, not even in the compact or utility tractor lines. There's just no comparison between the burn rates of diesel and gasser tractors while they're working. 

[Rick73]

4 hours ago, SoonerLS said:

And agriculture--I don't know if anyone is even making gasoline-powered tractors these days, not even in the compact or utility tractor lines. There's just no comparison between the burn rates of diesel and gasser tractors while they're working. 

Never seen a large gasoline tractor in person.   All tractors and all stationary engines (with exception of one propane unit) where I worked part time in summer while in college were diesel.  There were probably over 100 engines total.  Back then diesels were very simple and had no emissions equipment at all (not defending, just stating facts) and ran forever with minimal attention; just oil and filter changes.

 

Between low farm fuel costs and lower fuel consumption, diesel engines made a lot of sense back then.  However, more recently I’ve seen diesel fuel advertised as much as 50% higher per gallon than regular gasoline, plus initial diesel powertrain costs are much higher, as is maintenance.  At what point do alternate fuels like natural gas or possibly even gasoline become cost effective?  I believe Cummins and others are working on natural gas, but I’m not aware of any efforts towards developing super-heavy-duty gasoline engines with up to +/- 500 HP for large trucks, semis, tractors, etc.

 

From a regulatory standpoint, I wonder how much larger Ford could go beyond 7.3L gasoline V8 displacement if trying to offer greater diesel alternative?  I expect Ford must have concerns over diesel’s future.

 

 

Regarding military applications, above comment reminded me of Ford’s GAA 1,100 cubic-inch (18L) V8 developed by truncating 27L V12; hence why the 60-degree V angle.  The +/- 500 HP V8s were used in military tanks, though I’ve read engine was developed mostly for industrial applications.  At rated power must have been a real gas guzzler.  An educated estimate would put it at around 40 gallons per hour.

[SoonerLS]

6 hours ago, Rick73 said:

However, more recently I’ve seen diesel fuel advertised as much as 50% higher per gallon than regular gasoline

Farmers aren’t using regular diesel, they’re using “off-road” diesel, which has no taxes applied, so it’s $0.30 or more cheaper than the diesel you buy at the “regular” diesel pump. (It’s also dyed red, so if the revenuers put their stick in your diesel truck’s tank and it comes out red, you’re in deep doo-doo.)

 

 Personally, I don’t see much future for gaseous engines in ag. We went down that road with propane from the ‘50s to ‘80s, and diesel curb-stomped all the other fuel types. 

[7Mary3]

Expect to see more of these kinds of stories, investigations are ongoing.....

 

BTW, Ford will not be offering diesel powered F-650 and 750 trucks in California after the first of the year, they are no longer CARB compliant.  It's an interesting situation, from what I gather the 7.3L Powerstroke does not meet 2025 CARB diesel standards, so as the 650 and 750 will be 2025MY next year (2024) they cannot be sold in California.  It sounds like F-250's through F-600's will still be 'CARB legal' next year because those trucks are 2024MY.  It will be interesting to see what Ford does in 2025, not being about to sell diesel 650's and 750's is not a big deal but if they can't get the Powerstroke to comply for the other trucks that's going to hurt.     

[Rick73]

7 hours ago, 7Mary3 said:

It will be interesting to see what Ford does in 2025, not being about to sell diesel 650's and 750's is not a big deal but if they can't get the Powerstroke to comply for the other trucks that's going to hurt.     

 

RAM already has issues with Cummins diesel, so who will benefit most if Ford PowerStroke can’t meet emission requirements in 2025?  Doesn’t that essentially leave GM Duramax, and how much cleaner than Cummins or Ford can they be?  Shouldn’t we expect they will have similar difficulties?

 

Seems to me path of least resistance may be to switch buyers to gasoline engines, particularly if all three are in same predicament and no one has competitive advantage.

[GearheadGrrrl]

For Ford, it's a nice excuse to put the F650/750s out of their misery and screw the dealers who spent millions to build "Ford Pro Truck Centers" with 14 foot tall doors.

 

CARB thinks they have a clever back door way to force electrification, but the cost of a Class 6-8 EV if you can get one is so high that only a few image conscious fleets will buy a few to parade around. Gas options are limited as many manufacturers don't even offer gas engines. So most likely we're going to see increasing numbers of trucks with out of state plates living in California, NEE (Florida Power and Light) is already running trucks all over the country on Indiana plates, so not hard to do...

[7Mary3]

3 hours ago, Rick73 said:

 

RAM already has issues with Cummins diesel, so who will benefit most if Ford PowerStroke can’t meet emission requirements in 2025?  Doesn’t that essentially leave GM Duramax, and how much cleaner than Cummins or Ford can they be?  Shouldn’t we expect they will have similar difficulties?

 

Seems to me path of least resistance may be to switch buyers to gasoline engines, particularly if all three are in same predicament and no one has competitive advantage.

 

I don't think the Duramax is any better, it's just the 2025 CARB diesel standards are going to be difficult and expensive to meet.  I believe that for the most part what is coming in 2025 in California will be similar to the 2027 EPA standard.  

Edited December 24, 2023 by 7Mary3

[Rick73]

Diesel is no doubt a large and important part of HD pickup market, and buyers should continue to have engine choices, including diesel if at all possible.  However, having to eliminate diesel engines in pickup trucks doesn’t seem that big a burden, if it comes to that, provided it affects all manufacturers more or less equally.  I recall when F-Series trucks (larger than pickups) in my area were essentially all gasoline with engines ranging from 240 to 534 cubic inches.  Many old F-600 (pre F-650), for example, purchased to deliver furniture in town or work hard on the farm had 300 cubic inch six cylinder barely able to make more than 100 HP (by present net rating).  Back then they would have killed for the 350 HP from modern Godzilla 7.3L V8.  Perhaps offering different size gasoline engines again (meeting current-day power expectations) could help wean buyers off diesel; not that 350 HP won’t get the job done 99% of the time.  Another possible replacement for diesel may be to augment 7.3L gasoline V8 with lots of electric HP and torque through hybrid electrification in order to match diesel economy and towing capabilities.

[jpd80]

Continuing the 2024 SD next year would suggest that Ford is stalling for time to either

end all of its YM25 Powerstroke sales in California or do an upgrade across the board…

 

The other thought is that diesel sales are a low percentage of F-650 & F-750 sales

and California would be an even smaller subset of that number.

We’re probably talking about lost sales in the low hundreds per month

Edited December 25, 2023 by jpd80

[SoonerLS]

 

[Rick73]

On 12/25/2023 at 3:07 AM, SoonerLS said:

 

 

Not sure Lehto’s implied logic that settlement cost to serve as deterrence (punishment) should be harsher is wise just because it won’t affect Cummins’ bottom line enough to discourage similar future violations.  That kind of logic is a slippery slope.

 

The settlement cost averages about $1,700 per engine, which may or may not exceed the profit Cummins made from manufacturing and selling those 990,000 engines; but to consider how $1.67 billion will affect Cummins total earnings and or stock value is a completely different matter.  Cummins is a huge cooperation with product lines that extend far beyond the 6.7L diesel involved in infraction, and do business in many countries outside the US, where settlement doesn’t apply, so harsher punishment to hurt company owners (stock holders) more as a deterrent just because $1.67 billion may be easy for Cummins to pay seems wrong to me.  Punishment should be proportional to infraction, not depth of offender’s pockets.

 

I don’t own Cummins stock directly so my opinion above has nothing to do with personal gain or loss.  I just think we have to be careful that ultimately we don’t do more harm than good with punishment that’s too severe.

[Deanh]

Somewhat adds creedence to Ford testing HD pickups with Hydrogen powerplants...they may/ may not eventuate, but seems they read the writing on the wall and got pro active. I asked a Ford Rep why they ( Ford ) had never ventured down the hybrid drivetrain scenario...his answer was they were exempt and the screws hadnt been tightened on the Higher GVW trucks yet, but stated Ford WAS in fact preparing for that eventuality. 

[Rick73]

1 hour ago, Deanh said:

Somewhat adds creedence to Ford testing HD pickups with Hydrogen powerplants...they may/ may not eventuate, but seems they read the writing on the wall and got pro active. I asked a Ford Rep why they ( Ford ) had never ventured down the hybrid drivetrain scenario...his answer was they were exempt and the screws hadnt been tightened on the Higher GVW trucks yet, but stated Ford WAS in fact preparing for that eventuality. 

There is probably a much greater chance of seeing a hybrid Super Duty in production before a hydrogen one IMO.  A hybrid F-350 for example could replace a diesel with little disruption to owner, whereas a hydrogen F-350 would have many of the same problems a BEV F-350 would have; mostly higher cost and more difficult fueling.  A hybrid SD could be comparable to diesel in initial cost and on fuel when driven empty or lightly loaded.  I expect that it’s only when working hard towing that a SD diesel would be more economical to fuel than a gas hybrid, assuming of course fuel economy is not a design afterthought.   There are various large commercial trucks starting to offer hybrid powertrains so technology should not be the limiting factor.

 

 

[Joe771476]

What the truck mfrs. should do is just pullout of California and not sell any trucks there. Then you'd see a change in Gov. Nuisance's tone!  That's not a typo!!!!!

[GearheadGrrrl]

1 hour ago, Joe771476 said:

What the truck mfrs. should do is just pullout of California and not sell any trucks there. Then you'd see a change in Gov. Nuisance's tone!  That's not a typo!!!!!

And provide a beachhead for the Chinese...?

[SoonerLS]

On 12/26/2023 at 7:20 AM, Rick73 said:

Punishment should be proportional to infraction, not depth of offender’s pockets.

I don't think his point is to match the fine to the depth of the pockets, it's just to make sure the fine is more than the profit they realized from the cheating. That doesn't mean that you take it as a percentage of the over-all business's profits, just the profits on that program--it's possible, and even likely, that the fine could make that particular engine program a money loser without affecting the position of Cummins as a whole.