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$7.5 Million Fine Settles Navistar Engine Emission Dispute
Navistar International Corp. has agreed to pay a $7.5 million fine to settle complaints that it misled investors about the ability of a failed diesel emission control system for its diesel trucks.
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Navistar International Corp. has agreed to pay a $7.5 million fine to settle complaints that it misled investors about the ability of a failed diesel emission control system for its diesel trucks.
The deal ends Securities and Exchange Commission charges that Navistar hid technical issues that derailed the company’s ability to meet tougher diesel emission standards in 2010. But it doesn't settle separate SEC charges that then-CEO Daniel Ustian personally misled investors and aided and abetted the company’s efforts to do the same.
Ustian championed a relatively inexpensive exhaust-gas recirculation system to enable its Class 8 trucks meet the 2010 standard, but the technology failed and was abandoned in 2012. Navistar’s competitors opted for more expensive but ultimately successful urea-based catalytic converter systems.
The fiasco forced Navistar to pay roughly $40 million in fines in exchange for being allowed to temporarily sell noncompliant diesels. The company opted in 2012 to buy compliant engines from rival Cummins Inc. until it could reengineer its diesels to use a catalytic system.
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