Cummins to pay record $1.675B civil penalty in vehicle test cheating settlement (NYSE:CMI)

Cummins (NYSE:CMI) agreed to pay a combined $2B in fines and remedies to settle a lawsuit filed by the U.S. Department of Justice and the state of California that charged the company with installing devices meant to cheat emissions controls, the DoJ announced Wednesday.

Under the proposed settlement, Cummins (CMI) agreed to pay a $1.675B in civil penalty – the largest ever assessed in a Clean Air Act violation – and spend more than $325M to remedy the violations related to the software “defeat devices” that circumvented emissions testing and certifications requirements.

Cummins (CMI) also must “complete a nationwide vehicle recall to repair and replace the engine control software in hundreds of thousands of RAM 2500 and RAM 3500 pickup trucks equipped with the company’s diesel engines,” the DoJ said.

The deal also will require the company to “extend the warranty period for certain parts in the repaired vehicles, fund and perform projects to mitigate excess ozone-creating nitrogen oxides emitted from the vehicles and employ new internal procedures designed to prevent future emissions cheating.”