Harley Davidson settles EPA probe with $12 million fine

The after-market sale of “super tuners” which boosted power and performance at the cost of increased pollution was the primary reason why the EPA went after Harley Davidson. The fine is however a slap in the wrist compared to the fine imposed on Volkswagen.

The U.S. Justice Department has reported that Harley-Davidson Inc. has agreed to pay $12 million in civil fine and will stop selling illegal after-market devices that causes its motorcycles to cause pollution in excess of permissible limits.

This settlement resolves earlier allegations that stated the enigmatic motorcycle company sold 340,000 “super tuners” since 2008 which caused higher levels of pollutions that the levels the company certified to the U.S. Environmental Protection Agency.

Significantly, Harley Davidson did not admit the liability. It said it disagreed with the government’s position and has argued that the devices in questions were designed and sold to be used in “competition only.”

It went on to say that the settlement represents only “a good faith compromise with the EPA on areas of law we interpret differently, particularly EPA’s assertion that it is illegal for anyone to modify a certified vehicle even if it will be used solely for off-road/closed-course competition.”

A spokesman for EPA said the vast majority of these tuners were used on public roads.

According to the government, the sale of such “defeat devices” violates the federal Clean Air Act. Furthermore, the company had also been accused of selling more than 12,600 motorcycles which weren’t covered by an EPA certification governing clean air compliance.

Harley will now have to stop selling these super tuners by August 23. It will also have to buyback and destroy all such tuners in its stock at its dealerships.

According to the EPA, the modifications increased power and performance at the cost of increased emissions of nitrogen oxides and hydrocarbons.

Furthermore, Harley will also have to deny warranty claims, if owners continue to use these devices.

An EPA’s spokesman has clarified that the company’s dealers are not part of this action, however, “if they are tampering or selling defeat devices on their own, then they could be investigated independently in the future.”

The Justice Department has also clarified that Harley will also have to spend $3 million on an unrelated project to reduce air pollution.

“Given Harley-Davidson’s prominence in the industry, this is a very significant step toward our goal of stopping the sale of illegal after-market defeat devices that cause harmful pollution on our roads and in our communities,” said John Cruden, head of the Justice Department’s environmental and natural resources division, in a statement.

The settlement comes midst greater scrutiny on emissions by vehicles using “defeat devices” after Volkswagen AG ‘s admitted that it used illegal software to evade U.S. emissions standards in nearly 600,000 U.S. vehicles.

“This settlement immediately stops the sale of illegal after-market defeat devices used on public roads that threaten the air we breathe,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

Henceforth, Harley will have to obtain a certificate from the California Air Resources Board for any tuners it sells in the United States. As for the super tuner it sells outside of the U.S., they must be labelled as not for use in the United States.



Categories: HR & Organization, Regulations & Legal, Strategy

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