Navistar International agreed to settle a number of class action lawsuits pending in the U.S. District Court for the Northern District of Illinois, setting up a $135-million fund to pay claims, contributing $85 million in cash, and coming to make rebates worth $50 million. The commitment by the truck and engine manufacturer will release its affiliates from all claims and potential claims, except claims for personal injury or damage to third-party property.
At issue in the cases against Navistar is the claim that the company and certain of its representatives falsely represented the effectiveness of its now discontinued EGR (“exhaust gas recirculation”) technology for treating NOx emissions – in line with the U.S. EPA’s 2010 emissions standard.
Navistar developed the EGR process but it never gained the Environmental Protection Agency’s certification for compliance with its expanding emissions standards. Navistar endured significant losses in its attempts to perfect the technology before relinquishing those efforts in mid-2012.
Since 2012, Navistar Class 8 engines have adopted the selective catalytic reduction (SCR) technology used by other diesel engine manufacturers to comply with the EPA 2010 emissions requirements.
A Navistar spokeswoman indicated the company will take a $159-million charge in the second quarter to address current-period liabilities and future potential settlements of certain litigation related to Model Year 2011-2014 Class 8 trucks sold in the U.S. with the company’s 11L and 13L EGR-only engines, including U.S. class action lawsuits.
