Court Upholds EPA Engine Plan; Caterpillar Unveils Layoffs
September 12, 2002
• by Staff
On Sept. 6, a federal court rejected a bid by two makers of heavy-duty truck engines to overturn a key part of the Environmental Protection Agency’s plan to require lower-emission engines in new trucks as of Oct. 1. Engine maker Caterpillar Inc. announced its first layoffs related to that issue on the same day.
The court upheld steep penalties that EPA has said it could levy against any engine producers failing to meet the Oct. 1 deadline, the Associated Press reported, a plan contested in court by both Caterpillar and Detroit Diesel. As truck equipment producers face sharply falling orders from truck buyers wary of the new-model engines, the court’s ruling leaves opponents of the EPA plan hoping for a last-minute reprieve from lawmakers in Congress.
Caterpillar has said it would not have an engine this year that fully meets the EPA’s new emission standards, and therefore would be subject to penalties on any new-model "bridging" engines it produces.
Detroit Diesel, whose parent company DaimlerChrysler also owns truck builder Freightliner, recently submitted for EPA certification an engine it says would comply with the tougher Oct. 1 standards, and is awaiting approval. Cummins Inc. and Mack have received EPA certification for engines they will offer to meet the Oct. 1 rules. Detroit Diesel had already said it would have to lay off some workers because of falling demand for new truck engines.
Bloomberg News reported that Caterpillar on Sept. 6 said it would lay off about 470 fulltime workers and cut another 290 temporary jobs at two Illinois plants making heavy-duty engines, and said more cuts may be needed in the fourth quarter. Some heavy-duty truck makers have also an-nounced cuts, including Navistar International and Paccar’s Peterbilt and Kenworth units. Freight-liner officials have said they expect to avoid fourth-quarter layoffs but were concerned about the risks for first-quarter 2003.
Opponents of the Oct. 1 deadline, including dozens in Congress led by House Speaker Dennis Hastert, had lobbied the Bush administration to overturn EPA’s fine schedule. They warned that widespread layoffs were likely this fall, since trucking firms had heavily bought used trucks and pre-Oct. 1 new trucks, and were not placing many orders for the new-technology engines that fleets had not been able to thoroughly test. The EPA’s Oct. 1 deadline stemmed from its earlier plans to impose tougher emission standards in 2004.
Originally posted on Fleet Financials