Harley-Davidson has been fined a staggering $12 million by the U.S. Environmental Protection Agency (EPA) for violating emission standards. The legendary motorcycle company settled with the agency on Thursday, whereby it will not only pay the $12 million civil penalty but also an additional $3 million on an unrelated environmental project.
Harley was accused of selling some 340,000 "super tuners" that breached the emission standards. The Milwaukee-based manufacturer will no longer sell the felonious tuners and will have to buy back the existing ones and destroy them. The tuners, meant to increase power and performance, were pre-installed on more than 12,000 motorcycles of various models between 2006 and 2008. Harley-Davidson itself manufactured such racing tuners, which went by the name Screamin' Eagle Pro Super Tuners.
The agency labeled them "defeat devices" that apparently could defraud the emission control system of a motorcycle, thus releasing higher levels of toxic gases, such as hydrocarbons and nitrogen oxide, than were permitted. Harley's settlement will mean that all of its subsequent motorcycles will convincingly meet the set air-quality standards to be fully certified by the EPA.
The U.S. agency released an explanation last year of the federal regulations relating to vehicle-modifications. Apparently, the explanation was not clear enough.
"For more than two decades, we have sold this product under an accepted regulatory approach that permitted the sale of competition-only parts. In our view, it is and was legal to use in race conditions in the US," said Ed Moreland, the government-affairs director of Harley-Davidson, in a press release on Thursday.
"This settlement is not an admission of liability but instead represents 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," he added.
Disputes between the EPA and motor companies are common. When the aforementioned federal regulations were released last year, it was met with sharp criticism from the car-modifying and amateur racing communities, Ars Technica reports. And in another recent high-profile example, motoring giant Volkswagen was the casualty of tightened EPA regulations. The car-maker was found guilty of selling hundreds of thousands of cars and SUVs that used illegal software to circumvent American emission standards.
The United States Department of Justice issued a statement on Thursday, claiming that the Harley lawsuit sets an example to other manufacturers regarding what is illegal and why.
"Given Harley-Davidson's prominence in the industry, this is a very significant step toward our goal of stopping the sale of illegal aftermarket defeat devices that cause harmful pollution on our roads and in our communities," said Assistant Attorney General John C. Cruden. "Anyone else who manufactures, sells, or installs these types of illegal products should take heed of Harley-Davidson's corrective actions and immediately stop violating the law."
And the bike-maker giant was swift to resolve the case.
"By settling this matter, we can focus our future attention and resources on product innovation rather than a prolonged legal battle with the EPA," were the words of Moreland.
As the news that Harley-Davidson was fined came out, its shares (HOG) plummeted by more than 7 percent, reports USA Today. By noon though, it had recovered and was down by only 2 percent to $53.38.
Meanwhile, the $3 million, which the company will have to spend on a separate project, is aimed at replacing "conventional woodstoves with cleaner-burning stoves in local communities."
The EPA realized Harley-Davidson was culpable of wrongdoing regarding emissions when it read the information submitted by the company. The result: Harley was fined a whopping $12 million.
[Photo by Ian Gavan/Getty Images]