Harley-Davidson has agreed to pay a multimillion-dollar fine and fund environmental remediation efforts after allegedly selling aftermarket devices that allowed motorcyclists to cheat U.S. emissions standards.
The Milwaukee-based manufacturer will pay a $12 million civil penalty and $3 million toward environmental efforts in a deal with the Environmental Protection Agency after the agency accused the company of selling about 340,000 "super tuners" that bolstered power but also raised harmful emissions.
The company agreed to offer to buy back all of the devices, cease selling the tuners and destroy them.
Harley-Davidson shares (HOG) dove more than 7% after the news was released but quickly recovered and were down only 2% to $53.38 by noon.
"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, head of the Justice Department’s Environment and Natural Resources Division, in a statement.
"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."
Harley said it sought to settle the matter quickly rather than engage in a drawn-out fight.
“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,” said Ed Moreland, Harley-Davidson’s government affairs director, in a statement.
"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 U.S."
The super tuners allegedly violate U.S. regulators' prohibition on "defeat devices," which enable vehicles to spurn emissions standards. German automaker Volkswagen Group violated those same standards by installing software on 11 million diesel vehicles worldwide. Harley's case involved aftermarket parts on a much smaller scale.
Harley also sold more than 12,000 motorcycles without EPA pollution certification in model years 2006 through 2008, according to the agency. It must ensure that all future bikes will have secured the necessary EPA approvals.
To rectify air pollution caused by the super tuners, Harley must partner with an independent company to provide cleaner-burning stoves to certain communities to replace conventional woodstoves.
The Milwaukee-based manufacturer will pay a $12 million civil penalty and $3 million toward environmental efforts in a deal with the Environmental Protection Agency after the agency accused the company of selling about 340,000 "super tuners" that bolstered power but also raised harmful emissions.
The company agreed to offer to buy back all of the devices, cease selling the tuners and destroy them.
Harley-Davidson shares (HOG) dove more than 7% after the news was released but quickly recovered and were down only 2% to $53.38 by noon.
"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, head of the Justice Department’s Environment and Natural Resources Division, in a statement.
"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."
Harley said it sought to settle the matter quickly rather than engage in a drawn-out fight.
“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,” said Ed Moreland, Harley-Davidson’s government affairs director, in a statement.
"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 U.S."
The super tuners allegedly violate U.S. regulators' prohibition on "defeat devices," which enable vehicles to spurn emissions standards. German automaker Volkswagen Group violated those same standards by installing software on 11 million diesel vehicles worldwide. Harley's case involved aftermarket parts on a much smaller scale.
Harley also sold more than 12,000 motorcycles without EPA pollution certification in model years 2006 through 2008, according to the agency. It must ensure that all future bikes will have secured the necessary EPA approvals.
To rectify air pollution caused by the super tuners, Harley must partner with an independent company to provide cleaner-burning stoves to certain communities to replace conventional woodstoves.
