Court Upholds EPA Engine Plan; Caterpillar Unveils Layoffs
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.
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 Friday 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 announced cuts, including Navistar International and Paccar’s Peterbilt and Kenworth units.
Freightliner officials have said they expect to avoid fourth-quarter layoffs but were concerned about the risks for first-quarter 2003. Volvo Trucks North America expects to avoid job cuts, because it had already reshuffled its workforce for a new-model truck launch that anticipated a slow production buildup this fall.
Opponents of the Oct. 1 deadline –- including dozens in Congress led by House Speaker Dennis Hastert (R-Ill.) -- 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.
But the Office of Management and Budget agreed to back the EPA rules after a recent review, leaving opponents fast running out of time and hoping that either the court would halt the deadline or that lawmakers might yet find a way to set it aside in legislation later this month.
The EPA’s Oct. 1 deadline stemmed from its earlier plans to impose tougher emission standards in 2004. But in the 1990s it also alleged that many engine makers were using devices that turned off emission controls in violation of standards at that time. In 1998 the agency and most manufacturers settled that issue by signing a consent decree that among other things moved their deadline to this year.
Daimler’s Mercedes unit was not part of that agreement and has an engine that does not have to meet the more stringent emission rules this year, so Detroit Diesel and Freightliner have begun are offering it in the U.S. as an option to some long-haul trucking operations as well as its main target customer group of vocational trucking applications.
Some trucking companies have been testing it, but officials at Schneider National – the nation’s largest truckload carrier – recently told Transport Topics they did not feel the Mercedes engine met their needs.
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