Journal Star

April 10, 2002

Caterpillar, facing deadline, urges delay for cleaner diesel engines emission standards

Copley News Service

WASHINGTON, D.C.  Caterpillar Inc. is urging its customers to lobby Congress to delay an October deadline for producing new cleaner-burning diesel engines - even though the company had agreed to the deadline in a 1998 legal settlement with the federal government.

Caterpillar won't be able to produce an engine that complies with the new emissions standards until next year and is expected to face millions of dollars in penalties as a result.

However, one of its competitors, Cummins Engine Co., already has received government approval for a diesel engine that meets the clean air requirements. Mack Trucks Inc. has applied
for certification and Detroit Diesel Corp. has said it plans to meet the October deadline.

In a March 27 letter, a Caterpillar vice president urged its truck engine customers to lobby Congress and the Environmental Protection Agency for a one-year delay in the October deadline.

Its competitors' engines are unproven and costly and not as environmentally friendly as the new technology that Caterpillar will make available next year, stated the letter signed by James
J. Parker, vice president of Caterpillar's engine division.

He warned that the cost increase "could have a chilling effect" on the trucking industry and the economy as a whole.
Environmentalists blasted Caterpillar's lobbying efforts.

"It is outrageous that Caterpillar would use such vile scare tactics on its customers just because it failed to produce a clean technology in a timely manner," said Frank O'Donnell, executive
director of the nonprofit Clean Air Trust, who released the Caterpillar documents.

"This Caterpillar lobbying blitz appears designed to avoid having to pay stiff fines," O'Donnell said. "Caterpillar should not be rewarded for its failure."

An EPA spokeswoman said only Congress or the court could change the 1998 consent decree. "I believe it's not really EPA's decision alone," said EPA spokeswoman Cathy Milbourn.

The EPA shocked engine makers in January by proposing fines of up to $14,000 for every non-complying engine sold after the Oct. 1 deadline.

If finalized, Caterpillar could be forced to pay millions.
Caterpillar spokesman Carl Volz said that's three to five times higher than penalties assumed in the 1998 settlement.

In that $1 billion civil settlement, the federal government charged Caterpillar and six other diesel engine manufacturers with cheating to get their engines to pass federal emissions tests.

Federal officials charged that the companies sold engines programmed to stay within legal limits during emission tests while producing illegal levels of smog-producing pollutants on the open road.

Under the settlement, the companies did not admit wrongdoing. But they paid hefty penalties and agreed to move up the deadline for lower emissions standards from January 2004 to October of this year.

Volz said Caterpillar isn't reneging on the legal agreement.
"In fact, we are pursuing the most responsible path in the industry," Volz said.

Instead of "cobbling together" an engine justto meet the October deadline as competitorsare doing, Caterpillar is pushing ahead with itsnew advanced combustion emissions reduction
technology, or ACERT, that will put it in a better position than competitors to meet futureClean Air Act deadlines, Volz said