Navistar International Corp. faces civil lawsuits over alleged problems with its MaxxForce diesel engines, which used a controversial method to scrub exhaust pollutants.
Lisle, Ill.-based Navistar spent more than $700 million to develop exhaust-gas recirculation (EGR) technology for its 2010 and later engines. After the company was not able to certify the engines to meet pollution limits set by the U.S. Environmental Protection Agency, Navistar cancelled, in 2012, its EGR-only strategy and, last year, began adding to its engines Cummins' selective-catalytic reduction (SCR) aftertreatment. EGR systems treat pollutants inside the combustion chamber; SCR systems treat pollutants in the tailpipe. Both technologies aim to cut nitrogen oxides (NOx), harmful gases linked to smog and health problems.
On behalf of three trucking firms, Dallas-based personal-injury law firm Miller Weisbrod LLP on July 8 filed suits in Hildago County Court, Texas, claiming "fraud and conspiracy" against Navistar and San Antonio-based dealer Santex Truck Centers. Navistar hid defective problems in its MaxxForce ProStar truck line, which was "woefully inadequate for public distribution," the plaintiffs allege.
Americorp Xpress Carriers LLC purchased 15 Navistar-branded trucks and engines between 2010 and 2011 that, over two years, resulted in 100 separate warranty repairs, including EGR, engine, fuel-pump, hose and compressor failures. The Pharr, Texas-based trucking company joins FirstExpress Inc., Nashville, Tenn., and Floyd Blinsky Trucking Inc., Yakima, Wash., as plaintiffs seeking unspecified damages for downtime, lost revenue, out-of-pocket repairs, towing bills and diminished resale value.
"We believe that engineers inside [Navistar] were warning management of the risks of raising the engine heat and that the EGR-only strategy would not meet the EPA requirements for NOx emissions," says Clay Miller, a Miller Weisbrod partner. "The problems with the MaxxForce engine are pervasive throughout the trucking industry." Navistar built noncompliant engines using EPA credits it earned from earlier engines that had exceeded emissions standards.
Navistar, which booked a $297 million net loss on $2.7 billion of second-quarter revenue, declined to comment on the suits. "As a matter of company policy, we don't comment on pending litigation," said Elissa Maurer, Navistar spokeswoman, in an email. Navistar "is working hard to appease everyone who bought an EGR engine with problems," notes Ted Grace, a senior analyst at Susquehanna International Group, Boston.
Similarly, Caterpillar Inc. faces at least 15 civil lawsuits over its 2007-2010 on-road diesel engines, which allegedly experienced costly breakdowns of emissions-control systems. Plaintiffs argue that Peoria, Ill.-based Caterpillar knowingly concealed defects from buyers, an allegation the company denies.
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