Some of the engines have already been fixed, Cat adds.

"The recalls involved in this settlement were executed some years ago," a Cat spokesperson told ENR today via e-mail. "Several of them have already been completed. The recalls that will be reopened to meet the requirements of the agreement will be opened through our normal service letter communication process."

The settlement may smudge Caterpillar's public image as it continues to promote its environmental stewardship. The company recently won an EPA award for building a fuel-efficient, hybrid bulldozer, and its new CEO, Doug Oberhelman, ">is an outspoken environmentalist.

On July 22, Caterpillar released its second-quarter earnings, in which ">it missed investors' expectations but still showed sales increases of 37% over the same period last year.

In that report, it noted booking a profit of $1 billion on sales of $14.2 billion, not including the acquisition of Bucyrus. Cat also increased its annual sales outlook, expecting $54 to $56 billion from a previous $52 to $54 billion.

This article was updated on 8/3.