Un-f*ing-believable that companies are still allowed to get away with criminal behavior and pay fines like this with no admission of wrongdoing. The Securities and Exchange Commission is starting...
Un-f*ing-believable that companies are still allowed to get away with criminal behavior and pay fines like this with no admission of wrongdoing.
The Securities and Exchange Commission is starting to require admissions because they actually have power to deter other marketplace actors from the punished behavior, and de facto expose the malefactors to private litigation that's likely to result in more costs from the admitted wrong.
It's about time the DoJ showed some teeth in enforcing publicly beneficial laws.
My understanding is that in Germany, executives can be held criminally liable for these kinds of breaches. I don't know how it works or how effective it is, but it seems like it could be a better...
My understanding is that in Germany, executives can be held criminally liable for these kinds of breaches. I don't know how it works or how effective it is, but it seems like it could be a better incentive, especially if there were mandatory minimum sentences. It doesn't matter if you're rich if you're in jail.
It's always been difficult to prove that individual executives are criminally responsible for unlawful corporate behavior. Even if there's evidence in the form of a document signed by the Cummins...
It's always been difficult to prove that individual executives are criminally responsible for unlawful corporate behavior. Even if there's evidence in the form of a document signed by the Cummins CEO saying, "I hereby order you to install defeat devices in our diesel engines, just like Volkswagen did", the Department of Justice may have decided that it would be easier to get a consent decree and $1.7 billion, than to put John Q. CEO in jail. In all likelihood, any documentation or witnesses will blame some poor frontline engineer, who was just following verbal orders.
There are signs that DoJ policy is changing, but I wouldn't hold my breath for U.S. executive prosecutions outside of egregious frauds like Enron and FTX.
The article says 630,000 vehicles, then later it says "hundreds of thousands of 2013 to 2019" and "330,000 newer". Is the grand total 630,000 vehicles? Either way this ends up being a fine of...
The article says 630,000 vehicles, then later it says "hundreds of thousands of 2013 to 2019" and "330,000 newer".
Is the grand total 630,000 vehicles?
Either way this ends up being a fine of something in the realm of $2500 per engine which is definitely still in "cost of doing business" territory rather than "we should not have done this" territory.
Edit:
From the actual press release
The company allegedly installed defeat devices on 630,000 model year 2013 to 2019 RAM 2500 and 3500 pickup truck engines. The company also allegedly installed undisclosed auxiliary emission control devices on 330,000 model year 2019 to 2023 RAM 2500 and 3500 pickup truck engines.
So the actual number is closer to a million and the penalty per engine is only like $1700
$1.675 billion for violations committed across six years is a fairly insignificant amount for a company whose net revenue (after expenses) in a single quarter is $720 million. The article frames...
$1.675 billion for violations committed across six years is a fairly insignificant amount for a company whose net revenue (after expenses) in a single quarter is $720 million.
The article frames this like it’s a magnitudinous fine, which it clearly is as far as the DOJ is concerned—it’s the second-largest environmental fine they’ve ever issued. But it doesn’t seem like enough to dissuade other companies from continuing to evade regulations.
It's not nothing, their net income over that period was $11.327B so this was almost 15% of that. You can look at it another way, their stock price dropped 2.8% after the announcement which...
It's not nothing, their net income over that period was $11.327B so this was almost 15% of that. You can look at it another way, their stock price dropped 2.8% after the announcement which contrasts with the stock price of Facebook rising 2% after the $5B FTC settlement which was definitely insignificant to Facebook.
The article doesn't go into any detail about the severity since a defeat device could mean all kinds of things from a 100% kill switch to allowing small excursions under certain operating conditions. If it was an all out kill switch blatantly ignoring the law I agree it's not enough, however if it only bypasses under some low occurrence point of the operating range and only slightly out of the limit the fine could be reasonable. Just wish there was more info about how it worked.
I'm more angry they get away with no admission of wrongdoing when clearly there was. Fines alone are not enough for systematic wrongdoing.
What a paltry sum. Useless in terms of fines. Per truck sold that's a rounding error, less than what you can negotiate with your salesman to take off of the sticker price. If we want this to not...
What a paltry sum. Useless in terms of fines. Per truck sold that's a rounding error, less than what you can negotiate with your salesman to take off of the sticker price.
If we want this to not happen again you need to make those companies submit and bend the knee.
They're also in increasing amounts visible on European roads, those unnecessarily large RAM trucks, and I'm not sure if their European fleet was checked for this preinstalled.. "defect".
Wild that we didn’t spend some time coming up with prevention measures for this sort of nonsense after VW pulled it a decade ago. Same culprit (NOx) as well.
Wild that we didn’t spend some time coming up with prevention measures for this sort of nonsense after VW pulled it a decade ago. Same culprit (NOx) as well.
Un-f*ing-believable that companies are still allowed to get away with criminal behavior and pay fines like this with no admission of wrongdoing.
The Securities and Exchange Commission is starting to require admissions because they actually have power to deter other marketplace actors from the punished behavior, and de facto expose the malefactors to private litigation that's likely to result in more costs from the admitted wrong.
It's about time the DoJ showed some teeth in enforcing publicly beneficial laws.
My understanding is that in Germany, executives can be held criminally liable for these kinds of breaches. I don't know how it works or how effective it is, but it seems like it could be a better incentive, especially if there were mandatory minimum sentences. It doesn't matter if you're rich if you're in jail.
It's always been difficult to prove that individual executives are criminally responsible for unlawful corporate behavior. Even if there's evidence in the form of a document signed by the Cummins CEO saying, "I hereby order you to install defeat devices in our diesel engines, just like Volkswagen did", the Department of Justice may have decided that it would be easier to get a consent decree and $1.7 billion, than to put John Q. CEO in jail. In all likelihood, any documentation or witnesses will blame some poor frontline engineer, who was just following verbal orders.
There are signs that DoJ policy is changing, but I wouldn't hold my breath for U.S. executive prosecutions outside of egregious frauds like Enron and FTX.
The article says 630,000 vehicles, then later it says "hundreds of thousands of 2013 to 2019" and "330,000 newer".
Is the grand total 630,000 vehicles?
Either way this ends up being a fine of something in the realm of $2500 per engine which is definitely still in "cost of doing business" territory rather than "we should not have done this" territory.
Edit:
From the actual press release
So the actual number is closer to a million and the penalty per engine is only like $1700
$1.675 billion for violations committed across six years is a fairly insignificant amount for a company whose net revenue (after expenses) in a single quarter is $720 million.
The article frames this like it’s a magnitudinous fine, which it clearly is as far as the DOJ is concerned—it’s the second-largest environmental fine they’ve ever issued. But it doesn’t seem like enough to dissuade other companies from continuing to evade regulations.
It's not nothing, their net income over that period was $11.327B so this was almost 15% of that. You can look at it another way, their stock price dropped 2.8% after the announcement which contrasts with the stock price of Facebook rising 2% after the $5B FTC settlement which was definitely insignificant to Facebook.
The article doesn't go into any detail about the severity since a defeat device could mean all kinds of things from a 100% kill switch to allowing small excursions under certain operating conditions. If it was an all out kill switch blatantly ignoring the law I agree it's not enough, however if it only bypasses under some low occurrence point of the operating range and only slightly out of the limit the fine could be reasonable. Just wish there was more info about how it worked.
I'm more angry they get away with no admission of wrongdoing when clearly there was. Fines alone are not enough for systematic wrongdoing.
What a paltry sum. Useless in terms of fines. Per truck sold that's a rounding error, less than what you can negotiate with your salesman to take off of the sticker price.
If we want this to not happen again you need to make those companies submit and bend the knee.
They're also in increasing amounts visible on European roads, those unnecessarily large RAM trucks, and I'm not sure if their European fleet was checked for this preinstalled.. "defect".
Wild that we didn’t spend some time coming up with prevention measures for this sort of nonsense after VW pulled it a decade ago. Same culprit (NOx) as well.