Hino Motors Agrees to $1.6 Billion Settlement for Emission Violations

Hino Motors Enters Major Settlement for Diesel Emission Issues

Hino Motors, a division of Toyota Motor, has recently come to a significant settlement agreement, amounting to $1.6 billion, with various U.S. agencies regarding excess diesel emissions from their vehicles. This commitment follows allegations that Hino engaged in fraudulent activities in connection with emissions from more than 105,000 heavy-duty diesel engines sold in the U.S. market.

Legal Charges and Settlement Breakdown

The company faced serious charges in U.S. District Court accusing it of unlawfully selling diesel engines that failed to meet established emissions standards from 2010 to 2022. As part of the settlement, Hino will pay a criminal penalty of approximately $521.76 million, alongside $442.5 million in civil fines, primarily directed to U.S. authorities. Moreover, $236.5 million of the settlement is earmarked specifically for California.

Impacts on Hino Motors and Corporate Culture

In 2022, an investigation revealed that Hino had falsified emissions data on certain engines as far back as 2003. The company has now agreed to a guilty plea for engaging in a multi-year scheme that misled regulators. Additionally, Hino will face a five-year probation period during which it will not be permitted to import diesel engines it produced into the U.S. Furthermore, Hino is tasked with implementing a robust compliance and ethics program as stipulated by the U.S. Department of Justice and the Environmental Protection Agency (EPA).

Environmental Responsibility and Compliance

Assistant Attorney General Todd Kim expressed concern over Hino’s actions, pointing out that the company repeatedly falsified data to avoid regulation, leading to considerable air pollution. This behavior represents a significant breach of environmental, consumer protection, and import laws within the United States.

Mitigation and Recall Programs

The settlement includes a mitigation program valued at $155 million aimed at offsetting excess emissions through the replacement of marine and locomotive engines, plus an additional recall program valued at $144.2 million, specifically designed to rectify issues with engines used in 2017-2019 heavy-duty trucks.

Admission of Fault and Future Steps

Hino admitted to submitting false certification applications and manipulating test data from 2010 to 2019. In light of this, Hino's president, Satoshi Ogiso, emphasized the company's commitment to improving its internal processes regarding culture, oversight, and compliance practices. He stated this resolution marks a crucial step in resolving previously problematic issues, assuring stakeholders that such behaviors are no longer characteristic of Hino’s operations.

Investigations and Findings

The California Air Resources Board launched an investigation in 2019 after identifying discrepancies in Hino's emissions data during the certification review process. California Attorney General Rob Bonta commented that Hino took unlawful advantage of state incentives meant to promote the adoption of clean transport technologies designed to protect public health.

Financial Impact of the Settlement

As part of this settlement, Hino has accounted for an extraordinary loss of approximately 230 billion yen (roughly $1.54 billion) in its financial results for the second quarter. This loss covers the anticipated costs associated with resolving this litigation. This recent case highlights a broader trend where numerous automotive manufacturers have faced scrutiny for diesel emissions, especially following Volkswagen's admissions of similar misconduct that led to over $20 billion in penalties worldwide.

Frequently Asked Questions

What led to Hino Motors' settlement?

Hino Motors' settlement emerged from allegations of selling diesel engines that failed to comply with U.S. emissions standards, prompting legal actions and substantial financial penalties.

How much is Hino Motors required to pay?

The company has agreed to a total settlement of $1.6 billion, which includes criminal penalties, civil fines, and funds directed to California.

What changes will Hino Motors implement following the settlement?

Hino Motors is expected to enhance its compliance and ethics programs and improve overall corporate governance to prevent future violations.

How will the settlement affect Hino's operations in the U.S.?

During a five-year probation period, Hino will be restricted from importing any of its diesel engines into the U.S., impacting its operational capabilities in the market.

What has been the reaction from U.S. authorities?

Authorities have expressed significant concern over Hino's actions, emphasizing that they have breached both environmental laws and consumer protection regulations.

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