CAT to Pay for EPA Penalties

Lynn Schenkman

Chicago -- Peoria, Ill.-based Caterpillar Inc. (CAT) will pay a $37 million after-tax charge partially because some engines did not meet new pollution guidelines established by the Environmental Protection Agency (EPA), according to news sources. The company also will earmark $102 million for additional production costs to ensure new engines meet the requirements. CAT began shipping low-emission engines in October 2002 and is introducing fully compliant engines this year. The company told news sources it doesn’t anticipate paying any further penalties beyond 2003.