Harley-Davidson (NYSE: HOG) is making nice with the Environmental Protection Agency. Starting next week, the company has agreed to halt sales of its Pro Super Tuner, an aftermarket product that allows riders to modify the output of an engine. The EPA argues that such modifications can result in the vehicles releasing a higher level of pollutants than allowed by environmental law.
Additionally, the producer of the fabled Hogs will, in the EPA's words, "buy back and destroy illegal tuning devices that increase air pollution from their motorcycles, and to sell only tuning devices that are certified to meet Clean Air Act emissions standards." Beginning now, the company will have to acquire certification from the California Air Resources Board for any tuners it puts on the market.
Lastly, the company has accepted a $12 million civil penalty, and will fund a project to replace old-fashioned wood stoves with more environmentally friendly, modern stoves in certain communities in the U.S. That project will cost around $3 million.
Harley-Davidson is complying with the government reluctantly. The company said it "disagrees with the EPA's position, noting that the [Pro Super Tuner] was designed and sold as an after-market, competition-only product used to adapt engine parameters for use with Harley-Davidson after-market equipment."
According to the EPA, the company made or sold a total of about 340,000 tuners.
Although it's a bit burdensome, at the end of the day the settlement is not prohibitively expensive in terms of finances or resources. It also returns Harley Davidson to the good graces of the EPA -- for now, at any rate.
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Eric Volkman has no position in any stocks mentioned.