DOW JONES NEWSWIRES
Pep Boys-Manny Moe & Jack (PBY) will pay $5 million in
penalties and take corrective measures to settle claims it violated
the Clean Air Act, according to the U.S. Department of Justice.
The Justice Department alleges the auto-parts retailer imported
and sold motorcycles, recreational vehicles and generators made in
China that didn't comply with environmental requirements. Baja
Inc., which supplied the noncompliant vehicles to Pep Boys, also is
settling with the U.S. government.
"Importers of foreign made vehicles and engines must comply with
the same Clean Air Act requirements that apply to those selling
domestic products, and this settlement demonstrates that we will
take strong action to ensure that importers comply with their
obligations," said Assistant Attorney General Ignacia S.
Moreno.
Pep Boys and Baja will also "offset the excess emissions from
the vehicles and engines already sold" and ensure that future
imports and sales meet regulatory standards, Moreno said. Pep Boys
will have to export or destroy more than 1,300 non-compliant
vehicles and engines as well as implement projects to offset excess
emissions, including offering discounted push or electric lawn
mowers in exchange for older mowers that pollute more.
The Justice Department said the case is the biggest vehicle- and
engine-importation case brought by the U.S. under the Clean Air
Act, both in number of vehicles and engines imported and penalty
paid.
In April, Pep Boys said it swung to a fiscal fourth-quarter
profit because of cost-cutting and margin controls despite soft
holiday sales, and the company posted its first annual profit since
2005.
Shares of Pep Boys were up 5.9% to $11.65 in recent trading amid
a sharp market rally following last week's slump. The stock has
risen 38% so far this year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com