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> However, Cummins' statement also indicates the settlement does not meaningfully impact its business prospects. The company says it "is in a strong financial p
by davemp 3y ago
> However, Cummins' statement also indicates the settlement does not meaningfully impact its business prospects. The company says it "is in a strong financial position with existing liquidity and access to capital to satisfy obligations associated with the settlements, support ongoing operations, and execute its growth strategy."
Absolutely crazy that a company can essentially be dead to rights proven to have committed fraud against the general public and be in a “strong financial position” afterwards.
So the cost of the settlement is ~$2B on 1mil units. I don’t know what the unit economics of engines are but it’s probably safe to assume they made ~$2k profit per unit. How is that justice? Imagine if you or I stole >$1mil and the government just said, “Now give it back.” There’s almost no downside to getting caught in such a situation. There’s a chance you won’t get caught, netting you a cool million. The value prop is basically:
$PROFIT * (1 - P_CAUGHT) - $PENALTY * P_CAUGHT
So if the penalty <= the profit, you better have a _really_ efficient enforcement or the equation will be in the favor of criminals. Criminals are essentially only risking the time investment / opportunity cost.
Yet another huge failure from the US justice system.
- gtvwill 3y agoRemember if there is no jail time then it's only a law for the poor.