Layoff notices were delivered to some members of the professional staff at Columbus-based Cummins Inc. this week, affecting white-collar workers in the engine maker’s corporate headquarters for the first time since a move to trim the global workforce was announced five weeks ago.
“These things are literally happening department by department as the company works through projects and priorities,” Jon Mills, Cummins director of external communications, said Tuesday.
According to a report by The Republic, Mills said Cummins employees should know the full extent of the layoffs and who is affected by mid-December. He said there would not be external announcements each time a reduction is made.
Cummins announced Oct. 9 that it would trim 1,000 to 1,500 jobs by year’s end from its 47,000-member worldwide workforce to cope with weaker-than-expected sales and a slowdown in the world economy. The timing of that workforce announcement coincided with a revised sales forecast of $17 billion for the year, which is $1 billion lower than what was estimated in July.
Then on Oct. 17, the engine maker specified that about 150 workers — at least one-tenth of the total global workforce reduction — would be laid off from among its three southern Indiana plants, the Fuel Systems Plant in Columbus, the Columbus MidRange Engine Plant and the Seymour Engine plant. As part of that announcement, Cummins said it also expected 126 workers would be transferred to the MidRange Engine Plant.
Cummins currently has about 7,700 employees in southern Indiana.
Cummins Inc.’s third-quarter earnings fell 22% as the Columbus, Ind.-based engine maker reported that revenue declines in its international markets offset modest growth in North America.
Earlier this month, Cummins trimmed its sales and profit guidance and unveiled cost-cutting measures as it said a weakening global economy was driving down demand for the company’s engines. The company, which is a major supplier to the motorhome sector, said the slowdown is particularly acute in the North America commercial truck market where Cummins is the largest supplier of engines for heavy-duty trucks.
Cummins also reported deteriorating market conditions in China, the global mining industry and the international market for power-generating engines.
“Demand has dropped sharply over the last three months, reflecting a high degree of uncertainty among customers in most geographic markets,” Chairman and CEO Tom Linebarger said Wednesday (Oct. 31). “We have been responding to the conditions by delaying or canceling projects, flexing production at some of our manufacturing plants, reducing discretionary expenses, and reducing our workforce by 1,000 to 1,500 people by the end of this year.”
Cummins reported a profit of $352 million, or $1.86 a share, down from $452 million, or $2.35 a share, a year earlier. Excluding items such as tax adjustments, earnings were down at $1.78 from $2.20. Analysts recently projected $1.83.
Revenue decreased 11% to $4.1 billion, in line with the company’s recent downbeat forecast. Sales rose 2% in North America, but declined 21% in its international markets.
Gross margin eased to 25.3% from 25.7%.
In the engine segment — the largest contributor to the top line — sales dropped 14% to $2.5 billion.
Engine builder Cummins Inc. today (Oct. 24) announced that it is ranked No. 64 among the 500 largest public companies in the United States and No. 1 among industrial companies in Newsweek’s 2012 Green Rankings of businesses.
“This recognition by Newsweek demonstrates Cummins commitment to a key element of our corporate mission – demanding that everything we do leads to a cleaner, healthier, safer environment,” said John Wall, vice president and chief technical officer for Cummins. “Cummins is constantly looking for new and innovative ways to improve the environment and the communities where we live and work, while producing industry-leading products for our customers. Environmental stewardship is a real and important component of business leadership.”
The Newsweek methodology compares the actual environmental footprints, management (policies, programs, initiatives, controversies) and reporting practices of big companies. Newsweek teamed with leading environmental research providers, Trucost and Sustainalytics, to gather and analyze the data.
Navistar International Corp. today (Oct. 22) announced it has reached definitive, long-term supply agreements for heavy-duty diesel engines and emissions aftertreatment technologies with Cummins Inc.
According to a news release, Navistar will offer the Cummins ISX15 in its International ProStar, PayStar and 9900 models. In addition, Navistar will utilize the proven Cummins Emission Solutions aftertreatment system for the company’s proprietary heavy-duty big bore engines.
“This agreement represents a natural extension of the long-standing relationship between Navistar and Cummins and our history of collaboration in serving our mutual customers,” said Troy Clarke, Navistar president and COO. “With the addition of the Cummins ISX15 and the use of the proven Cummins aftertreatment system, we are on a clear path to providing customers with proven, reliable and fuel-efficient clean engine technology.”
Engineering teams from both Cummins and Navistar have been working in close collaboration over the past several months to integrate vehicle, engine, and emissions aftertreatment systems. With a formal, finalized agreement, the teams are now focused on a swift, well-executed and high-quality launch.
Navistar will begin its initial pilot builds of the International ProStar+ with the Cummins ISX15 in November 2012 with first customer shipments in December 2012. The International ProStar+ with MaxxForce 13 and the Cummins Emission Solutions SCR-based aftertreatment system will enter initial pilot production in March 2013 with regular production to begin in April 2013.
The remaining line-up of heavy-duty truck models will transition to SCR-based clean engine technology in a phased launch throughout 2013 based on volume and customer demand.
During the transition, Navistar will continue to build and ship EPA-compliant trucks in all vehicle classes using appropriate combinations of earned emissions credits and/or non-conformance penalties.
Columbus, Ind.-based Cummins Inc. continues to take steps to reach a target of cutting up to 1,500 jobs from its global work force by the end of the year.
The company confirmed to Inside INdiana Business that it will lay off at least 150 workers in southern Indiana. Another 126 workers will be transferred to an engine plant in Columbus.
Determinations about further cuts continue.
The layoffs are expected to impact the MidRange and Fuel Systems plants in Columbus or the engine operation in Seymour.
A union official was quoted earlier this week as saying his membership, which includes research, technology and support staff, would not be subject to job cuts.
Cummins responded at that point by saying determinations were still being made.
Cummins Inc. again lowered its guidance for the year and unveiled plans to cut up to 1,500 employees as the engine maker looks to cut costs in response to the weakening global economy.
MarketWatch reported that shares sank 5.6% to $86 after hours as the company also said third-quarter revenue is expected to miss Wall Street’s expectations. Through the close, the stock is off 4.8% over the past three months.
Cummins reduced its full-year revenue estimate by $1 billion, now projecting sales of $17 billion. It last cut its revenue projections in July. The company expects earnings before interest and taxes to be approximately 13.5% of sales for the year, compared to its prior view of 14.25% to 14.75%.
Cummins expects revenue of about $4.1 billion in the third quarter, below the $4.42 billion projected by analysts polled by Thomson Reuters.
Chairman and CEO Tom Linebarger said the company continued to see weak economic data in several regions increase uncertainty about the direction of the global economy.
“As a result of the heightened uncertainty, end customers are delaying capital expenditures in a number of markets, lowering demand for our products,” Linebarger said.
The company saw the most significant changes in North American heavy duty truck and international power generation markets, while demand in China weakened in most end markets. Cummins also lowered its forecast for global mining revenue.
Cummins unveiled several cost-cutting actions, including planned work week reductions, shutdowns at some manufacturing facilities and plans to reduce its workforce by 1,000 to 1,500 people by the end of the year.
In July, Cummins reported its second-quarter earnings fell 7.1% as revenue was hurt by currency fluctuations, though growth in North America offset weakness in international markets — especially China and Brazil.
It is scheduled to release its third-quarter results on Oct. 30.
Cummins Inc. announced today (Oct. 1) that it has received certification for its ISX15 engine from the U.S. Environmental Protection Agency (EPA), meeting both the EPA 2013 regulations and the new greenhouse gas and fuel-efficiency rules that will take effect in 2014. According to a press release, Cummins 2014 greenhouse gas certification is the first engine certificate issued by the EPA.
Cummins ISX15, the top-selling engine in the heavy-duty truck market, will deliver higher levels of fuel efficiency and reliability in 2013. Efficiency improvements to the base engine include optimized combustion and reduced parasitic load through high-efficiency water, fuel and lube pump systems, and the ISX15 will achieve up to 2 percent fuel economy improvement over today’s product. Cummins ISX15 for 2013 uses the same proven base engine with the XPI fuel system, VGT Turbocharger, Cummins Aftertreatment System with Diesel Particulate Filter (DPF) and Selective Catalytic Reduction (SCR) technology, and fully integrated electronics.
“Cummins 2013 truck engines will deliver better fuel economy with no major hardware changes,” said Jeff Jones, Cummins Vice President – Sales and Market Communications. “This results in improved reliability due to stable architecture.
“The certification of the ISX15 demonstrates Cummins commitment to deliver products that exceed both environmental and customer requirements. We are confident that we’ll receive certification for our other on-highway engines well before the end of the year,” Jones continued.
Cummins’ entire lineup of on-highway engines for truck, bus, RV and specialty-vehicle markets will enter production on Jan. 2, 2013. All engines are expected to be certified a full year early to the 2014 greenhouse gas and fuel-efficiency rules.
Columbus, Ind.-based engine maker Cummins Inc. says it has instituted a global hiring freeze for at least the rest of this year with an uncertain impact on announced expansions of Indiana operations.
According to The Republic, Columbus, the move by the company comes after seeing a recent drop in sales in some of its markets in North America, China and Brazil. The company said that it was taking necessary steps to manage growth by reducing costs.
Cummins has seen substantial growth in recent years and says it has a record worldwide work force of 46,200 people. Cummins has some 7,800 Indiana workers, including its facility in Columbus that builds motorhome engines.
Company spokesman Jon Mills said he couldn’t discuss how the freeze would affect expansions of its Columbus offices or a $219 million project at its Seymour, Ind., factory.
Columbus, Ind.-based engine maker Cummins Inc. reported adjusted quarterly profit that beat Wall Street estimates as sales in North America helped offset weakness in international markets, especially China and Brazil.
Reuters reported the company said on Tuesday (July 31) that revenue declined 4% to $4.45 billion, in line with Wall Street estimates. Excluding the effects of divestitures and currency fluctuations, revenue was flat. Cummins, a major supplier of diesel engines to the RV industry, said net earnings were $469 million, or $2.47 per share, down from $505 million or $2.60 a share a year earlier.
However, gross margins were at record highs in the quarter and forecast improved margins for the full year despite flat revenue, helping drive shares up nearly 8% at midday.
Cummins executives said the company was cutting costs, including tightening up on travel and looking to freeze hiring in some parts of the company, with uncertain global economic conditions pressuring truck sales in emerging markets.
“It’s a much more volatile economy than we were looking at in the first quarter of the year and much harder to predict,” CEO Tom Linebarger told analysts on a call. “However, our view still is that developing countries will be growing faster than developed countries and investing in infrastructure.”
Reuters reported that excluding gains from divestitures, Cummins earned $2.45 per share, topping the average Wall Street forecast of $2.28, according to Thomson Reuters I/B/E/S.
“Despite lower revenues, Cummins did a good job improving gross margins on price improvement, mix and manufacturing efficiencies,” S&P Capital IQ equity analyst Jim Corridore wrote in a note. “We think Cummins is well positioned in the current environment and should see operating leverage when revenue trends improve.”
Earlier this month, Cummins cut its sales forecast on weaker orders from truck and power generation customers, a stronger dollar and softer-than-expected demand in emerging markets.
In the engine segment, sales declined 2%. Improved North American truck and construction market demand was offset by lower sales to China construction, Brazilian truck and North American oil and gas markets.
Component sales were unchanged. Higher demand in North America and Brazil was offset by lower demand in Europe and China as well as the impact of divestitures completed in 2011.
Power generation sales were also unchanged as higher sales in North America offset lower demand in Europe, China and Latin America.
Sales in the distribution segment rose 1%, with higher parts and service growth in several regions more than offsetting weaker demand in the markets for North American oil and gas and Middle East power generation.
“Second-quarter gross margins were at record levels as we continue to drive improvements in productivity and quality,” Linebarger said.
Earnings before interest and taxes (EBIT) were $669 million or 15% of sales. Cummins expects full-year revenue of $18 billion, with EBIT between 14.25% and 14.75% of sales.
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Engine builder Cummins Inc. is in a strong position to continue expanding in global markets and meet its long-term growth targets, Cummins Chairman and CEO Tom Linebarger told shareholders at the company’s annual meeting today.
According to a press release, Linebarger highlighted Cummins’ 2011 results, including record financial performance with sales up 36% from 2010 to more than $18 billion, and earnings before interest and tax (EBIT) up 54% to $2.56 billion. Cummins’ outstanding 2011 performance and the strong start to 2012 positions the Company to achieve its goal of $30 billion in sales in 2015, he said.
“Our technology leadership in markets around the world enables Cummins to capitalize on the macro trends that are shaping the global economy — stringent emission standards, rising energy prices, globalization and infrastructure growth,” Linebarger said.
The company’s profits have tripled over the past decade as investments in growth, new products and leading-edge technology have paid off, he said. Cummins’ strategy to focus on five growth accelerators makes it possible to meet the challenges of the changing global economy — adopt a growth mindset, develop from a multinational to a global company, achieve supply chain excellence, deliver Customer Support Excellence (CSE), and invest in leadership development.
“I’m proud to report a strong year in 2011 with record financial performance and I believe our future is even brighter as we capitalize on our current strengths and future opportunities,” said Linebarger said. “However, I am even more proud of the hard work and commitment of the 44,000 Cummins employees who come to work each day not only making a difference here, but having a positive impact on the community as well.”