16 December 1999
Cummins Engine Co. Inc. announced it has agreed with Wartsila NSD of Finland to divide the operations and assets of their European joint venture, Cummins Wartsila.
The joint venture was created in 1995 to design, develop, and manufacture a new generation of heavy-duty high-speed diesel and natural gas engines. The scope of the joint venture was expanded in 1997 to include marketing, sales, engineering and service.
Cummins will take over the manufacture, global sales, and service of the CW 170/180 product line, including the operations and assets of the factory in Daventry, England. Cummins' facility in Ramsgate, England, will upgrade the engines for power generation customers. Cummins will also provide support to the joint venture customers who purchased the CW 170/180 engines.
Wartsila NSD will assume responsibility for the CW 200/220 engines and for the plant in Mulhouse, France, which produces them.
Cummins will take a pre-tax charge of approximately $60 million in the fourth quarter for costs associated with the split. Cummins expects its share in the loss from the joint venture to be $35 million in 1999. It anticipates that the restructured business will be operating at break even by the end of 2000.
Source: Cummins Engine