Cummins terminates new engine development
1 June 2001
Cummins Inc. today announced it will terminate the development of a new truck engine platform. Instead, the company will build off existing product platforms, the ISX and Signature engines, to meet the customer’s needs and the coming emission standard requirements.
Cummins will also reduce its workforce, throughout the company, by at least 500 people over the year. The company said that it would take a special pre-tax charge in the second quarter of $100 million to $120 million relating to the termination of the development of a new engine platform and people reductions.
Tim Solso, Cummins’ Chairman and CEO, said, “By avoiding approximately $200 million in additional expenditures from planned platform investments over the next two years and working with existing platforms to meet the changing emissions regulations, we now have the opportunity to increase the rate of our debt reduction and the flexibility to invest in growth opportunities that are available in our Power Generation and Filtration Businesses as well as other parts of the Engine Business.”
These actions will remove at least $150 million in costs associated with the Engine Business over the next two years. The company indicated that the current economic environment in the United States makes it difficult to predict any significant upturn yet this year in consumer and industrial end markets.
Source: Cummins Inc.