Cummins to Produce Light-Duty Clean-Diesel Engines at Columbus Engine Plant
COLUMBUS, IND. - Cummins Inc. (NYSE: CMI) today announced that it has selected the Columbus Engine Plant (CEP) here as the production facility for its new family of light-duty, clean-diesel engines, which the Company plans to begin manufacturing by no later than 2010.
Preparations for the manufacturing lines are scheduled to begin in mid-2007 and are expected to create 200 additional jobs by the end of next year. Cummins expects the new line to employ at least 600 to 800 people within two years of the product launch.
DaimlerChrysler will be the major customer for the engine, which will be designed to power vehicles below 8,500 pounds gross vehicle weight for a number of automotive applications.
"We are pleased to build upon our 18-year partnership and brand franchise by providing our new light-duty diesel engine for use in a Chrysler Group product," said Tim Solso, Cummins Chairman and CEO. "We know customers for this product will demand outstanding performance, terrific fuel efficiency and car-like noise characteristics. Cummins is using its technology leadership to meet all of those criteria, while providing the driving public with an exciting new clean diesel engine."
Cummins expects the manufacturing lines for the new engine to occupy approximately 500,000 square feet of the 1.4 million square feet of space at CEP devoted to manufacturing. CEP was Cummins' first full-fledged manufacturing facility and has been in use since 1926. Approximately 630 people currently work at CEP.
Cummins anticipates it will spend approximately $250 million, which includes capital expenditures for machinery and equipment, plus facility upgrades.
Columbus was chosen from among several possible locations based on a number of factors, including:
oA competitive package of state and local incentives.
oSignificant cooperation from the Company's local unions who worked with Cummins to create a competitive work environment for the plant.
oConsiderable commitment to improving the region's post-secondary educational system.
oCommitment to recruiting and training people for advanced manufacturing careers.
oCummins' long and successful history as a Southern Indiana-based company.
"This is an exciting program," Solso said. "We will be manufacturing a great new product that will increase fuel efficiency by 30 percent or more, thus saving energy and making us less dependent on foreign oil. And, this light-duty diesel engine will provide Cummins with the opportunity to develop a completely new market with our industry-leading technology.
Solso added: "We are delighted to be able to make these clean diesels in our headquarter city. The level of commitment and cooperation from local and state government, as well as from our union leadership and educational leaders around the state, made Columbus the best location for this important enterprise. Their efforts will create new jobs, help improve post -secondary education in the area and motivate more young people to view manufacturing as a great career opportunity," he said.
Solso made the announcement this morning at CEP in front of a large crowd of employees and invited guests, including Indiana Gov. Mitch Daniels, Columbus Mayor Fred Armstrong and other individuals and groups responsible for putting together the Columbus package, which is valued at approximately $30 million.
"It's yet another big win for the Indiana economy, one with special excitement because it involves one of our longstanding leading corporate citizens," said Gov. Daniels. "The educational components of the state's participation stem from a typically creative Cummins suggestion, and could provide a good model for future new job transactions."
"The City of Columbus is really delighted that Cummins chose Columbus as the city in which to manufacture this important and exciting new engine," said Mayor Armstrong. "Cummins and the City have a long and mutually beneficial partnership and this is yet another example of us working together to not only add jobs, but to improve the educational systems for everyone in our region."
The concept for the light-duty engine is the result of a nine-year partnership between Cummins and the Department of Energy, which has received strong support over the past several years from Indiana's Congressional delegation.
'Thanks to the leadership of Governor Mitch Daniels, Mayor Fred Armstrong and other state and local officials, Cummins continues its strong relationship with the people of Columbus. By expanding its production line, Cummins will employ 600-800 new jobs. While many deserve credit, Cummins' decision is mostly a reflection of its confidence in the hard-working people of Indiana. Cummins said yes to Indiana and yes to the skill, integrity and ethic of working Hoosiers," said Congressman Mike Pence, speaking on behalf of the Indiana Congressional delegation.
A critical factor in the Company's decision to locate the manufacturing line in Indiana was a commitment from state government and leading educational institutions to create and support programs aimed at providing the skills necessary to succeed in an advanced manufacturing environment. Specifically:
oLocal and state leaders are working with Indiana University, Purdue University, Ivy Tech Community College and the Community Education Coalition (of Columbus) to establish a new education model for the area that would allow them to further align area two- and four-year programs to the needs of the region. Cummins is confident that this new model will improve the post secondary educational opportunities for everyone in the region, and will help all employers in the area to attract and retain outstanding employees.
oIvy Tech, state leaders, the Region 9 Workforce Board and companies in this area have also committed to take a new approach to the recruitment and training of people for careers in advanced manufacturing with the assistance of the Manufacturing Institute of the National Association of Manufacturers and its innovative Dream It. Do It. program. This partnership will focus on actively recruiting students to consider the benefits of careers in manufacturing, and then providing these students with the training necessary for success in today's manufacturing industry.
Cummins is proud to once again reaffirm its commitment to Columbus and southern Indiana. But the impact of today's announcement goes beyond the jobs being created by the new engine products," said Joe Loughrey, Cummins President and Chief Operating Officer. "Our success - and that of other manufacturers in the region - is closely tied to the creation of an educational infrastructure that values and supports the needs of advanced manufacturing.
"The support shown by the state and some of our leading educational institutions today will benefit not just Cummins, but the entire region," Loughrey added.
Cummins unions work to create competitive environment
Leadership from the Diesel Workers Union (DWU) and Office Committee Union (OCU), the two unions that represent Cummins workers in southern Indiana, reached agreements with the Company on a framework for wage and work rules for the production of this new product in CEP.
"Today's agreements are the latest example of the Company and its employees working together to achieve a common goal that will bring additional jobs to southern Indiana. We look forward to building on the positive working relationship with our union leadership and employees," Loughrey said.
About Cummins
Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves customers in more than 160 countries through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. Cummins reported net income of $550 million on sales of $9.9 billion in 2005. Press releases can be found on the Web at www.cummins.com.
