COLUMBUS, Ind. — Heavy Engine maker Cummins says the derailment of the U.S. economy is masking severe problems in the trucking industry.
“Cummins’ challenge is to fix the heavy-duty truck market. The North American economic slowdown is hiding the real issues in the heavy-duty business,” said Cummins chairman and chief executive officer Tim Solso at the company’s annual meeting held yesterday.
“Our entire customer base and industry, are in a period of rapid change … both OEM consolidation and globalization,” Solso adds. “This is happening at a greater pace and during one of the most severe downturns in memory.”
“Cummins is pursuing steps to re-engineer how it participates in that market,” says Solso. “Those steps including forming innovative relationships with truck manufacturers where Cummins behaves like the internal engine division for a number of Truck OEMs.”
“(This) would reduce front-end marketing costs while also enabling development of a better product due to closer working relationships.”
Cummins said that sales revenue in 2000 remained level with 1999, at US$6.6 billion. Sales were strong in the first half but fell seven percent in the second half. The drop was due to several market downturns, including North American heavy-duty truck market.
“I am confident about the future of Cummins,” added Solso, “because 88 per cent of our business is profitable. We are taking steps to fix the rest.”