Eaton, Cummins form automated transmission joint venture

COLUMBUS, IN – Eaton and Cummins will develop medium- and heavy-duty automated transmissions under a joint venture to be known as Eaton Cummins Automated Transmission Technologies, the companies have announced.

Each will have an equal share in the business that will design, assemble, sell and support future proprietary models integrated with Cummins engines, and versions for customers spec’ing other engine platforms, Ken Davis, president of Eaton’s Vehicle Group, said during a conference call.

While Eaton’s medium-duty Procision will be part of the venture, the Eaton Vehicle Group will retain its global manual transmission and clutch business, as well as automated transmission business outside North America. Eaton also keeps its global aftermarket, light-duty transmission, agricultural transmission and global automotive businesses.

Eaton receives US $600 million from Cummins in the deal, and Cummins will consolidate the operation under its components business. The transaction is expected to be finalized in the third quarter of this year.

The joint venture will be based In Galesburg, Michigan, and products will be manufactured at existing plants. The focus now is looking at ways to “accelerate” growth under the new structure, Davis said, adding that the businesses will look at potential cost-saving synergies that might also exist.

Ed Pence, vice president and general manager of Cummins’ high-horsepower engine group, referred to the deal as a “historic milestone” for Cummins as it pushes to be a global powertrain player supporting its own engines or proprietary engines from other manufacturers.

Discussions about a joint venture were born during an investor conference in September 2015, when Cummins identified powertrains as a critical area for growth and began looking at ways to take the concept of its SmartAdvantage powertrain to the next level, Davis said.

The SmartAdvantage powertrain, introduced in 2013, marries an Eaton Fuller Advantage 10-speed Automated Manual Transmission with a Cummins X15 or ISX12 engine with SmartTorque2 and SmartCoast.

“Our growth strategy includes expanding our product offerings and extending our global footprint by becoming the world’s leading powertrain supplier,” said Tom Linebarger, Cummins chairman and Chief Executive Officer. “Our [joint venture] with Eaton will deliver the most advanced automated transmissions and develop an integrated powertrain and service network that supports our customers like never before.”

“Our joint venture with Cummins will leverage the technical strengths and experience of two industry leaders with long histories and deep industry expertise to provide superior automated transmission technology for our global customers,” added Craig Arnold, Eaton chairman and Chief Executive Officer.

 

John G. Smith is the editorial director of Newcom Media's trucking and supply chain publications -- including Today's Trucking, trucknews.com, TruckTech, Transport Routier, Inside Logistics, Solid Waste & Recycling, and Road Today. The award-winning journalist has covered the trucking industry since 1995.

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