Cummins Inc has announced that the strategic elements of its market restructuring are in place, and the company remains committed to the heavy-duty truck engine market.
Cummins said it would leverage the strength of ISX and Signature product lines and build off existing product platforms. The firm said it would take a pre-tax charge of $ 100 million to $120 million in the second quarter related to terminating development of a new engine platform and personnel reductions.
Tim Solso, chairman and chief executive officer, 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. Cummins will reduce its workforce by at least 500 over the year through terminations, layoffs, retirements, and attrition.