The chief executive officer of Columbus-based Cummins Inc. (NYSE: CMI) says, with weak global demand and "no clear signs of improvement in the near term," restructuring and job cuts are necessary. Tom Linebarger says orders around the world fell "further than expected," specifically in the power generation market. Cummins announced plans today to cut up to 2,000 workers, most by the end of the year.
Linebarger says the company will evaluate its operations "facility by facility" to determine if any further action is needed. That evaluation is expected to be complete by the end of the year.
The engine maker says third quarter earnings took a hit. Cummins reported third quarter net income of $380 million, compared to $423 million during the same period the previous year. Third quarter revenue was $4.6 billion, down six percent from the previous year. Linebarger says engine business revenues decreased by 10 percent year-over-year.
Linebarger says there are areas for potential growth, citing China and India as possibilities for increases. He also says Hedgehog, the company’s new large engine program, could be an area for growth. Last weekend, Cummins Global Rail and Defense Business General Manager Melina Kennedy was a guest on Inside INdiana Business Television. She said the company is in a position to make gains in the high-speed passenger rail business as well.
The announcement comes months after Cummins broke ground on a $30 million global Distribution Business headquarters in downtown Indianapolis. The building is on the former Market Square Arena site and is expected to open in late 2016.
Cummins Inc. Chief Executive Officer Tom Linebarger says there are still areas of potential growth for the company.