Cummins, Inc. Business Report FY2009
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|FY2009||FY2008||Rate of change (%)||Factors|
-Engine segment sales experienced deterioration across all major markets, versus 2008, as a result of the global economic downturn. The following are the primary drivers by market:
-Industrial market sales decreased due to deterioration in units sold in the construction, marine and mining markets by 63 percent, 45 percent and 50 percent, respectively.
-Stationary power market sales declined due to decreased sales to the Power Generation segment as it used existing inventory to meet declining customer demand.
-Medium-duty truck sales decreased significantly due to a 35 percent decline in international truck units sold as a result of the global economic downturn. The U.S. market was impacted by the economic downturn; however, this was partially offset by increased sales ahead of the January 1, 2010, emissions standards change and improving market share.
-Heavy-duty truck sales declined as international units sold were down 64 percent. The Company experienced a decline in Mexican heavy-duty sales due to an increase in heavy-duty truck sales in the first six months of 2008 resulting from the increased activity ahead of Mexico's July 1, 2008, new emissions requirements, appreciation of the U.S. dollar and an influx of used trucks into the market from the U.S. and Canada permitted under a new law. Although U.S. truck fleets experienced financial challenges due to a lack of freight and limited access to credit, the U.S. heavy-duty sales ended the year flat as a result of increased sales in the fourth quarter of 2009 ahead of the January 1, 2010, emissions standards change and improving market share.
-Total on-highway-related sales were 61 percent of total Engine segment sales, compared to 53 percent in 2008.
-Components segment sales for the year ended 2009 decreased in all businesses versus 2008 as the result of the global economic downturn. The following are the primary drivers by business.
-Filtration business sales decreased significantly due to falling global aftermarket and OEM demand, especially in North America and Europe, and the transfer of a portion of the business to emissions solutions in 2009.
-Turbocharger business sales decreased significantly due to falling OEM demand in Europe and North America.
-Fuel systems business sales decreased primarily due to falling OEM demand in North America and Europe.
-Emissions solutions business sales decreased due to falling OEM demand across Europe and North America. These decreases were partially offset by the transfer of a portion of the filtration business into emissions solutions in 2009
Contracts-The Company announced an increase in orders for Cummins' 6.7-liter turbo diesel engines on Chrysler's Dodge Ram. (From a press release on October 7, 2009)
-The Company announced a multiyear engine contract for Chrysler trucks. It will supply 6.7-liter turbo diesel engines for Dodge Ram Heavy Duty pickups and Chassis Cab trucks. The company has produced over 1.7 million turbo diesel engines for Dodge Ram trucks since 1989. Today, over 80 percent of Ram customers purchase their truck with Cummins turbo diesel. (From a press release on February 3, 2010)
Restructuring-Cummins Filtration, one of the Company's divisions, announced that it is consolidating a significant portion of its North American filter production into its facility in San Luis Potosi, Mexico in order to reclass under-used plants. Under the plans, filter assembly operations in Lake Mills, Iowa, USA will be transferred to San Luis Potosi, beginning in November 2009. The Company is also considering moving additional assembly work from its Filtration plant in Cookeville, Tennessee, USA. (From a press release on Aug 25, 2009)
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R&D Structure-The Company operates 17 technical centers around the world.
Technological Partnership-Jan. 2009, Cummins Emission Solutions (CES), a Company's subsidiary, announced that it would strategically partner with EMCON Technologies LLC (EMCON) in Michigan, USA, in the manufacturing of emission controls systems for the on-highway truck market. CES will provide the integrated DPF (Diesel Particulate Filter –SCR (Selective Catalytic Reduction) systems for meeting 2010 EPA emission standards from its manufacturing base in Wisconsin, USA. (From a press release on Jan 20, 2009)
Product Development-In Jan. 2010, the Company secured nearly 54 million USD in funding from the Department of Energy (DOE). Under the Super Truck program, it will receive nearly 39 million USD in funding. The Company will partner with Peterbilt Motors Company, a division of PACCAR, to develop efficient and clean diesel engines for heavy-duty Class 8 trucks. Under the ATP-LD program it will receive an additional 15 million USD in funding to support powertrains for fuel efficient light-duty vehicles. (From a press release on January 11, 2010)
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