Cummins 8-K 2008
PURSUANT TO SECTION 13 OR 15(d) OF THE
Date of Report: December 10, 2008
Registrant's telephone number, including area code: (812) 377-5000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Item 8.01 Other Events
Item 9.01. Financial Statements and Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Mark Land Director of Public Relations
For Immediate Release
December 5, 2008
Cummins to reduce worldwide professional workforce by at least 500 employees in response to global economic slowdown
COLUMBUS, IND. Cummins Inc. (NYSE: CMI) announced today that it will reduce its professional workforce worldwide by at least 500 employees or approximately 3.5 percent by the end of 2008 as a result of the continued deterioration in the U.S. economy and many other key markets around the world.
The employee reductions will come from all parts of the Company. In order to minimize the impact of involuntary employment actions, the Company has decided to offer a voluntary retirement package to certain active professional employees in the United States based on a clearly defined set of criteria.
Those employees being offered a chance to participate in the program will have until December 11 to accept the compensation packages, which include salary and continuation of benefits, including health care, for nine months following their retirements.
The remainder of the reductions will be involuntary. Employees affected by these job actions will, in most cases, be notified by December 18 and the reductions are expected to take effect by December 31.The costs associated with the employee reductions will be recognized in the Companys fourth quarter earnings.
Cummins already has taken a number of actions across the company to try to bring costs in line with our reduced current demand and to meet the expected challenges of 2009, said Cummins Chairman and Chief Executive Officer Tim Solso. Despite those efforts, we have now reached a point where we will have to take more significant steps to reduce our professional workforce around the world.
Cummins has deployed its rings of defense approach to reducing costs at manufacturing and logistics locations worldwide. The actions taken so far include:
In addition, Cummins has aggressively cut costs and reduced spending in all areas, including:
Cummins will continue to use its rings of defense strategy to reduce manufacturing and logistics costs in the future, as well as continue looking for other ways to cut costs throughout the Company.
These are difficult times, but in many ways we are better positioned to weather a downturn than at any time in our history, Solso said. Our debt is less than 15 percent of our total capital. We have healthy cash balances and our business operations continue to generate cash. We also have a $1.1 billion revolving credit line for additional liquidity.
We are committed to doing what is necessary to emerge from this downturn a stronger company and resume our recent history of strong growth once our markets begin to improve.
Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves customers in approximately 190 countries and territories through a network of more than 500 company-owned and independent distributor locations and approximately 5,200 dealer locations. Cummins reported net income of $739 million on sales of $13.05 billion in 2007. Press releases can be found on the Web at www.cummins.com.
Forward-looking disclosure statement
Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the companys expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the companys actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Cummins Securities and Exchange Commission filings.