Poor outlook forces Cummins Inc to cut 2,000 jobs


Engine giant to complete restructure by the end of 2015, reducing job numbers by 2,000

Poor outlook forces Cummins Inc to cut 2,000 jobs
Cummins Inc. looks to restructured future.

 

Cummins Inc., the global parent of Cummins South Pacific, will undergo a cost-reducing restructure this year that will see up to 2,000 workers made redundant.

The changes, expected to save Cummins US$160-200 million, comes in the face of poor demand in a number of markets.

"We are taking difficult but necessary actions to lower costs in the face of weak demand in many of our markets," Cummins Inc. chairman and CEO Tom Linebarger says.  

"Global off highway and power generation markets have been weak for some time and are worsening."

The news was announced during  Cummins’ third quarter results, where the company’s revenue of US$4.6 billion (A$6.47b) fell six per cent compared with last year, with a four per cent rise in North America hampered by an 18 per cent decline in international sales.

"Industry orders in key end markets in Brazil and China are at multi-year lows and showing no signs of improvement in the near-term," Linebarger says.  

"Given the uncertainty in the global economy, we expect challenging conditions to persist for some time."

According to the quarterly report, sales for the company’s power generation segment (down 13 per cent), engine segment (down 10 per cent), and components segment (down four per cent) have fallen below 2014 numbers.

Not all were down however, with sales for Cummins’ distribution segment rising by 20 per cent.

Based on its current trajectory, Cummins Inc. predicts annual revenue figures will drop two per cent.

Cummins says it will evaluate if further measures need to be taken in the coming weeks and months.

In an email reponse to ATN, Cummins South Pacific says the "announcement by Cummins Inc. is currently a global review and we’re still understanding what the impact will be for Cummins South Pacific."

 

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