Cummins Inc. is a corporation of four distinct but complementary business units. It is divided into engine, power generation, components, and distribution businesses.
Cummins is a world leader in the manufacture of large diesel engines.[1] As such, it controls a little less than one-third of the North American market for heavy-duty truck engines. It also produces engines for school buses, medium-duty trucks, pickup trucks, and industrial equipment.
Cummins also makes power generation products, such as generators and alternators, filtration systems, and turbochargers.
It is ranked No. 206 on the Fortune 500 list, fourth amongst Industrial and Farm Equipment manufacturers. Its 2007, annual revenues were US$13.048 billion, with a profit of US$739 million.
Cummins is traded on the New York Stock Exchange under the moniker “CMI.”
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[edit] History
[edit] Developing Diesel Engines
Cummins Inc. was founded by Clessie Lyle Cummins, a mechanic, inventor, and chauffer. In the early 20th century he was employed by a wealthy industrialist and philanthropist named William G. Irwin. He was responsible for taking care of Irwin’s 1909 Packard limousine.
Eventually Cummins demanded a raise, but was willing to take a pay reduction since Irwin provided him with new tools so he could repair engines in the garage. Soon he was manufacturing wagon hubcaps for the U.S. Army.
Meanwhile, he was learning about diesel engines used by German U-Boats. He felt the engines were too large, smoky, and impractical for transportation needs.
By 1919, Cummins was working full-time on diesel engines after hearing Sears, Roebuck & Co. were interested in marketing them. He persuaded Irwin to negotiate a contract with Sears and established Cummins Engine Co. Inc.
The first Cummins engine was defective and rejected by Sears. However, Irwin saved Cummins by donating US$10,000 to correct the defects. Irwin continued investing in Cummins Engine Co. by providing a further US$2.5 million.
Eventually, Cummins designed a successful engine that avoided the pitfalls of previous inventors. The problem with diesel engines at the time was that engineers kept adding devices to give them more power. Instead, Cummins used “combustion ignition.”[2] It required fuel oil in the cylinder to burst into flames to provide power, which “systematically disposed of add-on parts.”[3] These new engines initially reduced horsepower, but ultimately ran faster than other models. However, these engines were too powerful for some machines, even ripping the bottoms from fishing boats.
[edit] A Breakthrough Engine
His diesel engine breakthrough was “the Sneezer” model, which discharged every last particle of fuel oil into the cylinder to ensure it did not release any smoke. The fuel injector was described by experts as “simpler than a fountain pen.”[4]
To prove the effectiveness of his new engine, he showcased it with a number of different public tests. First, he installed it into a Packard automobile and drove 792 miles (1,275 km) (from Columbus, Indiana to New York) on just US$1.88 worth of heating oil, without refueling. He displayed the car and engine at the 1930 New York Automobile Show. Then he drove the car across the country on just US$9.36 worth of fuel. Finally, he drove it on the Indianapolis Motor Speedway, breaking the record speed for a diesel-powered car, going 80 miles (129 km) per hour.
At this point, the Cummins fuel pump and injector was regarded as the best in the industry. However, truck manufacturers were apprehensive to use them; instead, they continued with gasoline engines while trying to design their own diesel models. Again, William Irwin helped. He installed Cummins’ diesel engines into delivery trucks for his chain of grocery stores. The drivers loved the new vehicles and began recommending them to fellow truckers, and as a result Cummins’ business began to flourish.
In 1933, Cummins released the Model H, an engine designed specifically for transportation. It became the company’s most successful engine model family.[5]
In 1934, Irwin’s grandnephew, J. Irwin Miller, was appointed head of the company.[6] While he knew very little about engines, he applied himself rigorously to become knowledgeable. His first order of business was to replace Cummins’ tools with a full-scale production plant. Also, Miller used a different approach for marketing their engines. He marketed them to truckers instead of suppliers with the hope they would influence the suppliers to change engines. So while the trucking business prospered in the 1930s, so did the market for large diesel engines.
[edit] Becoming Profitable
In 1937, Cummins turned its first profit. It achieved this by selling engines to its competitors, which was viewed as an “uncertain way of doing business,” but it worked.[7]
“We're in the business of selling engines to engine makers, which is surely not the smartest way to make a living,” said Miller.[8]
In 1940, Cummins offered the first 100,000-mile (161,000-km) warranty.[9]
By 1946, Cummins had reached sales of US$20 million. Cummins’ best selling engine was its 2,590-pound (1,166-kg) diesel, designed for trucks of 13 tons or more.
Cummins stayed ahead of competitors by introducing its turbo-diesel, which used exhaust gases to turn a gas turbine
supercharger.[10] This increased the horsepower of each Cummins’ engine by as much as 50 percent without raising its fuel consumption. Cummins demonstrated the new engine by returning to the Indianapolis Motor Speedway. The engine malfunctioned, but Miller was not worried. He said, “We have progressed from failure to failure.”
Soon the engine was perfected and being marketed.
By the 1950s, Cummins was way ahead of its competition. It controlled up to 60 percent of the North American heavy-duty truck market.[11] It met this market with a new pressure-time fuel injection system in 1954.
Cummins’ sales hit US$100 million by the late 1950s.[12]
[edit] Diversifying
With its role amongst heavy-duty diesel engines already established, Cummins decided to branch into alternative markets. It built a new line of V-6 and V-8 engines for the lighter truck market. However, this new market was hard to enter because diesel engines cost US$1,000 to US$4,000 more than gasoline engines.[13] So, diesel was only beneficial for vehicles driven more than 4,000 hours per year.[14]
In the 1960s, Cummins suffered a slow decline where sales and profits fluctuated. During this time the company was interested in acquiring companies that produced diesel related products. However, it also acquired a truly diverse portfolio of other companies, including a ski manufacturer, a bank, and an Irish cattle-feeding business.
In 1967, Cummins share of the truck market fell below 45 percent, but sales rebounded the following year with a record US$365 million.
New CEO James A. Henderson and new president Henry Schacht decided Cummins’ focus should return to diesel products. It downgraded its product line, making fewer, but more powerful engines.
It expanded with new operations overseas establishing plants in Scotland and England, which allowed it to penetrate the European market while avoiding tariffs.
While Cummins was entering the international market, Japanese companies were entering the U.S. market and undercutting prices by 10 to 40 percent.[15] This forced Cummins to initiate its own price reduction, which resulted in a drop in employment. Between 1970 and 1986 employment was cut by 22 percent.[16]
Throughout the 1980s Cummins lost millions of dollars, but tried to maintain its dividends by investing US$200 million into capital investments and improvements.
By the early 1990s the company had rebounded. In 1994 it had achieved record sales of US$4.74 billion with record profits of US$252.9 million.[17]
In 1995 Cummins developed a computer system for its engines to capture performance data. It was called SmartPower and it collected 160 types of performance data with 100 customized performance features.
Cummins also participated in a collaborative effort to develop a standard for transmitting engine data on the Internet.
[edit] Filtration Subsidiary
Cummins Inc. has become a world leader in filtration and exhaust products for heavy-duty diesel engines. It acquired the Fleetguard brand of filtration systems in 1970 and the Deluxe Filter Co. in 1980.
Today, Cummins Filtration owns more than 200 active global patents for filtration technology. Its more recent developments include Centriguard centrifugal system, Enviroguard open crankcase ventilation system, OptiAir air filtration system with disposable parts and lube, and hydraulic filters made from advanced composite polymers. It also offers a full line of branded coolants and fuel additives.
[edit] The Company Today
Cummins is a publicly traded company with headquarters in Columbus, Indiana. It serves more than 197 countries and territories through 550 company-owned and independent distributors and more than 5,000 dealer locations.[18] It has 38,000 employees worldwide.[19]
The company's CEO is Theodore M. Solso.
[edit] Equipment List
[edit] References
- ↑ Cummins Inc. profile. Hoovers.com, 2008-08-25.
- ↑ FundingUniverse.com Cummins Inc. History, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Official Cummins Inc. website, 2008-08-25.
- ↑ Official Cummins Inc. website, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Official Cummins Inc. website, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Official Cummins Inc. website, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Cummins Inc. History. FundingUniverse.com, 2008-08-25.
- ↑ Official Cummins Inc. website, 2008-08-25.
- ↑ Official Cummins Inc. website, 2008-08-25.
