Cummins Inc. announced Friday 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, Cummins has decided to offer a voluntary retirement package to certain active professional employees in the United States. The remainder of the reductions will be involuntary.
"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."
Actions taken so far include:
* Initiating temporary plant shutdowns, shortened work weeks and extending traditional holiday closing periods;
* Reducing by several hundred the number of contingent workers in manufacturing and logistics locations around the world;
* Eliminating overtime in many locations;
* Eliminating nearly 100 hourly positions in the company's fuel systems plant in Juarez, Mexico, and another 85 hourly employees in the mid-range engine plant in Darlington, U.K.
In addition, Cummins has aggressively cut costs and reduced spending in all areas, including severely restricting hiring and cutting spending on expenses such as travel.
"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."
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, Cummins has decided to offer a voluntary retirement package to certain active professional employees in the United States. The remainder of the reductions will be involuntary.
"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."
Actions taken so far include:
* Initiating temporary plant shutdowns, shortened work weeks and extending traditional holiday closing periods;
* Reducing by several hundred the number of contingent workers in manufacturing and logistics locations around the world;
* Eliminating overtime in many locations;
* Eliminating nearly 100 hourly positions in the company's fuel systems plant in Juarez, Mexico, and another 85 hourly employees in the mid-range engine plant in Darlington, U.K.
In addition, Cummins has aggressively cut costs and reduced spending in all areas, including severely restricting hiring and cutting spending on expenses such as travel.
"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."
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