The challenge for Cummins is to “fix the heavy duty truck market,” according to Chairman and CEO Tim Solso.

“The North American economic slowdown is hiding the real issues in the heavy duty business,” he told shareholders at the company’s annual meeting. “Cummins is pursuing steps to re-engineer how it participates in that market.”
Those steps, he continued, include the formation of “innovative relationships with truck manufacturers where Cummins behaves like the internal engine division for a number of truck OEMs.” Cummins recently signed a long-term supplier agreement with Paccar, maker of Kenworth and Peterbilt trucks, and last year was named the sole external engine supplier to Volvo Trucks North America. Such relationships, said Solso, will reduce Cummins’ front-end marketing costs while enabling the company to develop better products.
Sales revenue for all Cummins business units last year was $6.6 billion, about the same as 1999. First half sales were strong but fell 7% in the second half, due mainly to the effects of the North American economic slowdown. Profits were $249 million, down from $356 the previous year. (See "Cummins Posts Fourth Quarter Loss," 1/30/2001)
Sales of its Engine Business Unit were $4 billion, down 4% from 1999, but the company said four of the five market segments in the Engine Business have solid operating performance: Construction, Agriculture and Marine, High Horsepower and Mining, Powercare and Light-duty Automotive.
Profits for Cummins’ Power Generation business unit nearly doubled from 1999, and its filtration business continued to grow and remain profitable despite the declining economy.
“I am confident about the future of Cummins because 88% of our business is profitable,” Solso said. “We are taking steps to fix the rest.”