Cummins Inc. is restructuring its engine business, consolidating and streamlining some functions into its global organization.
As the company heads toward its 100th birthday in 2019, Cummins leaders are working to streamline the business, reduce costs and position the Columbus-based company to emerge stronger when international markets recover, spokesman Jon Mills said.
The restructuring, according to Mills, includes:
Moving manufacturing of parts from the engine business to the global corporate supply chain, as well as moving manufacturing engineering and a few other segments there. Mills said this brings the parts area into line with the global area of the company to better serve customers.
Centralizing customer support and product connectivity into one function, so the two will be connected throughout the entire company rather than be in separate business segments. These two areas will be centralized under a global organization. Customer support and telematics within the engine business will largely transition into the new Connected Solutions business led by Tony Satterthwaite.
Centralizing certain aspects of marketing companywide, resulting in more consistency and leverage and align how the company thinks about and executes corporate communications, marketing communications and brand management across the enterprise.
Restructuring remaining portions of the engine business.
Mills said the changes do not signal the engine business — the company’s largest by far of four divisions — is in any way taking a back seat to power generation, components and distribution. All four business segments will remain in place.
Mills described the restructuring as a natural next step in evolution of the company, setting it up for long-term success. Implementation of some of the changes will begin as early as Jan. 1, he said.
Dave Crompton, who has led the engine business since 2014, has announced a new, smaller executive leadership team for the unit, including:
Ed Pence, vice president, high horsepower engine business
Srikanth Padmanabhan, vice president, heavy-, medium- and light-duty engine business
Mike Miller, controller, engine business
Fiona Devan, executive director, global human resources-engine business
Tom Pepin, strategy director and chief of staff, engine business
Melanie Margolin, assistant general counsel-engine business, deputy general counsel Americas
In October, the company reported its third-quarter sales decreased $270 million, about 6 percent, compared with the same period a year earlier, and the company’s full-year revenue forecast had been lowered.
At the same time, Cummins announced plans to cut its professional workforce by 2,000 worldwide because of persistent declines in international markets. The company said it planned to have notices out to affected employees from the October announcement by today.
Mills said the company knows that the new restructuring plan will result in some additional redundancies being found in jobs that will likely result in staffing cutbacks.
However, the company doesn’t have a specific number to reach in cost savings but is more focused on improving employee performance and increasing opportunities for collaboration within the company, Mills said.
Some of the changes have been considered since the Columbus-based diesel engine maker’s October earnings report, Mills said, while others have been on the table for a longer period.
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Cummins stock closed at $89.92 per share Wednesday, the first time it had closed under $90 in the past year.
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