Cummins Inc. has said it will restore at the end of this month the salaries and hours of U.S. employees that were temporarily cut during the early weeks of the pandemic.
In April, Cummins Chairman and CEO Tom Linebarger took a 50% reduction in salary, director compensation was reduced 25% and all other employees in the United States saw a 10% to 25% drop in salaries and reduced hours, the company said then.
The reductions were intended to be a temporary measure due to lower demand and customer shutdowns in several countries related to the COVID-19 pandemic, the company said.
Company spokesman Jon Mills was unable to say precisely how many U.S. employees the move would impact, but said the Columbus-based company employs more than 25,000 employees in the United States, including 10,000 in Indiana.
“Affected non-exempt employees will return to full-time hours and pay on Monday, Sept. 28, 2020, and exempt employees on Oct. 1, 2020,” he said.
Exempt employees are generally salaried employees, while non-exempt employees typically get paid by the hour, Mills said.
The move to restore employee pay and hours comes roughly two months after the company reported second-quarter revenue declined 38% compared to the same quarter last year, which company officials described as the “most severe decline in quarterly sales” in the company’s history.
However, Linebarger told financial analysts in July that the company still delivered “reasonable profitability given the magnitude of the sales decline” and expressed confidence that Cummins will weather the economic storm caused by the pandemic.
“When demand returns, which it will, Cummins will be in a strong position to deliver the products and services that will drive our customers’ success and deliver even stronger financial performance,” Linebarger said in July.
Company officials said during the company’s second-quarter conference call in July that Cummins expects third-quarter revenue to improve, but still anticipate uncertain global market conditions at least for the rest of the year.
The pace of economic recovery and the level of demand for Cummins products may “differ from region to region” and “change based on government actions both to control the spread of COVID-19 and/or to stimulate their economies to build more business and consumer confidence” and “depends a lot on how sick everybody gets,” Linebarger said in July.
