Follow The Republic:
A Cummins executive said it will be the end of September before company officials decide where to build new ISB 6.7-liter engines that Illinois-based Navistar International is ordering for some of its medium-sized trucks and school buses.
Production of prototype and test engines for use in the Navistar vehicles has been done at Cummins’ Rocky Mount, N.C. plant already, but Cummins’ MidRange Engine Plant in Columbus is also in the running for some of the work once production starts later this year, said Lori Thompson, vice president of Cummins’ bus and truck business.
Ramped-up production of the medium-sized truck engines is scheduled to begin Dec. 13 at a site to be determined, and production of the school bus engines for Navistar will start in January, she said.
“We are really excited about this expansion of our relationship with Navistar,” Thompson said.
Last year, Navistar began outfitting its heavy-duty trucks with 15-liter engines from Cummins.
Both the Rocky Mount, N.C., plant and the Columbus MidRange plant are operating at just 69 percent of daily capacity, so both factories have room to make more engines for a new wave of Navistar orders, Thompson said. She said the number of new engines to be ordered by Navistar depends on its truck and bus sales going forward, and the Illinois-based manufacturer hasn’t committed to a guaranteed level of purchases.
At this stage, Cummins has no plans to hire additional workers to meet the production demands, she said.
“Initially we will not need to add staffing,” Thompson said. “Once production starts in the December time frame, it will be a ramp-up situation, and we can monitor demand and adjust accordingly.”
Navistar International said last week that it will turn to Cummins to produce an environmentally friendly truck engine in a bid to boost its lagging sales and declining market share, particularly in the medium-sized truck segment. Customers who buy the company’s medium-sized trucks or school buses will now be able to order the Cummins ISB 6.7-liter as an option instead of having to get a different style of engine that Navistar makes itself.
The Cummins’ engine uses SCR (selective catalytic reduction) technology to reduce emissions and meet new federal highway standards aimed at reducing vehicle pollution.
Navistar said it hasn’t
abandoned long-running plans to make its own SCR engines for medium-duty vehicles such as delivery trucks and buses, but the company said its engines won’t be ready for early 2014 as it had earlier hoped.
Navistar does offer its own MaxxForce engines using exhaust gas recirculation, or EGR, in medium trucks; but many customers prefer selective catalytic reduction engines.
It’s hard to project the potential volume of Navistar’s future orders, Thompson said.
“It will be a choice of the customers. We do have a lot of capacity, and we should be able to gear up to make whatever they demand,” she said.
Thompson said Cummins has been consulting with Navistar to develop the new project for several months. She said Cummins’ next step will be to get enough raw materials in its pipeline to build more engines for Navistar, but she said that is a routine problem that should not present any significant hurdles.
A week ago, Navistar said the initial customer response to the availability of Cummins’ ISB 6.7-liter engines had been encouraging, and the company thinks sales of trucks with the Cummins engines in them will start to have an impact on its revenues in the first quarter of 2014.
In the third quarter, Navistar reported a loss of $247 million, or $3.06 per share, compared with a profit of $84 million, or $1.22 per share, a year earlier. Revenue for the quarter was $2.86 billion, down 12 percent from the previous year. Medium-duty truck sales declined 2,400 units compared with last year, the company said in an earnings call with analysts last week.
Think your friends should see this? Share it with them!
Note: All comments left on our sites are first reviewed by an automated comment moderation system. Your comment may take up to 5 minutes to appear. If for any reason your comment can not be approved you will receive an email from this system with a detailed explanation.
All content copyright ©2013 The Republic, a division of Home News Enterprises unless otherwise noted.