Electrifying news: Cummins chooses city as HQ for new business segment

INDIANAPOLIS — Cummins Inc. is strengthening its commitment to Columbus, where the company was founded 100 years ago, and where it operates its global headquarters.

The Fortune 160 company will locate the new headquarters of its new Electrified Power business segment at its Columbus Engine Plant, also known as Plant One, at 500 Central Ave. CEP will serve as the corporate hub and primary North American manufacturing center for Electrified Power.

The $33 million investment in the 1.6-million-square-foot facility includes $30 million worth of machinery and equipment, and will create 75 new jobs by 2021.

“Where it all began for diesel, it’s all going to begin for electric,” Cummins Chairman and CEO Tom Linebarger said during Thursday afternoon’s announcement event in the company’s pavilion at the Indianapolis Motor Speedway — during Cummins Day for its employees at the track.

[sc:text-divider text-divider-title=”Story continues below gallery” ]Click here to purchase photos from this gallery

Indiana Gov. Eric Holcomb, Columbus Mayor Jim Lienhoop, Greenwood Mayor Mark Myers and Indianapolis Mayor Joe Hogsett were among elected city and state officials present for the event. Greenwood and Indianapolis also are benefiting from additional company investments. Greenwood is getting a new facility to serve as the hub for digital and information technology employees, and Cummins is building out additional workforce space in its Distribution Business headquarters in downtown Indianapolis, and will occupy additional space in the Salesforce Tower.

Founded in 1919, Cummins has been known historically as a maker of diesel engines for various types of trucks. Over the last few decades, though, the company has diversified its product offerings, which now include generator sets, turbochargers and engines for trains. Its latest step in diversification was the formal launch of the Electrified Power business last year.

“The reason we did that is we felt some number of our applications that we serve with diesel today will be served by electric powertrains in the future,” Linebarger told The Republic Monday during an interview.

He amplified that point during Tuesday’s annual shareholders meeting.

“Diesel engines have been a leader in our industry for a hundred years, but if we go out a hundred years, they will not be the product of choice in all of our markets,” he told shareholders.

The new business segment will launch its first commercial product later this year, an electrified powertrain in the GILLIG zero-emissions city transit buses, which will launch in the fourth quarter of this year.

Linebarger said Columbus has supported Cummins since the founding of the company, and although other locations for the Electrified Power headquarters were considered, after about a year-and-a-half they decided the Columbus Engine Plant was the best fit.

“What we decided is that the workforce that we have there … those are transferable skills and we can train the rest. What’s more is we have really good space there. We have good workers and we have good space at Columbus Engine Plant,” Linebarger said.

Throughout this year, new equipment will be installed at the engine plant to get a production line ready to manufacture. Some employees have already been hired, Linebarger said.

The 75 new jobs for Electrified Power will pay an average of $62,000, Linebarger said, and current workers on production lines will have the opportunity to apply for the jobs. The segment likely will have more employees in the future, but Linebarger said it’s too early to know how many.

Cummins is receiving up to $950,000 in conditional tax credits and up to $100,000 in training grants from the Indiana Economic Development Corp., the IEDC said. Also, the company will be asking the Columbus City Council at an upcoming meeting for a tax abatement on the new machinery and equipment that’s being installed, Lienhoop said.

Columbus’ mayor said it’s gratifying that Cummins chose the city for its Electrified Power hub and manufacturing center, and that the city will get to share in that new effort.

“We’ve tried to create Columbus as a community that welcomes business, that has a good climate for business, so it’s affirmation that we’re successful in that regard,” Linebarger said.

Electrification ramp-up

Electrified Power has been in a ramp-up process that has involved several acquisitions of companies, to bring their technology and skills with electrification into the fold, along with the company designing its own products for launch.

Cummins’ build-up of the Electrified Power segment has included:

An electrified power partnership with GILLIG to power GILLIG zero-emissions transit buses, announced Oct. 9, 2017.

The purchase of Brammo Inc., which designs and develops low-voltage battery packs for mobile and stationary applications. Announced Oct. 16, 2017.

The purchase of Johnson Matthey’s United Kingdom-based automotive battery systems business, which specializes in high-voltage, automotive-grade battery systems for electric and hybrid vehicles. Announced Jan. 31, 2018.

The acquisition of Silicon Valley-based Efficient Drivetrains Inc., which designs and produces hybrid and fully electric power solutions for commercial markets. Announced July 2, 2018.

An agreement with KAMAZ, a Russian brand of trucks and engines, to develop electric powertrains for a new product line of KAMAZ battery-powered vehicles. Announced Sept. 20, 2018.

A collaboration with Hyundai Construction Equipment to design and develop electric-powered mini excavators. Announced Oct. 29, 2018.

The delivery of eight Cummins-powered all-electric vehicles to the United States Postal Service for use in the California cities of Fresno and Stockton, announced in March, as part of a pilot program intended to eliminate vehicle emissions and reduce fuel and maintenance costs.

Electrified powertrains in shorter-range pickup and delivery trucks will be among the next products to launch in the near future, Linebarger said previously.

The governor lauded Cummins for its century of growth, vision, forward thinking and innovation.

“You have come to symbolize what I would view as Indiana’s pace car, if you will, and really set that pace and set that standard for so many other companies in terms of your commitment to the community and setting an example as a corporate leader,” Holcomb said.

[sc:pullout-title pullout-title=”Powering up” ][sc:pullout-text-begin]

Cummins Inc. announced on June 14, 2017 it intended to introduce fully electric powertrains in 2019. Since then, the company has worked to prepare itself for this new business segment.

Milestones include:

Aug 29, 2017: Unveils a demo of a fully electrified heavy-duty truck at its Columbus headquarters. The truck, called Aeos, can go 100 miles on a single charge.

Oct. 10, 2017: Announces a partnership with California-based bus manufacturer Gillig LLC, which will be the first company to produce buses using Cummins’ electric powertrains.

Oct. 16, 2017: Acquires Oregon-based Brammo Inc., a maker of electric motors and batteries.

Jan. 31, 2018: Acquires England-based Johnson Matthey Battery Systems, the automotive battery systems division of Johnson Matthey PIc.

Feb. 7, 2018: Announces that its electrification business will become the company’s fifth reporting segment.

July 2, 2018: Acquires California-based Efficient Drivetrains Inc., which offers electric and hybrid powertrains, prototyping and other services.

Sept. 19, 2018: Debuts a fully electric Cummins-powered truck by Dutch truck maker DAF Trucks N.V. DAF plans to begin field-testing these vehicles in 2019.

Oct. 18, 2018: Partnership announced with the Battery Innovation Center (BIC) in southwest Indiana to receive support in the testing and validation of its next generation battery systems and customized training for its workforce. Acquisition of key battery expertise spans from Oregon to the United Kingdom, as well as the opening of the company’s first Silicon Valley hub for electrified power system development and prototyping.

Oct. 29, 2018: Releases a prototype of a fully electric mini excavator in partnership with Hyundai Construction Equipment.

March 4: Delivers eight Cummins-powered all-electric vehicles to the United States Postal Service (USPS). The eight fully-electric Cummins PowerDrive equipped vans are expected to eliminate vehicle emissions and reduce fuel and maintenance costs. The pilot program, made possible by a grant from the California Air Resources Board to the San Joaquin Valley Air Pollution Control District (SJVAPCD) and administered by CALSTART, places the zero-emission vehicles in Fresno and Stockton. Cummins will also provide operator training, vehicle support and data collection to support the program.

May 16: Announces Columbus will be the primary North American manufacturing center and corporate hub for the Electrified Power Business with a significant presence at the Columbus Engine Plant. The announcement represents a $33 million investment in Columbus with a significant portion going toward upgrading and equipping the 1.6-million-square-foot Columbus Engine Plant at 500 Central Ave. Plans are to add up to 75 new jobs by the end of 2021.

Fourth quarter 2019: Cummins plans to launch its first commercial product, an electrified powertrain in GILLIG zero-emissions transit buses.

Source: Cummins

[sc:pullout-text-end][sc:pullout-title pullout-title=”About Cummins” ][sc:pullout-text-begin]

Cummins Inc.

Products: Designs, manufactures, sells and services diesel and alternative-fuel engines and electrical generator sets, and related components and technology.

Headquarters: Columbus, Indiana

Founded: 1919, by mechanic Clessie Cummins and banker William G. Irwin

2018 revenue: $23.8 billion

2018 profit: $2.1 billion

Employees: 62,000 worldwide, more than 10,000 of whom work in Indiana

Source: Cummins

[sc:pullout-text-end][sc:pullout-title pullout-title=”Stock price” ][sc:pullout-text-begin]

Cummins Inc.’s stock closed at $162.51 Thursday, an increase of $1.09 from Wednesday’s close of $161.42.

[sc:pullout-text-end][sc:pullout-title pullout-title=”About the Electrified HQ” ][sc:pullout-text-begin]

Columbus Engine Plant, a 1.6-million-square-foot facility at 500 Central Ave., will serve as the corporate hub and North American manufacturing center for its Electrified Power business segment, which formally launched in 2018.

The $33 million investment includes $30 million worth of new machinery and equipment, and 75 new jobs will be added by 2021 that will pay an average of $62,000.

Hiring and work to prepare the production line have begun. The company will launch its first commercial product in the fourth quarter of this year.