Cummins Inc. has outlined plans for how it is preparing to weather an expected downturn in business next year — including measures to reduce structural costs by $250 million to $300 million while maintaining investments to position the company for future growth.
During a presentation at the New York Stock Exchange on Thursday, Cummins officials told market analysts that they are prepared for weakening truck markets in North America and India in 2020, as well as other markets that they believe have peaked, declined or may weaken next year, including the North America oil and gas market and the China construction market.
“Most of the markets in which we participate have either peaked or are on their way down.” said Tony Satterthwaite, Cummins President and COO, during the presentation.
Satterthwaite said the Fortune 200 company has “already initiated a number of actions” that he characterized as a “comprehensive company-wide approach” to reduce structural costs by $250 million to $300 million in 2020 and “improve the overall health of the company and prepare us better for when volumes come back.”
“We have adjusted for reduction to demand at our manufacturing facilities, cutting contingent labor, flexing down overall, reducing shifts, reducing overtime,” Satterthwaite said during the presentation. “We’re flexing all discretionary costs down pretty broadly.”
For more on this story, see Friday’s Republic.
