Cummins Inc. plans to take a 50% stake in a division of dealership giant Rush Enterprises, creating a joint venture between the two companies that will produce natural gas fuel delivery systems for commercial vehicles in North America.
On Tuesday, Cummins, which is headquartered in Columbus and employs about 8,000 people in the area, announced its intent to acquire a 50% equity interest in Momentum Fuel Technologies, which manufactures compressed natural gas fuel systems at a facility in Texas.
Formed in 2015, Momentum Fuel Technologies is a division of Rush Enterprises, which says it owns and operates the largest network of commercial vehicle dealerships in the United States, with more than 100 locations in 22 states selling a range of truck and bus brands, including Peterbilt, International, Hino, Isuzu, Ford, FUSO, IC Bus and Blue Bird.
The proposed transaction is expected to close the year, Cummins said. The terms of the deal were not disclosed.
“This collaboration shows Cummins’ continued commitment to natural gas powertrains,” said Srikanth Padmanabhan, president of the engine business at Cummins, in a statement. “This partnership will improve customers service for both (compressed natural gas) and (renewable natural gas) through an improved support network. We are thrilled to expand our network of clean and reliable power solutions.”
The proposed deal is the latest in a series of joint ventures and acquisitions by Cummins involving natural gas, hydrogen or electric power in recent years.
The joint venture also comes as the diesel industry finds itself at a crossroads of sorts, as alternative fuel technology grows in viability and concerns about climate change continue to reshape how companies and policy makers think about energy consumption.
In a statement on the proposed acquisition and joint venture with Cummins, Rush Enterprises Chairman, CEO and President W.M. “Rusty” Rush said the “immediate environmental benefits” of compressed and renewable natural gas, along with regulatory requirements, “will drive growth in natural gas vehicles for the foreseeable future.”
Currently, the Columbus-based company says its research activities are focused on, among other things, the development of new products to meet future emission standards around the world and improvements in fuel economy performance of diesel and natural gas powered engines, according to the company’s first quarter 2021 report.
Last year, Cummins announced plans to open a new facility in Germany that will initially make fuel cell systems for hydrogen-powered trains made by French rail manufacturer Alstom.
Cummins also announced last year that it is working with Navistar International Corp. to develop a Class 8 truck powered by hydrogen fuel and cells and closed on a joint venture with Dutch company NPROXX to provide hydrogen and compressed natural gas storage products for on-highway and rail applications.
“The way we see it is that the diesel engine is going to have a long life ahead of it, but it will have a tail,” Amy Adams, vice president of fuel cell and hydrogen technologies at Cummins, told The Republic in a previous interview. “At some point, demand won’t go up, and there will be this energy transition to other technologies. Right now, there’s natural gas in the mix, there are hybrids, and there’s battery electric and there’s fuel cell electric.”
