Cummins Engine Posts $116.9-Million Deficit

Cummins Engine Co., moving to cut costs and improve profitability, unveiled plans to consolidate its worldwide operations and reduce its work force by 17% over the next two years.

To cover the restructuring, Cummins, a Columbus, Ind.-based maker of diesel engines, took a $135-million pretax charge in the third quarter, which left the company with a net loss of $116.9 million on revenue of $544.6 million.

A year earlier Cummins lost $8.5 million on revenue of $480.7 million, also in part because of restructuring charges.

Cummins’ goal is to reduce its worldwide work force to 15,000 from its current 18,000 over the next two years, with about 1,500 of the reductions at facilities in southern Indiana, said Cummins spokesman Randall Tucker.

Tucker said that the company hopes to achieve the cutbacks mainly by offering early retirement incentives and by offering workers other jobs in new businesses Cummins might enter.

In its financial report, Cummins said it had expected a loss from operations in the latest quarter.