Cummins To Cut 800 'Professional' Jobs By End Of Feb
January 13 2009 - 9:05AM
Dow Jones News
DOW JONES NEWSWIRES
Cummins Inc. (CMI), following through on a warning of further
cost cuts, said it will eliminate at least 800 "professional" jobs
by the end of February and is freezing salaries for the year.
The engine maker, which is suffering from slumping demand
because of the woes affecting the global automobile industry, also
said it will cut company officers' 2009 salaries by 10%.
Combined with job cuts announced last month, Cummins is reducing
its professional workforce by more than 1,400 people, or 10%. The
company has reduced its hourly workforce by more than 600 and cut
approximately 2,500 contingent workers. As part of the latest cuts,
Cummins will offer a second round of early retirement packages to
certain U.S. professional employees.
"It is unfortunate that after five straight years of record
performance and greatly improved business fundamentals we are being
forced to take these difficult actions," said Chairman and Chief
Executive Tim Solso. "While these steps are very painful, they are
necessary to keep Cummins competitive through this global recession
so we can emerge a stronger company when the economy and our
markets recover."
Cummins warned a month ago it was planning more cost cuts, as
Solso said, "We do not expect market conditions to improve
significantly in the immediate future." The company earlier in
December announced a work-force cut of at least 3%, on top of
already-taken steps that included temporary plant shutdowns,
cutting temporary employees and enacting a hiring freeze.
At that time, Cummins reduced its 2008 forecast amid slumping
fourth-quarter demand, particularly the hard-hit North American and
European truck and construction markets. For months, auto-parts
suppliers have felt the impact of U.S. auto makers' efforts to pare
down swollen inventories and turn around their North American
operations.
Cummins shares closed Monday at $26.18 and there was no
premarket trading. The stock has lost two-thirds of its value the
past five months.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com
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