Cummins, a manufacturer of heavy equipment in Columbus, Indiana, is the largest manufacturer of Class 8 truck engines, claiming a 38.3% market share in 2018 over competitors like Daimler and Volvo/Mack and $23.8 billion in revenue. However, the company noted in its emailed statement that it has been experiencing a steep business downturn.
"Unfortunately, we must do more to reduce costs because the downturn is happening at a sharper pace than we experienced in the previous two cycles," Mills said in an email to the Business Insider.
Cummins' leadership informed shareholders last week of a plan to increase profitability amid the trucking downturn, including continuing investments in fuel-cell and hydrogen-production technologies. It said structural costs would be slashed by $250 million, reaching $300 million by next year.
"We understand this is incredibly difficult for those directly impacted and for all employees across the company," he added. "Our employees are important to the success of our company and necessary actions like this are incredibly tough and disappointing. However, by taking actions now, we can navigate this downturn and emerge stronger when markets return just as we have done in the past."
The measures mentioned by Mills include cuts in discretionary spending across the company, voluntary headcount reductions and efforts to align production with demand.
CEO Tom Linebarger said that the company's operating and financial positions remain strong and it does not plan to cut investment in technologies the company views as key to its future. The company plans to have new technology in traditional and new power trains, he added.
Earlier in May, Cummins announced a $68 million investment plan to expand along the I-65 corridor in Indianapolis, Greenwood and Columbus, including a $33 million investment that would create 75 new jobs at Cummins' global headquarters in Columbus.