A few days ago I blogged about my visit to Cummins’ engine plant just south of Indianapolis, Indiana, where they exclusively make the big diesel engines that power Dodge Ram trucks. These engines are a key part of appeal of Dodge’s Ram series, so much so that the Cummins name is part of the truck name on the sides of the vehicles.
Check out my earlier blog entry if you want a short introduction to what the inside of today’s manufacturing looks like. It is a truly beautiful plant with more sunlight than most modern office buildings. Moreover, it offers a high standard of living to those lucky enough to have jobs there and technology applications and quality controls that are truly impressive. Engine sales of all kinds make up over half of Cummins’ business, with power generation, parts and distribution making up the rest.
On that last blog, I mentioned the article about Cummins from the March 16 Investors Business Daily, titled “Cummins Gains New Thrust from Strong Overseas Sales.” The article shows that American manufacturers are strong competitors on the world stage and that this global viewpoint is strengthening their bottom line. Sales grew 34% in 2004 and 18% last year and return on equity was a remarkable 26% and 33% in the same years. The US part of their business grew by a healthy 11% last year, but international sales leaped by 25%. But it wasn’t always this way. During the severe manufacturing recession that started in 2000 and ran into 2003, Cummins went through what that IBD article describes as “the worst period in its history.” Sales were sluggish and debt was growing. But the economy and the company’s leaders turned it around and is now planning new capital expenditures to increase capacity and fund new products.
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