Trade Agreements Offer Benefits for U.S. Employers and Employees

Global trade brings benefits to American workers and consumers.

The following op-ed was authored by Tom Linebarger, Chairman and CEO of Cummins Inc. and Chair of the Business Roundtable International Engagement Committee; and Mike Bertsche, the President & CEO of Camcraft.

After years of negotiations, the 12-nation trade deal known as the Trans-Pacific Partnership is facing its toughest challenge yet: election-year politics.

The fact is, TPP and U.S. trade agreements overall, offer tremendous benefits for U.S. employers and employees alike. Consider a few numbers: trade-related jobs grew 3.1 times faster than overall employment between 2004 and 2014, and nearly half of all U.S. goods exports to the world in 2014 went to just the 20 countries that the United States has free trade agreements with.

Unfortunately, the facts are being distorted by rhetoric on the presidential campaign trail, with candidates alleging that U.S. trade agreements like NAFTA have suppressed wages and cost American jobs. In fact, U.S. trade with NAFTA partners Canada and Mexico supports nearly 14 million U.S. jobs, according to a U.S. Chamber of Commerce study.

Moreover, contrary to the campaign rhetoric, U.S. jobs tied to trade also pay more than other jobs. According to a report by the Commerce Department, manufacturing jobs pay 18% more on average when tied to exports. The report also notes that foreign tariffs — like those TPP will eliminate — reduce the earnings of U.S. workers by as much as 12%.

We have to put politics aside and recognize TPP as an opportunity to support U.S. economic growth and high-quality American jobs.

The agreement will create opportunities to sell more U.S. goods and services to 11 Asia-Pacific countries. This region is already critical to America’s exports: TPP nations accounted for some 45% of all U.S. exported goods in 2014.

All told, TPP will eliminate more than 18,000 foreign tariffs on U.S. goods, opening markets to U.S. export growth. And because five TPP countries currently lack trade agreements with the United States, the deal will also open entirely new markets for American firms.

Just as important, the trade pact will put in place strong, enforceable rules for fair trade that actually improve on NAFTA and other past U.S. trade agreements. TPP is the first modern trade agreement that addresses the realities of our interconnected global marketplace. For example, it will establish intellectual property protections for American companies and inventors and raise foreign labor and environmental standards. It also will discourage other countries from using government procurement and state-owned companies to put American firms and workers at a disadvantage.

In short, TPP will open access to millions of customers for U.S. goods and services while boosting foreign investment throughout the United States. The resulting U.S. exports and international investment here will expand U.S. economic growth and jobs.

Watch Now: How The TPP Will Benefit The U.S. Economy

 

To understand how trade supports companies of all sizes, consider the relationship between our two companies. Headquartered in Columbus, Indiana, Cummins’ 25,000 U.S. employees design, manufacture and distribute engines and related products that are powered by diesel and natural gas. In 2014, we exported approximately $3 billion in U.S.-made products.

These foreign sales don’t just benefit Cummins and its U.S. employees; they also help our 2,500 domestic suppliers, such as Camcraft. Camcraft is a small company based in Illinois. Its 330 employees manufacture high-precision components used in Cummins engines.

As leaders of manufacturing companies large and small, we know how important trade and U.S. trade agreements like TPP are to the success of our companies and to businesses and farms across the United States.

The relationship between our two companies shows how exports ripple through the U.S. economy in a supply chain generating billions of dollars in revenue and thousands of jobs.

Previous U.S. trade pacts offer evidence: America’s current trade partners purchase 13 times as many U.S. goods per capita than countries with which we don’t have trade agreements. Those purchases support U.S. jobs.

When Congress takes up TPP, members should look beyond the divisive campaign rhetoric and seize the opportunity to support growth and jobs in their home states. By approving TPP this year, Congress will enable American workers, businesses and farmers to sell more in international markets — reaping the benefits before our foreign competitors do.

Editor's Note: The op-ed above also appeared in the following publications

The Indianapolis StarTrans-Pacific Partnership is good for U.S. workers

The New York Daily NewsTPP is good for American manufacturers and the people they employ

The Post and Courier - Election Rhetoric Sells Trade Agreements Short

Tom Linebarger Chairman and CEO

Tom Linebarger

Tom Linebarger became Chairman and CEO of Cummins Inc., the largest independent maker of diesel engines and related products in the world, on January 1, 2012.  Prior to becoming Chairman and CEO, he served as President and COO from 2008 to 2011, Executive Vice President and President, Power Generation Business from 2003 to 2008, Vice President and Chief Financial Officer from 2000 to 2003, and Vice President, Supply Chain Management from 1998 to 2000.

Five ways Cummins worked to improve the environment in 2017

Cummins leaders meet with EDP Renewables officials at Meadow Lake Farm in northwest Indiana earlier in 2017.
Cummins leaders meet with EDP Renewables officials at Meadow Lake Farm in northwest Indiana earlier in 2017.

2nd in a series

In 2017, Cummins took a number of steps outside product development to reduce its carbon footprint and improve the environment. Here’s a quick look at five key ones:

 

1. PROMOTING LOW-CARBON ENERGY

In August of 2017, Cummins announced it had entered into an agreement enabling a northwest Indiana (U.S.A.) wind farm to expand so it can produce enough low-carbon power for the grid to offset the amount of electricity the company uses at its Indiana facilities. Under its 15-year Virtual Power Purchase Agreement (VPPA) with EDP Renewables North America, Cummins guarantees a certain fixed price for the energy the wind farm expansion sells to the grid. The company, in turn, receives renewable energy certificates it can use in calculating Cummins' environmental impact.


 

Cummins water logo
Cummins water strategy has three basic components.

2. ESTABLISHING A NEW WATER GOAL

Cummins used World Water Day, March 22, 2017, to announce a new 2020 water reduction goal of 50 percent, having cut water use 42 percent, adjusted by labor hours, since 2010. In 2016, the company’s absolute water use fell from 947 million gallons across the company to 934 million gallons. Just three years ago (2014) the company used 972 million gallons. The savings have come from multiple projects at Cummins facilities across the globe.

 

Soot free bus partnership signing ceremony
Antonio Leitao (center), Vice President of the Europe Area Business Organization at Cummins, joins other executives in Paris, France, signing the pledge to help target cities improve their air quality.

3. MAKING CLEAN DIESEL ENGINES AVAILABLE AROUND THE WORLD

In September 2017, Cummins joined three other global manufacturers pledging to help 20 large cities around the world address air quality and climate change. The companies will make available sales and service for buses and bus engines with low emissions technology no later than 2018 in the target cities. Nearly all of the cities benefitting from the partnership are in countries that do not have rigorous emissions regulations. Other companies making the pledge include Volvo Buses, Scania Buses and Coaches, and BYD Electric Buses.

 

Gateway panel
A potential supplier makes a presentation to Cummins’ leaders in the United Kingdom in March, 2017, as part of the Environmental Gateway project.

4. DEVELOPING NEW IDEAS TO REDUCE OUR CARBON FOOTPRINT

As part of the Environmental Gateway project, Cummins leaders in the U.K. on March 2, 2017, heard 28 finalists pitch their best ideas for shrinking the company’s carbon footprint and meeting Cummins’ environmental goals. About 100 suppliers and others submitted ideas as part of the initiative, which was loosely modeled on television shows where entrepreneurs pitch their best ideas to a panel of investors. Sponsors say the Gateway was a great way to spur innovation. Twelve winning ideas were selected and are now being tested in the U.K. The initiative has also spread to other locations around Cummins including the United States.

 

Jamestown Engine Plant electrician Fred Gable inspects the solar panel connections at
Jamestown Engine Plant electrician Fred Gable inspects the solar panel connections at Cummins’ solar array at Jamestown, New York (U.S.A.). The plant is one of the locations where the company is adding renewables to its energy mix.
 

5. IMPLEMENTING PROGRAMS TO SAVE ENERGY AT CUMMINS FACILITIES

Cummins’ Jamestown Engine Plant in Jamestown New York (U.S.A.) showcased in September 2017 its latest energy-saving initiative, a $47 million block machining line that utilizes on-demand hydraulics, coolant and pneumatics to reduce power consumption as it produces the company’s high efficiency diesel and natural gas heavy duty engines. The line was completed in May, and is merely the most recent energy-saving investment at the plant.  The plant in recent years has also replaced nearly 3,000 fluorescent lights with advanced LED lighting and a Wi-Fi-enabled control system that can automatically shut the lights off in parts of the plant not in use. The plant also has a solar array on its roof.

 

Tom Linebarger Chairman and CEO

Tom Linebarger

Tom Linebarger became Chairman and CEO of Cummins Inc., the largest independent maker of diesel engines and related products in the world, on January 1, 2012.  Prior to becoming Chairman and CEO, he served as President and COO from 2008 to 2011, Executive Vice President and President, Power Generation Business from 2003 to 2008, Vice President and Chief Financial Officer from 2000 to 2003, and Vice President, Supply Chain Management from 1998 to 2000.

Five 2017 milestones to helping customers reduce their carbon footprint

A new Cummins X15 engine rolls off the assembly line at the company’s Jamestown Engine Plant in Jamestown, New York (U.S.A.) in 2017.

1st in a series

 

In 2017, Cummins hit a number of important milestones in producing the cleanest, most fuel efficient products. Here’s a quick look at five key ones:

 

1. The start of production of the X15 engine

In early 2017, full production started on Cummins’ new X15 engines featuring a host of advances designed to improve fuel efficiency and performance as well as uptime for long haul use. Customers will see up to 20 percent better fuel economy and 40 percent lower maintenance costs compared to Cummins’ 2010 ISX15 engines. The new X15 exceeds U.S. EPA 2017 greenhouse gas (GHG) and fuel efficiency standards.

The Cummins team takes a break during 2017 validation testing near Interstate 70 in Central Utah.
The Cummins team takes a break during 2017 validation testing near Interstate 70 in Central Utah.

2. The completion of final testing of the X12 engine

Cummins engineers in 2017 completed validation testing on the new X12 engine, clearing the way for full production to start for North American markets in 2018. The X12 has a sculptured block design that removes unnecessary mass while retaining rigidity for regional and urban haul applications. The Single Module aftertreatment system eliminates up to 40 percent of the aftertreatment weight. The engine enables higher payloads and greater productivity.

Metro, the Los Angeles County transportation system, awarded Cummins a $26.5 million contract in June 2017 to begin supplying its new near-zero L9N engines. The engines will replace those in Metro’s current CNG fleet (Image courtesy of Metro© 2018 LACMTA).
Metro, the Los Angeles County transportation system, awarded Cummins a $26.5 million contract in June 2017 to begin supplying its new near-zero L9N engines. The engines will replace those in Metro’s current CNG fleet. (Image courtesy of Metro© 2018 LACMTA).

3. The launch of Cummins Westport’s L9N and ISX12N Natural Gas Engines

Cummins Westport unveiled in May, 2017, near zero emission natural gas engines for use in transit buses, local delivery and other vehicles. The engines’ emissions for Nitrogen Oxide (NOx), a key contributor to smog, will be certified at 90 percent lower than the current EPA NOx limit. They will also certify well below the EPA’s 2017 GHG emission requirements. The Los Angeles County Metro Transportation Authority will begin taking delivery of up to 395 of the L9N engines in early 2018, potentially pairing them with renewable natural gas in its bid to have a zero emissions fleet by 2030.

Siemens’ new Charger Clean Diesel-Electric Locomotives, powered by Cummins QSK95 engines, are now in service across the United States.
Siemens’ new Charger Clean Diesel-Electric Locomotives, powered by Cummins QSK95 engines, are now in service across the United States (photo courtesy of Siemens).

4. Cummins powers Charger locomotives across the U.S.

Cummins’ QSK95 diesel engine began active service in Siemens’ new Charger locomotives in California, Illinois, Michigan, Missouri and Wisconsin starting in the third quarter of 2017. The Charger is the first high-speed passenger locomotive to receive Tier 4 emissions certification from the U.S. Environmental Protection Agency. The QSK95’s integrated Selective Catalytic Reduction aftertreatment and the company’s latest Modular Common Rail fuel system enable the locomotive to reach top speeds of over 125 miles-per-hour while meeting the most stringent emissions regulations.

Anything Scout, an Ames, Iowa (U.S.A.) company, has seen significant fuel efficiency gains using the R2.8 Turbo Diesel to repower a classic Scout.
Anything Scout, an Ames, Iowa (U.S.A.) company, has seen significant fuel efficiency gains using the R2.8 Turbo Diesel to repower a classic Scout.

5. Crate engines: a cleaner option for enthusiasts

Cummins Repower began offering in September, 2017, the R2.8 Turbo Diesel as a crate engine, providing truck enthusiasts a powerful alternative for their older, iconic or sentimental projects, and a cleaner and more fuel efficient option, too. Typically, the company’s engines are sold to truck manufacturers or truck fleets in large numbers. Cummins Repower gives customers the ability to purchase as few as one. The new engines are cleaner and more fuel efficient than a restored engine, even an old Cummins engine rescued from a junkyard.

Tom Linebarger Chairman and CEO

Tom Linebarger

Tom Linebarger became Chairman and CEO of Cummins Inc., the largest independent maker of diesel engines and related products in the world, on January 1, 2012.  Prior to becoming Chairman and CEO, he served as President and COO from 2008 to 2011, Executive Vice President and President, Power Generation Business from 2003 to 2008, Vice President and Chief Financial Officer from 2000 to 2003, and Vice President, Supply Chain Management from 1998 to 2000.

Five Things About Electrification You'll Only Hear from Cummins

Cummins AEOS all-electric concept truck
Cummins earlier this year unveiled AEOS, the company’s all-electric concept truck. AEOS will help Cummins explore the potential for electric powertrains.

Cummins offers a broad portfolio of products to help customers find the right solution to their power needs. You're going to hear a lot about electrification and trucks in coming days.

Here are five things to remember:

1.WHILE ELECTRIFICATION HAS TREMENDOUS PROMISE, IT’S NOT THE ANSWER FOR EVERYONE RIGHT NOW

That’s why Cummins has pledged to first bring to market an all-electric powertrain for buses and delivery vehicles by 2019. We believe electric vehicles make the most sense in urban areas where the drive ranges are shorter and the vehicles can more easily be recharged. Many cities around the world are looking at electrification as a means to reduce pollution and greenhouse gases (GHGs).

That’s not to say electrification couldn’t someday play a role in long haul trucking. AEOS, the concept electric heavy-duty truck Cummins unveiled in 2017, will help us learn about electrification’s potential with larger vehicles traveling greater distances.

2. IT TAKES MORE THAN AN EXTENSION CORD TO KEEP AN ELECTRIC TRUCK GOING 

There are still a number of challenges facing electrification in trucking. AEOS, for example, can go 100 miles on a single charge. That won’t get you far when it comes to long haul trucking.

Charging AEOS isn’t as easy as plugging it into the nearest outlet, either. It takes an hour to charge when plugged into a 140 kW charging station, although by 2020 advances in batteries are expected to shrink charging time to about 20 minutes. There also isn’t the service infrastructure that exists for diesel or even natural gas.

You could increase the size of the battery, but it would take about 19,000 pounds of battery to go 600 miles on a single charge. That would take a pretty big chunk out of your payload. 

3. ELECTRIFICATION DOES NOT SPELL THE END OF DIESEL OR OTHER FORMS OF ENERGY ANYTIME SOON

About 75 percent of the trucks on the road today are powered by diesel engines, including more than 90 percent of the long haul trucks. Just based on sheer volume, it’s going to take years before anything replaces that many diesel trucks, especially when you consider the relatively high cost of new technologies early in development.

In addition, diesel fuel is the most energy dense liquid fuel available and advances in engines, emissions control technology and cleaner diesel fuels have led to some remarkable environmental gains. In the past 25 years, for example, there’s been a 95 percent reduction in nitrogen oxide (NOx) emissions, a key contributor to smog. New engines like Cummins’ X12 and X15 diesel engines are also seeing significant gains in fuel economy, which translates into GHG reductions.

Diesel is also proving to be a good platform for hybrid powertrains, including the use of electrification.

As customers adopt different power solutions for different applications, Cummins is uniquely prepared to help manage their fleets because of our expertise in a range of power solutions and our global service and support network. 

4. INFRASTRUCTURE MATTERS

Part of bringing any new technology to market is having the infrastructure to produce and service it. Cummins has been making truck engines for nearly 100 years and we’ve been working with electrification for decades. The company does business in approximately 190 countries and territories and its customer service and support network is unmatched.

When power solutions are economically viable, Cummins brings them to its customers. We will continue to do the same with electrification. The company has already brought things like stop-start technology to our bus engines. Cummins has the people and facilities to develop its capabilities in all the key subsystems and components that are critical to electrified and hybrid power systems.

The company’s recent acquisition of Brammo, which designs and develops battery packs for mobile and stationary applications, will help accelerate Cummins’ capability development in battery systems.

5. ONLY CUMMINS IS POSITIONED TO HELP CUSTOMERS PICK THE ENERGY SOLUTION THAT’S RIGHT FOR THEM

Every customer’s situation is a little different. At Cummins, we want to offer the right technology at the right time and in the right place. That could be our clean diesel engines powering long haul trucks, our near zero natural gas engines powering major urban transit systems at emissions levels below EPA standards, or our diesel-electric hybrids powering locomotives around the U.S.

The bottom line: customers can depend on Cummins to help them find the option that works best for them. Once we find the right solution, we have the global service and support network to keep them up and running anywhere in the world at any time – something that is unique to Cummins.

Tom Linebarger Chairman and CEO

Tom Linebarger

Tom Linebarger became Chairman and CEO of Cummins Inc., the largest independent maker of diesel engines and related products in the world, on January 1, 2012.  Prior to becoming Chairman and CEO, he served as President and COO from 2008 to 2011, Executive Vice President and President, Power Generation Business from 2003 to 2008, Vice President and Chief Financial Officer from 2000 to 2003, and Vice President, Supply Chain Management from 1998 to 2000.

Cummins Working to Power Hurricane Victims in Florida and Puerto Rico

Cummins generators are helping power the Puerto Rico Convention Center in San Juan, which is functioning both as a shelter and the command center for the U.S. Federal Emergency Management Agency.

Cummins employees have been working to bring power to storm-ravaged areas of Florida and Puerto Rico since the first of two hurricanes began striking parts of the Caribbean last month.

While the storm response has stabilized in Florida, the company is actively working to help bring electricity to key parts of Puerto Rico, where roughly 80 percent of residents were without power as of Oct. 19.

The company, for example, is frequently servicing three Cummins generators at the Puerto Rico Convention Center in San Juan, home to the Federal Emergency Management Agency’s (FEMA) command center on the island as well as the largest shelter in the U.S. territory for those displaced by the storms. The generators, installed before Hurricanes Irma and Maria struck, have been running around the clock.

Teamwork has been key to the company’s work both in Florida and Puerto Rico. Cummins deployed 13 technicians from elsewhere in the Distribution Business Unit to support Florida customers during Hurricane Irma. For the response to Maria, four more technicians from other locations in the company have been deployed to Puerto Rico, with plans for more to meet customers’ overwhelming needs.

Cummins worked with one of its large supermarket customers in the U.S. to get a container of supplies to employees in Puerto Rico who have been working long hours to support local customers, and then filled a second container with supplies donated by company employees for their colleagues in San Juan.

Cummins’ President & Chief Operating Officer Rich Freeland and Jenny Bush, Vice President of Sales & Service – North America, issued a company-wide note this week thanking all employees responding to recent natural disasters not just in Florida and Puerto Rico, but in Texas, Mexico and India, too.

“Recent natural disasters across the globe have impacted our employees and their families in devastating ways,” Freeland and Bush said in the note. “In response, our people have exemplified and lived the value of caring, making a real difference during such difficult times.”

Cummins employees fielded many calls and braved the elements to help customers. Here are just a few examples:

  • An Orlando, Florida-based team worked with the company’s West Palm Beach branch to help Martin County install a generator to keep its emergency radio system running in the critical hours after Hurricane Irma struck.
  • Cummins’ West Palm Beach and Miami branches worked together to locate, deliver and install a generator as Hurricane Irma was arriving for a customer needing to maintain power for medical reasons.
  • Multiple Cummins teams in the days after the storm collaborated to quickly repair a utility truck headed to one of the hardest hit areas of Florida.
  • Cummins teams across that state sent pallets of water with daily parts deliveries to aid customers and their communities hit hard by Irma.

The company has also been working with Save the Children organization to raise thousands of dollars for disaster relief. Save the Children is dedicated to giving children a healthy and safe start in life as well as the opportunity to learn.

People in hurricane-affected areas in the continental United States who need support with power generation can contact the company’s customer care team at 1-800-CUMMINS (1-800-286-6467). For those in Puerto Rico and other Caribbean locations, the team can be reached at 1-305-821-4200.

“While saying ‘thank you’ doesn’t feel sufficient, we can assure you it is genuine,” Freeland and Bush said in their note to employees. “Thank you for giving. Thank you for asking how you can help.”

Caption: Cummins employees unload supplies at the company’s distribution location in Puerto Rico. The facility is in relatively good shape and employees are working long hours to help restore power on the island.

Tom Linebarger Chairman and CEO

Tom Linebarger

Tom Linebarger became Chairman and CEO of Cummins Inc., the largest independent maker of diesel engines and related products in the world, on January 1, 2012.  Prior to becoming Chairman and CEO, he served as President and COO from 2008 to 2011, Executive Vice President and President, Power Generation Business from 2003 to 2008, Vice President and Chief Financial Officer from 2000 to 2003, and Vice President, Supply Chain Management from 1998 to 2000.

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