Making The Case for International Trade

Cummins CEO Tom Linebarger shares why international trade plays a critical role in Cummins future.

When CEO Tom Linebarger looks at the Cummins’ high horsepower plant and tech center in Seymour, Indiana, he sees the critical importance of international trade.

The 800-employee facility produces Cummins’ QSK95, the largest high speed diesel engine in the world. The company has invested about $500 million to launch the engine, and just over two-thirds will be shipped outside the United States.

“So does trade matter to us? You bet,” Linebarger said during a recent speech to the Indianapolis Chamber of Commerce where he was joined by U.S. Assistant Secretary of Commerce Steve Haro. “Eight hundred people (at the Seymour facility) depend on trade, otherwise that engine doesn’t make it.”

Linebarger is working with other business leaders including U.S. Secretary of Commerce Penny Pritzker to promote the proposed Trans-Pacific Partnership Act (TPP), a free-trade agreement that would formalize trade relations between the United States and 11 Pacific Rim countries.

Linebarger and others hope the agreement, which has bipartisan support, can be passed by Congress after the election and before President Obama departs in January, overcoming the negative and misleading trade rhetoric that has been prevalent during the Presidential race.

Haro and Linebarger say bad news about trade gets a disproportionate amount of media coverage in the U.S., while the jobs created by trade are largely ignored. In addition to the 800 employees at Seymour, Linebarger noted there are hundreds of suppliers who contribute to the QSK95 who also benefit from trade. Trade for the company goes well beyond the QSK95. Cummins exports about $3 billion worth of goods annually in the U.S.

Seymour was selected for the QSK95 over potential sites in India, China and the United Kingdom, Linebarger said. “When the rules are reasonably even, U.S. companies can compete quite well,” he added. “That’s my view.”

Linebarger, who has been extolling the benefits of trade in conversations with various groups including employee unions, says continued growth is critical to the company, noting that 95 percent of the world’s potential customers are outside the United States.

What’s become lost in the debate over trade, he said, is that TPP is “the agreement we’ve all been waiting for.”

It includes language to promote and protect the e-commerce and high-tech sectors, intellectual property, food safety and more, while also including labor and environmental standards. TPP also includes language to make it easier to bring enforcement actions when countries don’t abide by the act.

“Issues that people have been bringing up for years (regarding trade) are in this agreement for the first time and nobody’s talking about that,” Linebarger said.

“We’ve got 12 countries in agreement, both political parties, a president who wants to sign it and a Congress that’s got the votes,” said Linebarger, maintaining the time is right to pass the act. “When are we going to see that again?”

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

COVID-19 is no match so far for Six Sigma at Cummins

Cummins' Corporate Office Building in Columbus, Indiana, is a quiet place these days with many employees working from home because of COVID-19.
Cummins' Corporate Office Building in Columbus, Indiana, is a quiet place these days with many employees working from home because of COVID-19.

Cummins employees working from home seem to be making the most of their time, at least when it comes to Six Sigma. 

Actual savings from closed Six Sigma projects are running significantly ahead of historical targets through the second quarter of the year. Savings, including cost and cost avoidance, for 2020 totaled $304 million through June, $126 million over the targeted savings of $178 million. That’s a difference of about 70%.

The NextGen Six Sigma & Continuous Improvement learning program has transformed employee development with the business problem-solving tool as the company adjusts to a new normal. 

Employees seem highly motivated to find savings given the devastating economic impact of COVID-19, said Julie Liu, Director of Continuous Improvement for the Corporate Quality function and the Six Sigma leader at Cummins. 

Known as “belts,” which is short for Black Belts and Green Belts, participating employees were leading 2,464 active projects as of July, targeting about $700 million in savings.

IMPROVING ACCESS

Six Sigma has been the company’s chief problem-solving tool since its introduction in 2000. It uses data-based analysis to identify defects and variation in a wide range of manufacturing and business situations.

Cover of the 2019 Sustainability Progress Report
You can learn more about Cummins' sustainability efforts in the 2019 Sustainability Progress Report. The 2019 report includes a special section on the company's response to COVID-19. 

Providing real-time, on-demand tools, methods and learning support has been a big factor in the increase in Six Sigma projects. Liu said under the guidance of Elizabeth Potry, the Six Sigma Center of Excellence Leader, the program launched the 6SCI Learning & Development website on Cummins’ internal network, Cummins Connect.

By accessing this website, any Cummins employee can download over 100 supporting tools and link with the Cummins Learning Center, an online portal, to access courses on Six Sigma through 50 online modules.

For a deeper understanding, the Six Sigma Continuous Improvement program created NextGen as a hybrid learning model, blending online modules and coaching workshops by Master Black Belts, with the supporting materials on the website.  

WELCOME TIMING

With many Cummins’ employees working from home because of the pandemic, the development of the online tools has come at a particularly good time.

Even before the pandemic, Cummins Chairman and Chief Executive Officer Tom Linebarger had been challenging the Quality function to expand the number of Six Sigma tools available to employees and improve access to them.

Prospective belts no longer have to wait for a spot in an in-person Six Sigma class, with tools and training at their fingertips. Every employee is empowered to use Six Sigma Continuous Improvement to solve critical business problems and continuously improve the processes they work on. 

While 2020 will likely be a year many want to forget, it could be a very memorable 20th anniversary for Six Sigma at Cummins. 

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

Cummins recognized by EPA for leadership on renewable power

Cummins’ support for the expansion of a wind farm in northwest Indiana is helping the company send nearly enough renewable energy to the grid to offset the energy it uses from traditional sources in its home state of Indiana.
Cummins’ support for the expansion of a wind farm in northwest Indiana is helping the company send nearly enough renewable energy to the grid to offset the energy it uses from traditional sources in its home state of Indiana.

Cummins’ use and promotion of renewable energy has qualified the company to join an elite group of U.S. firms in the EPA’s Green Power Partnership.

The partnership’s Top 100 represents the largest green power users within the group, with a combined usage of more than 58 billion kilowatt-hours (kWh) annually. Advocates say the Top 100 is critical to creating markets for wind, solar, hydrogen and other forms of renewable power.

Green Power Partnership logo“Our portion of the Meadow Lake wind farm generated almost 240 million kWh of green power in 2019, which reduced carbon emissions by over 125,000 metric tons,” said Mark Dhennin, Director of Energy and Environment at Cummins. “We’re glad our efforts have been recognized by the U.S. Environmental Protection Agency (EPA), and we hope it will help influence other companies to take similar action.”

Cummins entered into a virtual power purchase agreement (VPPA) with Meadow Lake in 2017 that helped the northwest Indiana wind farm expand. Last year was the first full year of the expansion. Cummins’ share sent enough renewable energy to the grid to nearly off-set all of the electricity the company uses from traditional sources at its Indiana (U.S.) facilities.

The agreement made Cummins’ eligible to join the EPA’s Green Power Partnership. The partnership requires a minimum use of renewable power for large companies of 7% of their total U.S. electricity consumption.  The VPPA for the Indiana wind farm, plus two small solar arrays in Minnesota, accounted for 43% of the power consumption by Cummins’ U.S. operations in 2019.

That percentage qualified Cummins for the national Top 100 list and positions it among the top industrial partners in the program. Cummins ranks No. 53 on the Top 100 list and No. 24 among partners in the Fortune 500. 

The Jamestown Engine Plant (JEP) in Jamestown, New York, has a large (2 MW) solar photovoltaic (PV) array on its roof as part of a 20-year power purchase agreement with a third party. JEP receives the power, but the third party retains the renewable energy credits, so Cummins is not able to claim that the environmental benefits and the project power cannot be counted in this partnership.

The EPA established the Green Power Partnership in 2001 to protect human health and the environment by increasing the use of renewable power and, by extension, encourage the development of renewable energy sources. 

The partnership provides a framework that includes credible usage benchmarks, market information, technical assistance, and public recognition for companies and other organizations that use green power. In return for technical assistance and recognition, partners commit to using renewable power for all, or a portion, of their annual electricity consumption. The Green Power Partnership is limited to U.S. operations only. 

Cover of 2019 Sustainability Progress Report
To learn more about Cummins’ environmental efforts, check out the company’s recently released 2019 Sustainability Progress Report starting on page 19.


 

Cummins Office Building

Cummins Inc.

Cummins is a global power leader that designs, manufactures, sells and services diesel and alternative fuel engines from 2.8 to 95 liters, diesel and alternative-fueled electrical generator sets from 2.5 to 3,500 kW, as well as related components and technology. Cummins serves its customers through its network of 600 company-owned and independent distributor facilities and more than 7,200 dealer locations in over 190 countries and territories.

New report highlights Cummins’ sustainability performance in 2019

Hydrogen could be a critical fuel source to accomplishing Cummins' 2050 aspirations to power customer success through carbon-neutral technologies.
Hydrogen could be a critical fuel source to accomplishing Cummins' 2050 aspirations to power customer success through carbon-neutral technologies.

Cummins today released its 17th annual Sustainability Progress Report, highlighting the company’s performance on environmental, social and governance issues in 2019.

The report includes a special section on Cummins’ actions during the first six months of the COVID-19 pandemic to protect the health and job security of its employees.

“The pandemic and protests have revealed a fundamental truth about sustainability: companies and institutions are only as strong as the communities, countries and the world around them,” Chairman and CEO Tom Linebarger writes in the report. “To be successful for our shareholders over the long run, we must ensure the health and prosperity of all of our stakeholders.”

In light of protests demanding social justice that have swept across the United States and elsewhere, Linebarger says the company in 2020 will actively fight against systemic racism, honoring the legacy left by longtime CEO J. Irwin Miller, who was a leader in the campaign for civil rights in the 1960s.

“While I’m proud of the accomplishments included in this report, there’s much work to be done,” Linebarger says. “You can count on Cummins to strive for a more prosperous and just world.”

The report outlines the company’s many accomplishments in 2019, including:

•    A new environmental strategy, PLANET 2050, which includes science-based goals that meet or exceed the goals in the United Nations’ Paris agreement on climate change.
•    Reaching three of the company’s 2020 environmental sustainability goals a year early and narrowly missing a fourth.
•    Offsetting nearly all of the company’s energy use in Cummins’ headquarters state of Indiana with renewable energy thanks to a wind farm expansion the company supported.
•    Achieving the lowest health and safety Incidence Rate since 2015.
•    Reaching the 50% level for women’s representation on the company’s top senior leadership team.
•    Impacting the lives of 100,000 people through the company’s global Cummins Powers Women Program to promote equality.
•    Investing a record $1 billion in research, development and engineering as the company advances current technology and brings to market new products fueled by hydrogen and other low-carbon sources.
•    Achieving record profitability.

The 2019 Sustainability Progress Report Cover
Cummins’ new 2019 Sustainability Progress Report includes a special section on the company’s response to COVID-19 during the first six months of 2020. 

Cummins’ New Power segment, which combines the company’s investments in electrified powertrains, fuel cells and hydrogen production technology, also completed its first full year in 2019. 

The group successfully brought zero emissions electrified powertrains to bus markets in North America in 2019. Cummins also has more than 2,000 fuel cell installations across a variety of on and off highway applications as well as more than 500 electrolyzer installations to split water into hydrogen and oxygen.

These technologies will play a key role in the company’s PLANET 2050 aspiration to ultimately power customer success through carbon-neutral technologies.

The 2019 Sustainability Progress Report is the first of the company’s planned reports on sustainability. By the end of July, the company expects to post reports aligned to the Sustainability Accounting Standards Board (SASB) and the United Nations’ Global Reporting Initiative (GRI).
 

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

Doing our part to protect the earth

The Rocky Mount Engine Plant in North Carolina has a water treatment system that includes a greenhouse as part of the treatment process.
The Rocky Mount Engine Plant in North Carolina has a water treatment system that includes a greenhouse as part of the treatment process.

As the world celebrates the 50th anniversary of Earth Day this week, here are four ways Cummins is working to reduce its environmental impact.

These four steps are not the only measures the company has taken, but they are four significant steps to be sure:

Chairman and CEO Tom Linebarger unveils the company's PLANET2050 environmental strategy.
Cummins Chairman and CEO Tom Linebarger unveils the company's PLANET2050 environmental strategy.

1.    PLANET2050 ENVIRONMENTAL STRATEGY

Cummins’ PLANET2050 strategy, released late in 2019, establishes science-based greenhouse gas (GHG) reduction goals for the company timed to 2030 and aspirations for 2050 to reduce Cummins’ impact on environmental challenges such as climate change. The goals, which will replace current 2020 goals, include reducing the release of carbon dioxide (CO2) by 300 million metric tons and reducing the release of volatile organic compounds (VOCs) from paint and coating operations by 50%. The science-based 2030 goals exceed targets set in the United Nations’ Paris climate accords. Cummins hopes to be carbon neutral by 2050.

2.    CONSERVING WATER

Gains in water conservation have been one of the big successes of the company’s environmental goals that expire in 2020. Approximately 1 billion gallons of water use has been avoided since 2010 through the company’s conservation efforts, which have ranged from relatively simple steps to the use of complex technology that reduces the amount of water used to cool heavy-duty engines during testing and capture the energy those engines produce for re-use in Cummins’ plants. Now, the company is experimenting with state-of-the-art water treatment systems that include such things as greenhouses abundant with plant life to help filter water for reuse.

3.    ENERGY CONSERVATION 

Cummins has also been successful conserving the energy it uses through its 2020 goals. The company has reduced energy intensity, the amount of energy used adjusted by hours worked, more than 30% since 2010. Cummins has taken steps such as replacing old lights with LED lighting, and older air compressors with more efficient models in addition to the steps outlined in item No. 2 to capture the energy generated by large engines in test cells.  The company has also trained employees to find equipment and processes in their home plants that could be improved from an energy perspective. Meanwhile, Cummins’ GHG emissions adjusted by hours worked fell 6% in 2018 compared to the previous year. Data for 2019 is expected to be released soon.

Meadow Lake Wind Farm expansion
The expansion of the Meadow Lake wind farm is sending renewable power to  the grid.

4.    EMBRACING RENEWABLE ENERGY

The company has made a significant investment in solar energy, with solar installations completed or underway at more than two-dozen locations including a 650,000 square foot array installed in 2016 on top of the Beijing Foton Cummins Engine Company in Beijing, China, which generates about 15% of the building’s electricity needs. The company also supported the 2018 expansion of an Indiana wind farm through a Virtual Power Purchase Agreement. It will almost send enough renewable power to the grid to offset all of the electricity the company uses at all of its facilities in the state. Encouraging the use and development of renewable power was one of the company’s 2020 environmental goals. 

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

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