Cummins Leader Takes Public Role in Battling Corruption

Fernanda Beraldi presents a paper on the need for transparency in purchase agreements with governments at the Organization for Economic Cooperation and Development’s Integrity Forum in Paris in March.

AS TRANSACTIONS BETWEEN GLOBAL BUSINESSES AND GOVERNMENTS AROUND THE WORLD BECOME INCREASINGLY COMPLEX, CUMMINS DIRECTOR FOR INTERNATIONAL ETHICS AND COMPLIANCE FERNANDA BERALDI SAYS TRANSPARENCY IS MORE IMPORTANT THAN EVER.

“Transparency in government bids and industrial compensation is critical to improving international anti-corruption regulations,” said Fernanda Beraldi, whose paper on the topic was one of only 24 selected for presentation at the Organization for Economic Cooperation and Development’s (OECD) Integrity Forum in Paris. “The growing practice of including offsets or side agreements that might have little to do with the main elements of a purchase agreement creates the potential for ethical problems.”

Government ministers, business leaders and others from more than 40 countries that are part of the OECD gathered in Paris March 30-31 to discuss the significant integrity and trust challenges facing the world today. The Integrity Forum is increasingly recognized as one of the few places tackling global policy concerns in the ethics and compliance arena from a multidisciplinary perspective.

Offsets, the subject of Beraldi’s paper, are becoming more common in government contracts. They can range from side agreements where a company selling a product agrees to help a government with credit assistance or technology transfers as part of the deal to one instance where investing in a shrimp farm was part of a defense contract.

Beraldi, who is also a Corporate Counsel at the company, said the potential for abuse grows significantly in smaller countries where governments may not have enough people to adequately discourage or discover unethical behavior. She hopes her paper will spur additional conversation and ultimately action on the issue.

“It was an honor to be selected to present,” Beraldi said. “I think Cummins’ presence at the forum demonstrates that we are at the forefront of finding solutions for corruption and integrity issues world- wide.”

Fighting corruption is not the only ethics issue Cummins and Beraldi are engaged in outside the company. Beraldi also co-authored a paper on fighting human trafficking titled “No Good Deed Goes Unpunished? Possible Unintended Consequences of Supply Chain Transparency.”

Her paper, which deals with human trafficking in supply chains and how companies can still get into trouble if they merely follow existing regulations, was presented at the Winter Conference of the American Society of International Law, an institution that promotes the use of international law as a cornerstone of a just and peaceful world.

Mark Sifferlen, Vice President – Ethics and Compliance at Cummins, said the company applauds Beraldi’s work both inside and outside Cummins.

“Both Our Code of Business Conduct and our Supplier Code of Conduct  take a strong stand against corruption and human trafficking,” Sifferlen said. “Fernanda’s work demonstrates the depth of our commitment in these important areas.”

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. blair.claflin@cummins.com

Cummins CEO Tells Environmental Group Good Stewardship Pays Off

Cummins Chairman and CEO Tom Linebarger is being lauded by the Environmental Defense Fund for his leadership on sustainabilty issues.
Cummins Chairman and CEO Tom Linebarger is being lauded by the Environmental Defense Fund for his leadership on sustainability matters.

A company that makes engines and the Environmental Defense Fund (EDF) might at first glance seem like an unusual pairing, but in an interview posted this week with Cummins Chairman and CEO Tom Linebarger the two find plenty of common ground.

Speaking with the EDF’s Fred Krupp, Linebarger makes a strong case for how environmental stewardship is paying off for Cummins.

“We’ve been an innovator since the very beginning: on the diesel engine, natural gas engines and on emission controls,” Linebarger tells Krupp. “We see customer and environmental challenges as opportunities to demonstrate leadership and innovation.”

The interview appears in the EDF’s +BUSINESS blog on the organization’s website and on the ChangeTheWorld blog on Forbes.Com.

Calling Linebarger one of the most forward looking executives he has worked with on sustainability and community engagement, Krupp asks Linebarger why Cummins supports environmental regulations.

Linebarger at work in his Cummins' office
Linebarger maintains Cummins has benefited by investing to meet tough environmental standards.

“Regulations play an important role in protecting the environment and we’ve worked hard to make sure that we’re a positive contributor to that effort,” Linebarger says. “There’s also no question that Cummins has benefited because of environmental regulations. By investing to meet tough environmental standards, we were able to develop businesses associated with meeting emissions (standards).

“The regulations not only helped me as a citizen breathe cleaner air and drink cleaner water," Linebarger adds, "they also helped Cummins build a business that’s sustainable, profitable and growing globally.”

The full interview includes much more on Linebarger's perspective on environmental sustainability and concludes with a discussion on his favorite Harley-Davidson motorcycles.

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. blair.claflin@cummins.com

Cummins Receives Record Number of Patents in 2017

An all-electric, Class 7 concept truck was one of the innovations Cummins unveiled in 2017. The company is using the truck to study electrification.
An all-electric, Class 7 concept truck was one of the innovations Cummins unveiled in 2017. The company is using the truck to study electrification.

Cummins engineers and scientists received a record 287 patents in 2017 from the U.S. and countries around the world, about an 11 percent increase over 2016.

“It can take several years to acquire a patent, so comparing numbers on a year-to-year basis is not a perfect measure,” said Wayne Eckerle, Vice President of Research and Technology at Cummins. “But we’ve seen a pretty consistent increase since 2013 as our engineering teams live the company’s vision of ‘innovating for our customers to power their success.’”

The patents granted globally in 2017 represent a more than 80 percent increase over the 156 global patents received in 2013. Cummins’ patents have exceeded 200 annually since 2014.

Cummins has been working on a number of powertrain technologies in recent years, using diesel and natural gas engines, engines that run on bio fuels, and fully electrified powertrains. Improvements have been made in emissions, fuel efficiency, cost-of-operation, reduced weight and improved performance.

The company has also been engaged in work to improve after-treatment systems, filters, fuel systems and more. And Cummins has been working on the company’s power generation systems as well as Cummins’ telematics capabilities.

Cummins X15
Cummins in 2017 started production on its X15 engine, one of the cleanest, most efficient engines it has ever built.

Telematics enables the company to communicate over-the-air with its engines and engine operators to provide information on system faults and even engine software updates to enhance efficiency.       

All of this work offers potential opportunities for patents. The company wants to provide customers with a broad portfolio of products so they can choose what’s best for their particular circumstances. Cummins believes there is no single solution to the world’s power needs. A variety of approaches holds the most promise.

Cummins has more than 10,000 engineers, scientists and support staff to achieve its innovation vision, many based at more than 20 technical centers around the world.

They carry on the company’s long tradition of innovation, which dates back to founder Clessie Cummins, who started the company nearly 100 years ago after working on an early diesel engine in a garage in Columbus, Indiana (U.S.A.).

“Our ability to innovate on behalf of our customers is critical to the company’s sustainability,” Eckerle said. “This is an exciting time at Cummins. We’re making advances and working on technologies that Clessie couldn’t have imagined when he started this company.  We need to continue doing that to build the more prosperous world we all want.”

GLOBAL PATENTS

While year to year comparisons are difficult with patents, Cummins has been on an upward trend globally since 2013.

YEAR                                       TOTAL PATENTS

2017                                                287*
2016                                                259
2015                                                249
2014                                                217
2013                                                156
2012                                                175
2011                                                 149

*Record year

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. blair.claflin@cummins.com

Cummins Brazil Celebrates Inauguration of Victor Civita School Expansion

Students help celebrate the renovation and expansion of the Victor Civita school in Guarulhos, Brazil, along with a host of neighborhood residents, government officials and Cummins employees.
Students help celebrate the renovation and expansion of the Victor Civita school in Guarulhos, Brazil, along with a host of neighborhood residents, government officials and Cummins employees.

The 320 students at the Victor Civita school in Guarulhos Brazil will now have a lot more room to learn.

That’s because the school for children ages 5- to 11-years-old has more than doubled in size after a grant from the Cummins Foundation to expand and modernize the building.

"The new Victor Civita school is one of Cummins Brazil's most important (community) projects,” said Luis Pasquotto, President of Cummins Brazil at an inauguration ceremony earlier this month (March 15). “…Now the Victor Civita school is able to receive more children and offer full-time teaching, helping in the transformation of our society, our country. I’m very proud of this project.”

The exterior of the renovated and expanded Victor Civita school.
The renovated and expanded Victor Civita School.

The school was established in 1990 within property controlled by the Cummins Brazil Employee Association near the Cummins plant in Guarulhos, a suburb of São Paulo, Brazil.

Cummins Brazil has long extended a helping hand to the economically challenged Jardim Cumbica community near the plant, establishing the Clessie Cummins Health Clinic, a child care center, a sewing cooperative and numerous other initiatives designed to help residents rise out of poverty. A neighborhood-based school fulfilled a long held dream of Jardim Cumbica residents.

The expansion and modernization of the school was the result of a major collaborative effort at Cummins, crossing functions and business units. Facilities, Legal, Government Relations and Corporate Responsibility all played key roles. The project exemplified teamwork, one of Cummins’ five corporate values. 

The school now has about 2,000 square meters of space compared to 780 square meters previously. The additional space is being used for more classrooms, a new kitchen, a cafeteria, a large computer room, a gym and many other advances. Cummins Brazil employees decided to donate additional space for the school during an assembly of the employees’ association.

The inauguration ceremony was attended by the deputy governor of the State of São Paulo, the secretary of education of São Paulo, the mayor of Guarulhos, and many government officials. Cummins’ business partners, distributors, journalists, and neighborhood residents also attended.

Includes reporting by Marcelo Cosentino, Superv de Comunicacoes, Cummins Brazil.

Luis Pasquotto, President of Cummins Brazil, speaks at the inauguration ceremony.
Luis Pasquotto, President of Cummins Brazil, speaks at the inauguration ceremony.

 

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. blair.claflin@cummins.com

Cummins CEO Makes Strong Pitch for Free Trade

Cummins Chairman and CEO Tom Linebarger speaks at the forum.
Cummins Chairman and CEO Tom Linebarger speaks at the forum.

Cummins Chairman and CEO Tom Linebarger today argued forcefully for free trade, maintaining tariffs and other protectionist steps won’t serve American workers in the long run.

“I know that Cummins and our 2,500 U.S. suppliers – small, medium or large – we can compete with anyone,” Linebarger said during a panel discussion on trade and American competitiveness sponsored by the Business Roundtable and Farmers for Free Trade. “I know we can. And I just want the chance to do it.”

Linebarger and former U.S. Sen. Max Baucus, a Montana Democrat and now Co-Chair of Farmers for Free Trade, took questions from CNBC’s Kayla Tausche during the hour-long forum which was live-streamed and is now available on the Business Roundtable’s website. They were preceded by keynote remarks from U.S. Sen. Orrin Hatch, R-Utah, chairman of the Senate Committee on Finance.

All three men maintained the tariffs proposed by President Trump on imported steel and aluminum would harm not only industries that depend on those items for the goods they produce but could trigger a trade war including retaliatory tariffs from other countries.

Hatch called for bilateral talks with those responsible for the over-supply of steel and aluminum now on the market, maintaining tariffs would do “absolutely nothing” to resolve the issue. He said he fears the benefits of recently enacted tax reform for many companies considering expansion could be undermined by the negatives surrounding tariffs.

Baucus agreed, maintaining the impact of any ensuing trade war could be disastrous for U.S. farmers who increasingly count on exporting a significant amount of what they produce. 

The Business Roundtable is an association of chief executive officers of America’s leading companies. Linebarger, chairman of the group’s International Engagement Committee, lamented that trade has become politicized, maintaining “the idea that all sides can win has kind of been lost.”

He said a good example of both sides winning is Cummins’ high horsepower plant in Seymour, Indiana. The company looked at locations around the world but chose Seymour. Today, about 70 percent of the engines the plant builds are exported outside the U.S.

Linebarger praised the Trump administration for its work on tax reform and he said he likes what he hears about negotiations regarding the North American Free Trade Agreement, which he says needs to be updated after 24 years.

Those developments and Cummins’ strong financial performance have him optimistic about the future – but only if that future is free of trade wars.

“We are ready to compete today more than ever,” Linebarger said. “All we need is a somewhat level playing field. We just need access to markets and we can go out and win.”

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. blair.claflin@cummins.com

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