Cummins looks to generate cash to cover losses
Apr 24, 2002 12:00 PM
Engine maker Cummins Inc. is looking to sell its Kuss Filtration subsidiary in order to generate cash in the face of rough economic waters. Kuss Filtration, a subsidiary of Cummins' Fleetguard engine filter division, had $32 million in sales last year. However, Cummins recorded a $102 million loss in 2001 on sales of $5.7 billion as it restructured its operations in the face of both an economic recession and new truck production cuts of almost 50%. In the fourth quarter of 2001, Columbus, IN-based Cummins said its truck engine sales dropped 15% to $800 million compared to the same quarter in 2000. Engine sales to heavy-duty truck producers dropped 23% to $247 million to the worldwide from the fourth quarter of 2000, reflecting a continuing softness in the market and plant shut downs at several OEMs. In the medium-duty truck and bus segment, sales rose 2% to $151 million in the fourth quarter of 2001, but fell 26% in the light-duty automotive and recreational vehicle segment to $139 million, primarily due to the model changeover in the Dodge Ram pickup, said Cummins. The company added that it does not expect a significant improvement in revenue in 2002, though it expects to achieve profitability through cost reduction efforts. That also may include selling off parts of its business, as it deemed that Kuss – which it termed "an excellent business" – was outside the core strategic interests of Cummins and its Fleetguard unit.
