By Brenda Showalter, The Republic
bshowalter@therepublic.com
Cummins Inc. will cut at least 500 white-collar workers worldwide, including engineers and technology and sales staffs, by Dec. 31 because of the worldwide economic slump.
The Columbus-based Fortune 500 company, which posted record sales and profits this year, said Friday that the cuts represent 3.4 percent of Cummins' professional workf orce of about 14,500.
Cummins' total work force numbers roughly 41,500.
How many positions will be cut in Columbus is unclear, said Mark Gerstle, Cummins' chief administrative officer.
However, he said no changes are planned for the light-duty diesel project gearing up for production at Plant 1 on Central Avenue.
The downtown office building, being constructed at Third and Jackson streets also will not be affected, he said. Gerstle said the employees who will occupy the downtown office building already have been hired and are working in other buildings in Columbus while they await completion of the new structure in the spring.
Cummins also remains committed to its pledge to provide $25 million to struggling Irwin Financial Corp. if needed.
"Economic conditions are changing very, very rapidly, and we're trying to react," Gerstle said.
Cummins implemented other costcutting measures before deciding to cut professional workers.
"Cummins already has taken a number of actions across the company to try to bring costs in line with our reduced current demand and to meet the expected challenges of 2009," said Tim Solso, Cummins chairman and chief executive officer.
"Despite those efforts, we have now reached a point where we will have to take more significant steps to reduce our professional work force around the world."
Voluntary retirements
Professional employees who are eligible for retirement received letters Friday giving them the option to take a voluntary retirement package.
These employees have until Thursday to accept the compensation package, which would include nine months of salary and benefits.
The first 200 to sign up will be automatically approved. The remaining reductions will be involuntary.
"We're trying to get as many people who were thinking about retiring an incentive to retire to try to minimize the involuntary terminations around the world," Gerstle said.
The remaining work force reductions will be based on employee performance, skills and company need, said Mark Land, Cummins' director of public relations.
Cummins already has cut contract workers and temporary employees
The company also has reduced spending by prioritizing information technology and capital spending and cutting travel and conferences expenses.
Gerstle said Cummins essentially has a hiring freeze other than for highly technical positions.
The sales decline was caused by the deteriorating global economy and was out of Cummins' control, Gerstle said.
It also was companywide - not based on any one product.
Many of the changes resulted from consumers cutting back spending in the automotive, housing and construction sectors.