2010 Sustainability Report - Cummins.com

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Challenges ahead: Financial performance Despite the Company’s relatively strong performance during the recession, Cummins faces some significant challenges in 2010. Among them: Continued economic weakness in the United States and Western Europe: These large, mature markets have not rebounded from the downturn as quickly as developing economies such as India, China and Brazil. Cummins expects our business in the U.S. and Western Europe to grow more modestly than in other areas in 2010, although the second half of the year is expected to be better than the first half. Continued investment in critical technologies: Cummins needs to continue to manage its business conservatively in order to earn a solid profit and generate the cash necessary to fund increased investment in key technologies and products. The Company plans to increase its capital spending by 30 percent from 2009, with much of the investment going to fund new products and capacity expansion. Planning for the recovery: Even as Cummins continues to work through the global economic downturn, the Company needs to increase its focus on taking advantage of the significant long-term opportunities we see for the business beginning in 2011. changes. So in 2009, after the downturn hit, Cummins could adjust, making a profit while investing in key projects and technologies. Ten years of improving quality and processes paid off. “Waste and variation just cost you money,” Strodtbeck said. The benefits of Six Sigma can be seen in the 39 projects recognized this year with the Chairman’s Six Sigma Quality Award. These projects represent the best of the nearly 4,000 projects completed in 2009. The winning projects, considered the best of the best, are responsible for savings of $67 million to Cummins and $8.6 million to customers last year. Strodtbeck notes that while other companies can sell their customers an engine or other products, Cummins can deliver a full range of services and support that includes working with them to lower their costs. As Cummins enters its second decade of Six Sigma, the tools remain a vital part of how the Company does business. In fact, employees in upper management must be Green Belt certified in order to advance or make a lateral move within the Company. More about Six Sigma The use of the term Six Sigma refers to a measurement in which 99.99966 percent of manufactured products are free of defects. By the numbers 18,000 Green and black belt projects completed since 2000 4,000 Projects completed in 2009 $3 billion Total savings to Cummins since 2000 $750 million Total savings to Cummins customers since 2000 11,000 People trained in using Six Sigma tools at Cummins 108 Cummins Inc. Sustainability Report 2010
Our new strategic principle Cummins has added a new strategic principle – Lead in Critical Technologies – to the five long-standing principles used to guide the Company’s growth. While Cummins has been a high technology company for many years, the new principle, adopted earlier this year, will re-enforce the importance of being first to market with the best technology. “Cummins is absolutely committed to technological innovation,” said John Wall, the Company’s Chief Technology Officer. “We have been a leader throughout time and intend to continue to be a leader in technology.” Cummins has developed key technologies and subsystems critical to emissions performance and fuel efficiency, two key factors in the design and manufacture of the Company’s products. With a global footprint extending into 190 countries, Cummins has a broad understanding of the upcoming technology demanded by industry. That knowledge provides the Company with a competitive advantage. In the next three to five years, nearly every major economy in the world will have to comply with regulations governing emissions and fuel economy. Cummins’ customers will be looking to the Company for help meeting those regulations through products such as our engines and components. By leading the way in critical technologies, Cummins can be an effective partner with our customers while maintaining an advantage with our competitors. Cummins Strategic Principles Leverage Complementary Businesses: Cummins is a family of complementary businesses that create value for our customers. Increase Shareholder Value: Cummins’ success is measured by growth in shareholder value. Be the Low Cost Producer: Cummins will pursue an operational strategy of cost leadership. Lead in Critical Technologies: Cummins will be the market leaders in technologies critical to our customers’ success. Seek Profitable Growth: Cummins will seek profitable growth by leveraging our assets and capabilities to grow where Cummins can establish an advantage. Create the Right Work Environment: Cummins will assure that the physical and cultural work environment is conducive to excellent performance. Financial 109
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Cummins Inc. Sustainability Report
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Who we are Vision Making people’s
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Table of contents This year’s Sus
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To address the global challenges we
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Environment 9,000 tons of CO 2 emis
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The Cummins Operating System The Cu
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Clessie Cummins was known for his b
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Social issues, diversity and people
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The university’s emphasis on educ
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Cummins is a major participant in t
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Chairman and CEO Tim Solso (fourth
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Challenges ahead: The environment I
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Global on-highway standards 4.5 4.0
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Remanufacturing Cummins products Re
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Non-road useful life emissions tota
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ReCon plant opens in India Cummins
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Partnering with others Our own prod
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Environmental objectives and target
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25% Percent change in revenue Since
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Cummins and climate change Here are
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Cummins accepted into U.K. Carbon T
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In December 2009, Cummins became a
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Combined heat and power 45% 85% ene
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India campus wins Chairman’s Awar
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Inside a classroom at Cummins Colle
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Partnering with Purdue, Rose Hulman
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Indiana Gov. Mitch Daniels (left) a
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Challenges ahead: Governance and Ri
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Robert J. Bernhard Vice President f
Page 59 and 60: Dr. Franklin Chang-Diaz Title: Chai
Page 61 and 62: Cummins started an Internet-based c
Page 63 and 64: Flu outbreak puts pandemic plan int
Page 65 and 66: Cummins has been working with Ithem
Page 67 and 68: Employees from the Dongfeng Cummins
Page 69 and 70: Challenges ahead: Corporate respons
Page 71 and 72: Audit Committee Chairman Marsha Hu
Page 73 and 74: A generator set operating on vegeta
Page 75 and 76: Lokesh Agrawal, Customer Interface
Page 77 and 78: Cummins employees regularly visit P
Page 79 and 80: Other Environmental Challenge grant
Page 81 and 82: GRANTEE ORGANIZATION COMMUNITY GRAN
Page 83 and 84: GRANTEE ORGANIZATION COMMUNITY GRAN
Page 85 and 86: Mary Kate (left), can only move her
Page 87 and 88: The Cummins Power Generation Plant
Page 89 and 90: “Satisfaction has increased withi
Page 91 and 92: Create a workplace population with
Page 93 and 94: Cummins’ definition of diversity
Page 95 and 96: Taking diversity to the next level
Page 97 and 98: Council plays key role The Diversit
Page 99 and 100: Smaller diverse suppliers can play
Page 101 and 102: Cummins workforce Here’s a quick
Page 103 and 104: President and COO Tom Linebarger sp
Page 105 and 106: The investment is paying off. Becau
Page 107 and 108: Pat Ward, Vice President - Chief Fi
Page 109: Six Sigma delivers for Cummins Ten
Page 113 and 114: Components Sales: $2.4 billion EBIT
Page 115 and 116: Production Notes Design and writing
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2010 Sustainability Report - Cummins.com

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