Cummins to consolidate US filter plants and move operations to Mexico, cut about 400 jobs

Cummins to consolidate filter plants, cut jobs

COLUMBUS, Ind. — Cummins Filtration, a division of diesel engine manufacturer Cummins Inc., said Tuesday it is consolidating a “significant” portion of its North American filter assembly operations into one of its Mexican plants over the next several months, meaning the loss of about 400 jobs.

Oil and fuel filter assembly operations at its plant in Lake Mills, Iowa, will be moved to San Luis Potosi, Mexico, beginning in November. The company also is considering moving additional assembly work from its filtration plant in Cookeville, Tenn., but a final decision has not yet been made.

About 400 workers at the Iowa plant will lose their jobs between November 2009 and March 2010. Other operations at the Iowa plant, and about 110 people that run those operations, will remain there.

“The filtration industry has become increasingly price sensitive in the past several years, and the recent reduction in demand has heightened the need for us to take decisive action to make our business more cost competitive, both for the present and well into the future,” said Rich Freeland, president of the components business, which includes Cummins filtration.

Cummins Filtration currently employs about 330 people in San Luis Potosi.

Cummins Filtration is the largest of four businesses that comprise the Cummins Components group. The Components group has been among the hardest hit of Cummins’ business segments in recent months, as the global demand for diesel engines and related components has plummeted over the last three quarters.

Components sales were down 41 percent in the second quarter of this year, compared with the same period in 2008. Cummins Filtration sales declined 37 percent.

Shares rose $1.10, or 2.4 percent, to $47.84 in midday trading.