Cummins halts new engine line

COLUMBUS, Ind. — Cummins Inc. will cut at least 500 jobs by mid-2002 and halt development of a new engine line as it continues restructuring.

Tim Solso, chairman and CEO of Columbus-based Cummins, said about 200 of the latest job cuts would be complete within 90 days. The company offered no details on where the cuts would occur.

He said Cummins will take a special, pre-tax charge in the second quarter of $100 million to $120 million due to the cancellation of the plans for a heavy duty 10- to 13-litre engine and the personnel cuts.

Solso said the decisions will reduce costs about $150 million over two years.

Instead of developing a new engine, the company will maintain with existing platforms as it works to meet tighter emissions standards.

Cummins’ decision to end the engine-development program comes only a month after it canceled plans for an engine venture with Navistar International Corp. The two companies had been working on engines aimed at meeting new federal diesel emission standards set to take effect next year.