Cummins, Westport form joint venture

VANCOUVER (March 12, 2001) — Cummins Inc. (CUM) and Westport Innovations have formed a 50/50 joint venture to develop and market low-emission, high-performance natural gas engines.

The joint venture will be based in Vancouver.

The companies said Westport will contribute its high-pressure direct injection, or HPDI, technology and other proprietary natural gas technologies, and Cummins will provide its on-highway vehicle medium-duty spark-ignited natural gas engines and proprietary engine related technologies.

The joint venture has design and marketing responsibility for all of Cummins existing medium-duty natural gas products, including the B5.9G, B5.9LPG, and C8.3G engines. These products will continue to be made and distributed by Cummins. In 2000, Cummins sold over 1800 spark-ignited engines, ranging from 150 to 275 horsepower.

In addition, the joint venture will offer HPDI-equipped ISX heavy-duty engines. This product will represent the first natural gas heavy-duty engine capable of generating up to 600 horsepower for the truck market, the companies said.

The companies said they expect the new operation to “profitably capture” significant market share due to rising demand for natural-gas-powered products capable of demonstrating diesel-like performance and reliability.

The companies will share equally in the profits on products developed and sold by the joint venture.

For the first three years of the joint venture, Westport will contribute the required capital and is prepared, under the agreement, to invest up to $50 million over that time.

Westport’s existing technology development projects with other diesel engine manufacturers aren’t affected by the agreement, they noted.