Fall 2019: Cummins

Cummins company logo

Our first field trip for the semester was to visit the headquarters of Cummins in Indianapolis on September 20th. Cummins is one of the largest producers of diesel engines in the world. Ivan Iadzi and Michael O Assa-Eck, two of Cummins’ economists spoke of some of the work that they do. One of their major tasks is to project future sales, in large part done by looking at indicators such as GDP and residential housing as well as looking at industry sentiment in the various industries and regions in which they produce and sell. They further analyze and produce reports on various risks the company faces, recently focusing on the potential effects of tariffs and Brexit.

A good deal of the data they work with comes from Oxford Economics as they feel it is accurate and it covers 200+ countries and is quite granular as well, both of which are important for such a large corporation that operates worldwide.

There was an excellent question and answer session in which they discussed questions related to the challenge and strategies of a diesel engine producer in a world in which harm emissions does to the environment. Cummins has invested $500 million into research in diversified power train styles such as electric and fuel cell. They have purchased two U.S. companies and a UK company focusing on this. They also pointed out that for most markets and industries, any shift towards electric transmissions has been mostly gradual and some will simply be more difficult to switch over than others. The one exception was public transportation in China, which rapidly switched their buses from internal combustion engines to electric and now has the vast majority of electric buses in the world.

Laurence McCormack, who works in Government Relations, also spoke to the group and the discussion on emissions transitioned well into his talk. He said that there were a number of issues in which they work with lawmakers on around the world and one of their main objectives is to make sure lawmakers have good information when they are working on legislation that might affect Cummins. This could be immigration and other social issues that make Indiana appear like a modern and welcoming environment for diverse and talented prospective employees to want to work, showing lawmakers the challenges and the realities of policies affecting the environment, and any other issue that affects Cummins.

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