Cummins to temporarily close plant due to Chrysler bankruptcy

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Cummins Inc. on Thursday, May 7, announced a number of job actions affecting its manufacturing operations in Southern Indiana. The company says it is temporarily closing the Columbus MidRange Engine Plant (CMEP) in Walesboro, just outside Columbus, as a result of Chrysler’s decision last week to idle its manufacturing operations while it undergoes bankruptcy reorganization.

CMEP is the sole manufacturing site for the 6.7-liter turbo diesel engine used in the heavy-duty Dodge Ram pickup truck. The plant will close effective May 15 and be down until Chrysler resumes pickup truck production. Chrysler’s Dodge Ram manufacturing plant in Saltillo, Mexico — which closed Monday, May 6 — is expected to be idle for at least four weeks, and Chrysler has indicated that its entire manufacturing operation could remain closed for nine weeks or longer.

The shutdown affects a total of about 690 workers at CMEP. Cummins says it will lay off about 610 hourly workers – 560 members of the Diesel Workers Union and 50 members of the Office Committee Union. The company says it plans to redeploy as many of the 80 exempt employees in the plant as possible throughout its Southern Indiana operations. The last work day for most of the hourly employees at CMEP will be Wednesday, May 13, according to the company; a small staff will be retained through the end of May to complete the shutdown process.

“The engines we produce for Chrysler make up virtually all the demand at CMEP, and without the Chrysler production, it is not economically feasible to operate the plant,” says Jim Kelly, president of the Engine Business for Cummins. “There is considerable uncertainty around Chrysler and when it will resume manufacturing operations, which makes it necessary for us to take this difficult action. At the same time, the Dodge Ram is a valuable part of Chrysler’s product portfolio, and the Cummins turbo diesel engine for the heavy-duty pickup has been a key part of the Ram’s success for more than two decades. We are hopeful that once Chrysler emerges from its reorganization, demand for our award-winning engine will return.”

In actions unrelated to the Chrysler bankruptcy, Cummins also announced Thursday, May 7, that it will permanently lay off about 110 hourly workers in June at three locations in Southern Indiana:

  • About 30 workers at the Cummins Fuel Systems Plant in Columbus will be laid off effective June 1;
  • About 50 workers at the Cummins Industrial Center in Seymour will be laid off effective June 1. The plant manufactures high-horsepower engines used in industrial, power generation, marine and military applications; and
  • About 30 workers in the Heavy Duty Machining operation at the Columbus Engine Plant will be laid off effective June 29. The operation machines cylinder blocks and heads for heavy-duty engines produced by Cummins in Jamestown, N.Y.
  • Cummins says these job reductions are in response to further weakening demand for engines and components as a result of the global recession, and are consistent with its efforts to align manufacturing capacity and costs with that lower demand.