Cummins cuts another 800 jobs, trims officer pay

A month after cutting 600 white-collar jobs, Columbus engine maker Cummins Inc. said today it will eliminate another 800 professional positions by the end of next month and freeze salaries for 2009.

Officers’ salaries will be reduced by 10 percent.

Cummins again will offer a voluntary retirement package to certain professional employees in the United States, then make any remaining cuts from worldwide operations. Eligible employees have until Jan. 23 to volunteer.

This second round of cuts comes as Cummins’ sales are affected by worsening economic conditions. In addition to eliminating jobs, Cummins initiated temporary plant shutdowns, shortened work weeks and extended traditional holiday closing periods during the fourth quarter of 2008.

The company said it will continue to monitor production volumes at its manufacturing plants and take “whatever additional actions are necessary.”

In December, Cummins said it would cut at least 500 jobs. The final tally was 600, bringing the total to 1,400 — or 10 percent of its professional work force. The company said today it also has reduced its hourly work force by more than 600 and cut about 2,500 contract employees.

“It is unfortunate that after five straight years of record performance and greatly improved business fundamentals we are being forced to take these difficult actions,” CEO Tim Solso said in a statement. “While these steps are very painful, they are necessary to keep Cummins competitive through this global recession so we can emerge a stronger company when the economy and our markets recover."

After the reductions, Cummins will be a good position to weather the downturn, Chief Operating Officer Tom Linebarger wrote in a memo to employees, citing the company's "low debt, healthy cash balances and a $1.1 billion revolving credit line for additional liquidity if we need it.

“Based on our understanding of the current economic conditions, we have no plans for further actions at this time,” he wrote.