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Sep 16, 2023

Growing interest for products produced at Cummins Jamestown Engine Plant

Aug 8, 2023 Cummins is seeing growing interest for at least one of the items soon to be made at its Jamestown Engine Plant. During a recent conference call with investor analysts, Cummins CEO Jennifer

Aug 8, 2023

Cummins is seeing growing interest for at least one of the items soon to be made at its Jamestown Engine Plant.

During a recent conference call with investor analysts, Cummins CEO Jennifer Rumsey was asked about customer interest in the 15-liter engine in North America. That engine will be built at the Jamestown Engine Plant starting next year after a $452 million project to install a new assembly line for the X15N fuel agnostic engine. At the same time the Jamestown Engine Plant’s current assembly line is churning out engines for which there is still solid demand.

“As you noted, I think there’s growing interest in what I call some of these bridge technologies, alternative fuels and engines, the natural gas product,” Rumsey said. “We’re seeing that growth in China. We’re going to launch that here. We expect to see some success in that market and looking at hydrogen engines, we’re developing those and trying to figure out in which markets they’ll play a role. It’s slow going because of the infrastructure build-out that’s required. And so we’re really focused on investing to have the right products, but at the right time. And so you’re still going to see a lot of demand for diesel in the next few years.”

Cummins is expected to maintain production of 270,000 to 290,000 heavy-duty engines in 2023, but is foreseeing a decrease in North American heav-duty truck production in the fourth quarter. Engine segment revenues in the second quarter of 2023 were $3 billion, an increase of 8% from the second quarter of 2022. Revenues in 2023 are expected to increase 2% to 7%.

“In the short time since we launched our new natural gas product in China, our share has been ramping up with strong customer reception in the heavy-duty market, and we look forward to launching the 15-liter natural gas engine in North America in 2024,” Rumsey said.

Investor analysts also had questions about the operating margins in the engine business. Mark Smith, company CFO, said the company is investing more in engineering in the engine business to support the additional business Cummins has won and meet future emissions standards. Materials cost more than they have in the past, driving some increased cost in the engine business as well. Analysts also questioned the company’s projections about truck production in the fourth quarter.

Smith said production is expected to decrease because there are holiday periods when plants are closed and a possible order slowdown starting early next year.

“As we look to next year that the market size is going to start to come down a little bit,” Rumsey said. “As I said, I think it’s a softer cycle than we would typically see, but it’s at a very high level right now. Our Jamestown (plant) is producing as much as they can.”

Whatever break Jamestown Engine Plant employees have in the fourth quarter likely won’t last long. Orders have already begun coming in for the new engine. In August, PACCAR and Cummins jointly announced that the Cummins X15N natural gas engine will be used in new Kenworth and Peterbilt trucks. The engine will include the integration of the Cummins Clean Fuel Technologies fuel delivery system. Cummins also has a memorandum of understand with Tata Auto Group for hydrogen-fueled engines. When operating on renewable natural gas, also known as RNG or biomethane, the X15N engine will be able to achieve major reductions in the lifecycle greenhouse gas emissions of Peterbilt and Kenworth trucks.

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