Cummins CEO moves company forward after record civil emissions fine
COLUMBUS, Ind. — Cummins Inc. CEO Jennifer Rumsey is moving the engine-maker and power distribution company forward after paying a record civil fine for emissions cheating that she said brought some over-the-top federal criticism.
Cummins in December settled a 4 ½-year-old case by paying a civil fine of $1.675 billion to the Environmental Protection Agency. About 1 million engines in Ram pickup trucks — Cummins’ biggest-selling engine program — contained data-defeating emissions software. The company in January agreed to pay California $175 million in the same case.
Together, the fines amounted to the second largest for Clean Air Act violations in history. Cummins’ fine trailed a $2.8 billion criminal penalty assessed of Volkswagen AG over the “Dieselgate” scandal.
“I am disappointed, frankly, at the number and some of the tone given how we did try to work through this,” Rumsey said Tuesday in an interview at company headquarters. “But we’re moving forward. We haven’t slowed down on our strategy.”
In a Dec. 22 news release, U.S. Attorney General Merrick Garland effectively said Cummins put its customers’ health at risk.
“Defeat devices on some Cummins engines have caused them to produce thousands of tons of excess emissions of nitrogen oxides. The cascading effect of those pollutants can, over long-term exposure, lead to breathing issues like asthma and respiratory infections,” he said.
In many cases, such comments get attributed to lower-ranking Justice Department officials.
Balancing strategy between legacy and future products
Rumsey’s strategy is balancing its legacy business as the world’s largest maker of diesel engines with funding advanced powertrain systems that can run on a range of alternative fuels and standing up an internal unit called Accelera focused on zero-emission technologies.
A 25-year Cummins veteran, Rumsey was named the company’s first female CEO in July 2022. She is just the seventh CEO in the company’s 105-year history. Rumsey became board chair in August.
“I think about the first two years as CEO, and I came into the role really clear with a focus on purpose, people and impact. That really was the centering driver for my career.”
The past 20 months have been busy. From ingesting the $3.7 billion acquisition of Meritor Inc. announced in February 2022, five months before she took over from her predecessor — and mentor — Tom Linebarger to rebranding the former New Power division into Accelera in March 2023 and recently completing the spinoff of a successful but ill-fitting filtration business, Rumsey didn’t exactly ease into the job.
Fuel-agnostic rebranding
Cummins is investing $1 billion in manufacturing upgrades and branding as HELMS its next-generation X15 engine platform. The same fuel-agnostic strategy applies to a new X10 engine family that replaces nine- and 12-cylinder engines.
“HELMS stands for High Efficiency, Low Emission Multi fuel. These are going to be really innovative products that meet our customers’ diesel needs today with higher efficiency and let them move to these alternate fuels,” Rumsey said.
HELMS starts with a natural gas version that boasts fewer emissions. A diesel version compliant with 2027 EPA standards for smog-forming nitrogen-oxide emissions follows. A hydrogen fuel iteration comes in 2028. The fuel-agnostic approach also applies to the X10 family.
“We’re seeing a lot of interest in the natural gas engine. [But] it’s not going to be a broad replacement for diesel,” she said.
Pressing a natural gas advantage
“Cummins is the natural gas leader in North America today,” she said.
It has made natural gas engines on its own since buying out joint venture partner Westport Fuel Systems for $20 million in February 2022. A 10-year partnership ended in December 2021. In that time, Cummins sold about 70,000 units. Already, the X15N has sold about 40,000 units in China, where it debuted in 2020.
“That market grew faster than we anticipated in part because of the differential between diesel and natural gas,” Rumsey said.
The X15N was always planned for North America, where major fleet operators like UPS and Walmart are among companies that have tested it. Launch partner Paccar Inc. delivered the first X15N engine in a Class 8 Kenworth T680 in February. Cummins could build 3,000 of the engines this year in Jamestown, New York, earmarked for $452 million of the $1 billion in new engine investment.
Cummins is also building the natural gas ecosystem. It purchased 50% equity in Momentum Fuel Technologies from Rush Enterprises in January 2022 to make Cummins-branded natural gas fuel delivery systems for commercial vehicles.
It also is working with Chevron and Trillium, the natural gas subsidiary of Love’s Travel Stops, to boost production of renewable natural gas (RNG) made from dairy waste and other nonpetroleum sources. RNG’s emission profile can reach negative net-zero carbon.
The abundance of natural gas, both compressed and RNG, gives it a price advantage over diesel, offsetting in about 18 months the high cost of a natural gas-powered system.
Global challenges
While China proved a successful launch site for the X15N, Cummins’ 50-plus years of engine-building joint ventures there has had to hold on for the ride as the country careened from pandemic to recovery to lockdown to a real estate bubble that has weakened the once-thriving economy. Along the way, China implemented tougher engine emission standards.
“We did an incredible job of continuing to operate even with the lockdowns to meet the demand that was there,” Rumsey said. “The China market is the hardest one for us to predict. So far, we’ve called the market gradually improving with replacement cycles and natural gas driving some demand.”
Russia is another matter. Cummins suspended operations, took a $158 million charge against earnings and broke off its joint venture in March 2022, the early days of Vladimir Putin’s invasion of Ukraine. There may be no going back.
“We’re out of business in Russia today,” Rumsey said. “And unfortunately I don’t see any signs of that conflict resolving anytime soon.”
To hear the full Rumsey interview, tune into Truck Tech on Wednesday, March 13, at 3 p.m. EDT on the FreightWaves YouTube channel.
Related articles:
Cummins names Jennifer Rumsey to succeed Tom Linebarger as CEO
Cummins replaces 2 legacy engines with new X10
New Power division rebranded as future tech-focused Accelera
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