Industry News

Chrysler Bankruptcy Shuts Cummins Plant

May 12, 2009

The ripples of Chrysler’s bankruptcy actions have reached as far as sothern Indiana, as Cummins announced that it is temporarily closing the Columbus MidRange Engine Plant (CMEP) in Walesboro, just outside Columbus.

CMEP is the sole manufacturing site for the 6.7 L 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 May 4, 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 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,” said Jim Kelly, president of Cummins Engine Business. “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.”

The shutdown affects a total of approximately 690 workers at CMEP. Cummins will lay off approximately 610 hourly workers – 560 members of the Diesel Workers Union and 50 members of the Office Committee Union. Cummins said it will 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 May 13. A small staff will be retained through the end of May to complete the shutdown process.

In actions unrelated to the Chrysler bankruptcy, Cummins also announced that it will permanently lay off approximately 110 hourly workers in June at three locations in southern Indiana. They include approximately 30 workers at the Cummins Fuel Systems Plant in Columbus, who will be laid off effective June 1; approximately 50 workers at the Cummins Industrial Center in Seymour, which manufactures high horsepower engines, who will be laid off effective June 1; and approximately 30 workers in the Heavy Duty Machining operation at the Columbus Engine Plant, who will be laid off effective June 29. That operation machines cylinder blocks and heads for heavy duty engines produced by Cummins in Jamestown, N.Y.