Daimler, Cummins finalize medium-duty engine deal

Daimler AG and Cummins have signed a framework agreement that will result in Cummins building Euro 7 diesel engines for Daimler at Daimler’s Mannheim, Germany, facility.

Daimler Truck AG and Cummins Inc. have signed a framework agreement through which Cummins will assume manufacturing of medium-duty diesel engines for Daimler. The two companies first announced a Memorandum of Understanding (MOU) concerning the global strategic partnership in February.

Under the partnership, Cummins will invest in the further development of the medium-duty engine platform and its global production and delivery starting in the second half of the decade for Daimler Trucks & Buses. Daimler Truck AG will no longer invest its own funds in the further development of its medium-duty engines for the Euro 7 emissions standard.

Cummins will also set up an engine production facility on the site of the Mercedes-Benz Mannheim, Germany plant for local production of Euro 7 medium-duty engines. Production is expected to start in the second half of the decade.

“We are very pleased that we were able to conclude the negotiations for a framework agreement with Cummins so quickly,” said Martin Daum, chairman of the Board of Management at Daimler Truck AG and a member of the Board of Management at Daimler AG. “The cooperation makes engine production at the Mannheim location ready for the future and strengthens our competitiveness at the same time.

“We will develop joint solutions, always keeping the interests of our customers, employees and the company in mind.”

The companies said that the partnership will help maintain jobs at the Mannheim location. Cummins said it will use its existing footprint, strong production and supply chain networks in other regions to be successful in Daimler Trucks’ brands, including those of Daimler Trucks North America.

Daimler aims to increase and accelerate its development efforts on alternative and emerging technologies, including non-diesel engines. In the future, Daimler Truck AG said it will focus on the further progression of zero-emission drive technologies, as well as further development of commercial heavy-duty drivetrains.

As part of the strategic partnership, Daimler Truck and Cummins said they will continue to evaluate additional opportunities for cooperation.

“We are pleased to sign this agreement as we move forward in collaboration to provide the medium duty engine systems for Daimler Trucks and Buses in global markets,” said Tom Linebarger, Cummins chairman and CEO. “Our partnership is a terrific opportunity for both companies to be more competitive, drive global innovation, expand offerings to customers and reduce emissions. We are looking forward to working with Daimler on this and exploring other potential opportunities to grow our respective companies.”