$100M expansion in Seymour to focus on designing new big diesel engines
By Ted Evanoff Posted: July 10, 2010
Cummins will spend $100 million in Seymour ramping up a new design for big diesels used worldwide to power generators and huge vehicles such as mining trucks.
Hiring will begin immediately for nearly 200 engineers to carry out the work in the expanding High-Horsepower Technical Center in this southeastern Indiana city.
The investment in Seymour, announced Friday by the Columbus-based diesel maker, marks nearly $1.5 billion committed by manufacturers for a series of high-profile Indiana expansions in the past year.
Cummins' $100 million stands out because it is one of the few major deals not funded almost entirely by the federal government under recent green initiatives.
While the recession and credit crunch have turned the U.S. Treasury into a key ally for cash-strapped manufacturers, Cummins has stayed profitable through its global reach. Sales abroad account for more than half of its $10.8 billion in annual revenue.
"We see a lot of growth worldwide coming,'' said Cummins spokesman Mark Land. "As we look out well into the future, we have a lot of strength. We're number one or number two in most of these markets. We just see a kind of natural growth."
In Seymour, the expanded tech center will design a new family of big engines in the next few years.
The large diesel and natural gas engines generally range from 600 to 3,500 horsepower. The units are used for power generation, such as backup generators for hospitals and office buildings, and are sold to the marine, oil and gas, and rail industries throughout the world.
Demand in emerging nations in Africa, Asia and the Middle East, Land said, is expected to be particularly strong in markets such as backup power.
In Seymour and Jackson County, where the May jobless rate was 9.6 percent, employment should increase by about 200 by 2015, with the bulk of the new jobs in the tech center. This will raise Cummins' employment in Seymour to about 650 and establish the center as the company flagship for high-horsepower technology, Land said.
Production of the new units will take place in the Seymour engine plant as well as Cummins' facilities abroad, such as plants in Great Britain and China. More jobs could appear in Seymour.
"Once you're committed to a facility and a platform, you're there for the long haul," Land said. "We have 200 new jobs planned today. When we get into full production, that probably will become more jobs.''
Cummins employs 5,600 in Indiana, chiefly in Columbus, and 36,000 worldwide.
In Seymour, the expansion will bring in new machinery and include a 28,500-square-foot addition to the technical center. Work on the expansion will start immediately, with construction expected to be complete by mid-2011.
The Indiana Economic Development Corp. committed up to $2.4 million in performance-based tax credits if all 200 jobs appear. It also offered $100,000 in training grants based on the job plans.
The city of Lawrenceburg, steward of an economic development arm funded by casino revenue, will grant Seymour $1.75 million. Seymour will consider additional tax abatement at the request of the Jackson County Industrial Development Corp., the IEDC reported.