Cummins Inc. announced today that it will temporarily close its Columbus MidRange Engine Plant for a month or longer and idle at least 610 workers as a result of Chrysler LLC’s bankruptcy reorganization.
The plant in Walesboro, just south of Columbus, is the sole manufacturer for the 6.7-liter turbo diesel engine used in the heavy-duty Dodge Ram pickup truck. The facility will close May 15 and won’t reopen until Chrysler resumes production at its Dodge Ram plant in Saltillo, Mexico.
The Mexico plant, which closed Monday, is expected to be idle for at least four weeks and could remain closed for nine weeks or longer, Cummins said.
The layoffs affect 690 workers in Walesboro – 560 Diesel Workers Union members, 50 Office Committee Union members and 80 non-union workers. Cummins said it would try to find work for the 80 non-union workers at other plants if possible.
“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,” Jim Kelly, president of Cummins’ Engine Business unit, said in a written statement.
Chrysler said in its bankruptcy filing late last month that it owes Cummins $43.9 million, placing Cummins among its top unsecured creditors.
Cummins expects some of that money will be covered by the U.S. Treasury Department’s new Supplier Support Program, which the company entered earlier this month.
Unrelated to the Chrysler bankruptcy, Cummins also announced today that it will eliminate 110 hourly workers in June at three Indiana locations. The cuts include 50 workers at its industrial center in Seymour, and 30 workers each at its fuel-systems plant and heavy-duty machining operations in Columbus.
The reductions are in response to further weakening demand for engines and components brought on by the global recession, the company said in the statement.
The diesel engine manufacturer reported in April a first-quarter profit of $7 million – down 96 percent from the same period a year ago. Revenue fell 30 percent, to $2.4 billion, and sales declined in all four of the company’s business segments, with the diesel engine and components divisions taking the biggest hits.