As we continue counting down to our 100-year anniversary, we are sharing another story to highlight the history of Cummins. In this series, we reflect on our rich history of turning challenges into opportunities.
In the 1970s, the United States enacted a federal law, the Clean Air Act, to protect against the effects of air pollution on the environment and human health. Cummins was taking rigorous steps to pass testing and certification set out by the EPA.
Cummins’ expansion plan would target businesses and opportunities closely aligned with the company’s products and customers. By the late 1970s, Cummins expanded into diverse markets that would create new jobs, generate revenue and become more responsive to its customers.
The launch of the B and C series engines were lighter duty and had fewer parts in comparison to the company’s heavy-duty models. These engines demanded investment.
In 1984, this new technology moved Cummins into a radiator, generator set, driveline component and electronic software manufacturer area – all unfamiliar areas to the engine company. Cummins updated the company’s structure to integrate this venture into the larger corporate strategy. Thus, Power Systems Business (later renamed Power Generation Business) was added to the engine and components businesses.
Cummins purchased 63 percent of the Onan Corporation, a generator set manufacturer in Minneapolis, Minn. (USA), which would become the basis for its Power Generation Business in 1986. Cummins gained a substantial presence in the market and reinforced Cummins’ constant determination amongst competitors.
A control system of a historic Onan generator
The opportunity to supply generator sets and standby power systems to hospitals, computer centers, retail stores, offices and hotels proved beneficial. By 1990, Power Generation generated 15 percent of Cummins’ $3.4 billion sales.
Continuing to expand globally, Cummins pursued international relationships with Brazil and China. In Brazil, after more than a decade of trying, Cummins finally developed an ownership structure with strong government incentives. For China, the Second Auto Works (SAW), China’s largest producer of on-highway trucks was interested in a ten-year license.
Just as Cummins was preparing for profitability, a new Japanese competitor lands in the market to shake things up. The early 1990s proved to be the most trying times since its earliest decades.
Over half the generator sets required by Allied forces during World War II were Onan-produced
Power Generation joined with High Horsepower in 2016 to once again carry the name Power Systems.
Nearly one hundred years after the introduction of the Cummins engine, our journey continues. Follow along, as we continue to explore Cummins’ history of challenging the impossible.