Cummins Withdraws Financial Guidance Amid Uncertainty
(photo courtesy of Cummins)
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowAmid the economic uncertainty associated with coronavirus, Columbus-based Cummins Inc. (NYSE: CMI) has withdrawn its financial guidance for full-year 2020. That, as the company suspends production at one of its engine plants that is a supplier to Fiat Chrysler Automobiles.
The company says it has shut down production for two weeks at its Midrange Engine Plant in Walesboro in Bartholomew County. The move is in response to the decision by its FCA to shutdown pickup truck assembly until at least the end of March.
Cummins says it is not announcing any other production suspensions or plant shutdowns at this time, however it says it cannot predict if and when further suspensions or shutdowns may arise.
“Possible causes for further shutdowns include changes in customer demand, shortfalls in supplier deliveries and the impact of government regulations or mandates,” said the company statement.
The powertrain manufacturer says financial results for the first quarter will be impacted by these changes in customer production plans, but a more significant concern is the growing uncertainty about demand for the remainder of 2020.
The company says it did not factor in the effects of the coronavirus pandemic when it released its guidance for 2020.
“Cummins is in a strong financial position, we have experienced leaders who have managed through several challenging situations in the past and we will successfully navigate through this difficult period,” said Chairman and Chief Executive Officer Tom Linebarger.
Cummins says as of December 31, 2019, the company held cash, cash equivalents and marketable securities of $1.5 billion and committed borrowing capacity of $2.8 billion under existing revolving credit facilities.