The stylish office tower in Indianapolis looks more like the headquarters of a tech company than a business that lives in diesel fumes. Cummins was born a century ago in Columbus, Indiana, where the company's foundation funded designs by I.M. Pei and Eero Saarinen for schools, fire stations and a library.
It is surprising that the leading U.S. maker of diesel engines is run by a native of Silicon Valley. The battle for the truck engine market will be fought on environmental grounds, with Cummins taking on seemingly greener upstarts.
Thomas Linebarger is the chief executive of Cummins for the past decade.
He says thatTeslas won't drive our economy. Linebarger will be ready when battery-powered or hydrogen- fueled trucks replace diesel entirely.
The 59-year-old executive began laying the groundwork for an evolutionary shift at Cummins six years ago, acquiring companies with battery, hydrogen and fuel-cell expertise and setting up a new division focused solely on next-gen powertrains. Linebarger is betting that Cummins' large global customer base will help it lead the market for cleaner trucks, buses, boats, trains, mining equipment and generators through the 2020s and beyond.
He points out a large conference room window as a heavy winter rain soaks, and says that we need solutions that will get things to market. We understand the range of those solutions more than anyone else.
Cummins is a supplier of hydrogen fuel cell systems.
Cummins Inc.A variety of approaches is needed because the company has a large product line. Cummins supplies more than a million heavy-duty engines each year to power buses, Dodge pickup, Kenworth semi trucks, Bradley M2 Army vehicles, and more.
Diesel has environmental challenges. Black soot is a cause of heart and lung disease, and is caused by carbon dioxide. California wants commercial fleets to replace diesel trucks with zero-emission models by the year 2024. The EPA wants to phase in stricter requirements for heavy trucks.
Cummins has been able to develop cleaner diesel systems to meet tighter pollution rules over the past 20 years. It had a net income of $2.1 billion in 2021. Its market cap is $30.5 billion.
Transitioning the heavy-duty vehicle market from diesel fuel won't be cheap or fast. The winner in the long-haul market may not be the battery-powered trucks that Musk is promising. It could be engines burning hydrogen. It's quite possible that someday Cummins trucks will be more eco-friendly thanTesla's.
Linebarger wasn't likely to run a manufacturer. When he was a child, the Silicon Valley region was defined by IBM and Hewlett-Packard. His mother went back to school to get her occupational therapy degree after her parents divorced.
Linebarger got his undergraduate degrees in management and mechanical engineering at the college he attended. He completed a master's degree in manufacturing science and an internship at Cummins.
Linebarger mixes conventional and high-tech options to attack carbon and cut exhaust pollution. Cummins plans to keep improving the efficiency of its diesel engine and generator lines while also designing them to burn cleaner fuels including natural gas and hydrogen made from renewable sources. They are readying hybrid options that boost fuel efficiency without the huge battery of an all-electric truck.
We can design efficiency into the system in a way that we couldn't 10 or 15 years ago, thanks to the techniques we have with big data and analytics. Linebarger says they want to improve the efficiency of the engines by 20% or 25% by the end of the year. You need to be perfectly efficient to have hybridization and fuel.
Linebarger created a New Power division at Cummins in order to develop battery and fuel-cell power systems and hydrogen generation technology that may replace diesel in the near future. Cummins bought fuel-cell and hydrogen developer Hydrogenics, took a stake in Sion Power, and started a joint venture with Chinese oil company Sinopec to produce hydrogen from renewable sources. New Power is led by Amy Davis and focuses on batteries and motors for light and medium trucks, and hydrogen fuel-cell systems for rail applications and stationary power generation. She says long-haul hydrogen- fueled powertrains for semis are in the works but won't be a core business until the late 2020s.
With advances in battery packs and offerings for lighter commercial vehicles, fleet operators are getting their head around last-mile trucks, but are concerned about replacing diesel systems in semis and heavy-duty trucks. Musk's planned semis that go up to 500 miles are not realistic. The size of the battery isn't the only thing that gets in the way. The lack of charging stations is what it is.
Customers asked what about my long haul. I couldn't charge three of my trucks at the same time because of the system that's out there. The fuel-cell electric drivetrain can be used with the battery work going on.
The company on February 22 announced a plan to buy Meritor in a deal valued at $3.7 billion.
Cummins sees battery power as a viable option for heavy trucks that need only 200 miles of range, such as rigs hauling cargo from ports or running fixed delivery routes. Hydrogen power is more attractive for trucks that need to travel 300 miles or more between fuelings since it is lighter than a battery pack. Hydrogen's refueling time can be comparable to diesel's.
“I look at decarbonization and say that’s a growth opportunity for Cummins, because now innovation is going to matter a lot”
The New Power of Cummins sold $116 million last year. The combined sales of Rivian, Arrival, and Nikola is greater than the total revenue of the company.
Linebarger has laid out a path that blends steady efficiency gains for conventional engines and readying next-generation technology.
Heavy-duty hydrogen systems are being built by Cummins.
Cummins Inc.Thousands of potential customers have been lined up by the company for the Semi, which is at least two years behind schedule. The lack of experience of the EV maker in working with large fleets is a concern.
Many of the people who have dealt with Cummins over the years are from this installed base of customers. If the company says it has a compelling hydrogen-powered product and the fuel needed to power it, that's likely to be taken seriously by companies it's already supplying.
Cummins sees engineering innovation as a core part of its history, like other manufacturers such as Ford, Toyota and Harley- Davidson. The company was founded in 1919 and initially licensed a design from a small firm before developing its own diesel engines that could run pumps, grind grain or power a saw. The Model H engine became an industry standard after Cummins pushed into the truck market.
Linebarger says that Cummins has done best when innovation is required.
The U.S. Clean Air Act of 1970 made diesel makers clean up their products, which led to increased business for Cummins. As carbon dioxide becomes the enemy, Linebarger expects a similar outcome.
Decarbonization is a growth opportunity for Cummins, because innovation is going to matter a lot.
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