Cummins Shuts Down Southern Indiana Plants, Cuts Employee Salaries

Companies across the U.S. are furloughing and firing workers in response to cuts in profits from the coronavirus pandemic. One Indiana-based company is taking pay cuts at all levels.

Engine manufacturer Cummins is experiencing a lack of demand in the markets the company serves.

U.S.-salaried employees' earnings are being cut 10 to 25 percent and include a reduction in hours. Directors will have a 25 percent decrease in wages, and CEO Tom Linebarger will be taking a 50 percent cut. The reductions in salaries are for the second quarter and the third if necessary.

Spokesperson Jon Mills says the broad move had to be made swiftly to get quick results.

“So taking that action now helps us protect the viability of the company and also mitigate effects on customers and the workforce overall,” says Mills.

Cummins had to also temporarily shut down the company’s four southern Indiana facilities.

The company says employees who are laid off will still receive medical insurance for up to 90 days.

Mills says, starting this week, the shutdowns will be staggered.

“We’re hoping that at this point as scheduled that all plants would reopen May 4, so about three weeks,” he says.

Mills adds while traditional production is taking a hit, the company is finding ways to help during the novel coronavirus pandemic including a filtration material that’s used in heavy-duty diesel engines being repurposed to help fill a health care need from N95 respirator mask shortage.

The Fortune 500 company employs more than 10,000 Hoosiers throughout the state.

CORRECTION: This story has been updated with the correct pronunciation of  Tom Linebarger's last name.

Contact Samantha at shorton@wfyi.org or follow her on Twitter at @SamHorton5.