July 31, 2018

Tariffs, Rising Commodity Prices Cost Cummins $100M

Exports to China make up about 10 percent of Cummins’ sales revenues  - WTIU-WFIU News

Exports to China make up about 10 percent of Cummins’ sales revenues

WTIU-WFIU News

Indiana-based engine manufacturer Cummins reached a quarterly revenue record this week of $6.1 billion, but its overall earnings are projected to be slightly lower than anticipated because of the country’s ongoing trade disputes.

About 80 percent of the equipment manufactured at Cummins’ Seymour plant goes to global markets. That means the increasing list of tariffs the U.S. is placing on Chinese goods and vice versa is having a significant effect on the company.

The company’s quarterly earnings report says recent tariffs and increased commodity prices are costing them about $100 million.

Director of External Communications Jon Mills says the company is still trying to figure out how to mitigate those costs.

“It’s going to impact our customers, and really when you look at what the tariffs are at the very basic level, it’s a tax,” Mills says. “And, that tax will get passed down inevitably. And, it gets passed down from the businesses, the customers, the supply chain, all the way down to the consumer. So not only will it have an effect on our company, it will have an effect on quite possibly the economy.”

Cummins CEO Tom Linebarger wrote in a New York Times opinion piece last week that jobs in Seymour and other Cummins facilities across the country could be at stake if the tariffs continue.

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