Cummins San Luis Potosí, innovation and manufacturing hub
By Alejandra Oropeza
April 6, 2022
Cummins to Acquire Meritor to Strengthen Powertrain Component Lineup and Accelerate Development of Electrified Power Solutions
With more than 100 years of presence in the world, Cummins has consolidated in Mexico one of the most important manufacturing and development hubs.
Due to its strategic location, human talent and communication channels, the US capital company has three production plants in San Luis Potosí (Cummins Motores, Cummins Filtración and Cummins Power Systems), a distribution center, a logistics center, a office area (Cummins ABO Latin America) and a Research and Development Center. The entity employs around 4,000 collaborators.
Worldwide, the company has more than 7,500 dealers and 64,000 employees; in Mexico they have a presence in Chihuahua and San Luis Potosí, mainly, where they employ 6,600 people, that is, more than 10% of Cummins employees worldwide.
The company is a leader in the manufacture, sale and service of diesel, gas, electric engines, power generation equipment and related components.
Gaspar Aguilar, Cummins operations leader in Mexico, said in an interview with Mexico Industry that the company's mission is to improve people's lives by promoting a more prosperous world.
"We have a global initiative to arrive, by 2050, with a balance of zero carbon emissions, doing it efficiently and cleanly, and taking care of the community in general."
For Cummins, he said, innovation is essential to meet the requirements of its customers. Among them, Paccar, Mercedes Benz, RAM, Hyundai, Hitachi, Navistar, Volvo, Daimler, TATA, Scania, Nissan, Volkswagen, among many others stand out.
"Not only in the automotive segment, we also have clients such as LiuGong, Doosan, Liebherr, Komatsu, Foton, Google, Microsoft and Amazon," he stressed.
Cummins has five business segments globally: Engines, Generators, Components, New Energies and Distribution.
According to the director, the company is recognized for producing mostly engines, but they also manufacture generators, components, aftertreatment systems and injectors, and with the trend of new energies and technology, they also develop powertrains with electric motors and hybrid systems, for mention a few.
“Cummins is moving forward in this segment and we are selling generators in record numbers. We believe that the country should be moving towards renewable energy and cleaner technologies.”
In Mexico, the company participates in the segments of heavy-duty trucks, medium-duty trucks and buses, light-duty trucks, power generation, oil and gas, mining, marine and agriculture.
The main clients in Mexico are Paccar, Navistar, Daimler, Volvo, Foton and IGSA.
PARTICIPATION IN THE MEXICAN MARKET
Gaspar Aguilar announced that among the objectives that have been set are to gain participation in all the markets in which they do business, take advantage of the strengths of the region and develop talent.
As engine manufacturers they have the best participation in Mexico. He revealed that, of every 100 trucks sold in the country, 60 have an engine manufactured by Cummins; out of every 100 mid-range trucks, 40; for every 100 light trucks, 20; and out of every 100 buses, 10 have an engine manufactured by the company.
“In 2021, 450 million dollars were sold in Mexico, which represents 40% of what is billed in Latin America. Furthermore, our country represents 80% of what is produced in this region,” he reported.
Globally, revenue for the year was $24 billion, up 21% from 2020. 2022 revenue is projected to increase six percent.
In the country they have operations in Ciudad Juárez, Chihuahua, where they produce fuel systems (injectors and pumps) and some components for post-treatment systems (catalysts). They also have an ECM remanufacturing plant and Nox sensors.
In San Luis Potosí they have a plant for remanufacturing engines and manufacturing cylinder heads and crankshafts, filters and automatic transfer switches.
The engine remanufacturing plant is a very important business for Cummins, since, according to the manager, it demonstrates the commitment to the environment, since a remanufactured engine is not only cheaper, it is also cleaner for the environment. because the components are being reused.
Every year, 18,000 remanufactured engines are produced in San Luis Potosí.
"This year we are about to launch a line of new engines that is expected to produce some 7,500 new engines by 2023-2024," revealed Aguilar.
Also, in the state of Potosi they manufacture transfer consoles, which are the ones that manage the energy change of the generating plant when the electricity goes out.
In addition, in the state they have the largest filter manufacturing plant in the world. 50% of world demand is produced here.
They also have a distribution center to serve the market in Mexico, Central America and part of South America, such as Ecuador, Colombia, Chile and Peru; and a research and development center with additive manufacturing, 3D printing, residual stress analysis that helps improve component identification processes to remanufacture them and make processes more efficient.
The New and ReCon plant in San Luis has an area of 157,000 square meters and an area of 143,000 meters for new investments. The one in Ciudad Juárez has 30,000 square meters, where they carried out an expansion to implement new operations.
CUMMINS TO ACQUIRE MERITOR
“Our brand promise is innovation. In the last two years, Cummins has bought companies that produce high-density and long-range batteries, hydrogen production, electric motors, we have made associations with the large fuel companies,” said Aguilar.
In that sense, the company revealed to Mexico Industry that Cummins will invest 3.7 billion dollars to acquire Meritor, a world leader in powertrain, mobility, braking, aftermarket and electric powertrain solutions for the commercial and industrial vehicle markets.
“The acquisition of Meritor is an important milestone for Cummins. Meritor is an industry leader, and adding their complementary strengths will help us address one of the most critical technology challenges of our time: developing economically viable, zero-carbon solutions for commercial and industrial applications,” according to Tom Linebarger, president and CEO of the company.
Among the new projects, he said that, despite the high quality of its workforce, Cummins will not bring electrification processes, or battery or hydrolaser plants to the country because there are no incentives in these types of operations.
What they do analyze is to bring new production lines for traditional processes such as diesel, generation, boards, filters, among others.
"Just as we brought new lines of QSM and M11 engines, which in two or three years will be 50 million dollars, we are thinking of bringing new lines."
He explained that Cummins is definitely in the game of new technologies and investing in all electrification, however, there are no plans to bring production plants for these components because the demand is not happening in Latin America.
Regarding the supply issue, he asserted that Mexico is becoming a center of excellence for suppliers.
“With all the crisis in the supply chain, Cummins is looking for suppliers that it can develop to have a dual sourcing . In other words, we will continue to work with our supplier abroad, but we are going to develop one in Mexico and, surely, due to its proximity to the United States, the country will grow as a supplier base. This is Cummins' blueprint: to help the supply chain grow globally,” he detailed.
Cummins is committed to enhancing the health of the environment, strengthening communities, promoting robust and inclusive economies, as well as a strong commitment to diversity and inclusion.
“We are working so that women have greater representation every day, not only at intermediate levels, but also in managerial positions, with decision-making power. At a general level, 40% of our collaborators are women”.
They are also working to increase the number of employees with disabilities. Today, 1.4% are people with a disability; in 2022 they expect to reach two percent.
“We believe that diversity is good business. This way we are going to have a better company, a better community and a better Mexico”, she concluded.