Cummins Inc. is temporarily shutting down all of its southern Indiana manufacturing plants beginning next week in a staggered schedule in response to the market disruptions caused by the COVID-19 pandemic.
The shutdown includes the Columbus Engine Plant, Fuel Systems Plant (FSC and XPC), Seymour Engine Plant and Columbus MidRange Engine Plant, said Jon Mills, Cummins spokesman.
The announcement affects about 2,000 employees in southern Indiana, the company said. The layoff would mean the employees will not be paid by Cummins but will continue to have medical, dental and life insurance benefits continue for 90 days, Mills said.
The plant closings are being staggered to ensure the company builds enough inventory to meet customer demand, according to a company message to employees. Planned reopening for all of the plants is scheduled for May 4, subject to change depending on demand, the company statement said.
The company’s southern Indiana warehouses will remain open during the shutdown to support aftermarket operations, the statement said. The company also said all technical centers, parts distribution centers and locations also will stay open while adhering to all cleaning and safety measures.
Cummins’ MidRange Engine Plant in Walesboro, with about 900 employees, has been on a two-week shutdown since March 20. Mills said the plant supplies a facility in Mexico with the Dodge Ram engine. Fiat Chrysler, the maker of the Dodge Ram, had temporarily halted production in North America due to the COVID-19 pandemic.
Mills said if Fiat Chrysler resumes production April 13 as the company has predicted, the Cummins MidRange Engine Plant would return to work April 16.
Many automakers experienced a significant decline in sales in March as stay-at-home orders in the United States expanded and fears over the virus impacted dealerships, according to The Associated Press.
Fiat Chrysler on Thursday reported a 10% decline in sales during the first quarter of 2020 with strong revenues in January and February being “more than offset by the negative economic impact of the coronavirus in March,” the company said.
Ram pickup trucks, however, were a “bright spot” with sales rising 7% during the first quarter to 128,805 vehicles.
General Motors reported a 7% decline in sales in the first quarter with a sharp decline in March.
The drops in sales, if they continue, could impact how much automakers order from other suppliers or engine makers, like Cummins.
On Friday, Cummins announced it will reduce the pay and hours of its employees in the United States due to lower demand and customer shutdowns in several countries related to the COVID-19 pandemic.