When Cummins Chairman and CEO Tom Linebarger speaks during today’s annual shareholder’s meeting, he will largely focus on how the global company is facing the challenges posed by the outbreak of COVID-19, prioritizing employee safety and why he feels the company is well positioned to weather the crisis.

The annual meeting, which is today at 11 a.m., will be held virtually for the first time in the company’s history to protect the health and safety of its employees and shareholders amid the pandemic, the company said.

Cummins is in the midst of charting a course through the public health and economic crisis, and has had to pivot from preparing for what officials believed would be a cyclical downturn in business this year to confronting a global crisis that has upended economies around the world and caused unemployment to surge to levels not seen in the United States since the Great Depression.

The Columbus-based company has already felt the pressure of the pandemic and reduced or temporarily halted operations at production facilities to varying extents around the world. Most southern Indiana facilities have restarted production, except the Cummins’ MidRange Engine Plant, which is expected is expected to reopen Monday.

The MidRange Engine Plant has been shut down since March 20 because Fiat Chrysler had temporarily halted production in North America due to the COVID-19 pandemic. The facility produces engines for a facility in Mexico that makes the Ram pickup truck.

The company also has instituted temporary pay reductions for its U.S. employees due to lower demand and customer shutdowns in several countries related to the COVID-19 pandemic. The company will reassess the reductions at the end of June.

“It’s hard to begin anything about the company and not just note the fact that this is just a very, very challenging time,” Linebarger said. “Everybody has got to change their life in some way. Many of us have been impacted COVID-19 pretty deeply and our employees at Cummins have found ways to work through that.”

Data-driven approach

Linebarger said Cummins is using a data-driven approach to determine when and how the company’s facilities can safely reopen — including providing personal protective equipment for employees and reconfiguring the layout of manufacturing facilities to ensure workers can maintain recommended physical distancing guidelines.

The approach, however, will not be like flipping a light switch and returning to the pre-pandemic normal, but rather a gradual process of phasing in operations, Linebarger said. The main priority of the approach, he said, is to keep employees safe at work.

To do that, company officials are looking at, among other things, community-level infection rates, community restrictions, supply and demand for Cummins’ products and prioritizing areas of the business that provide critical or essential services, including products that power food trucks, ambulances, fire trucks, as well as generators used by hospitals, Linebarger said.

“The way we think about that, of course, is safety first,” he said. “If we cannot provide a safe environment, adequate cleaning, adequate PPE, adequate distancing, we don’t open.”

Cummins has instituted safety procedures in its facilities to protect employees, including health screenings, temperature checks, a hotline with medical personnel for employees who may be experiencing symptoms related to COVID-19, among others.

Linebarger said Cummins has been acquiring personal protective equipment, including masks and temperature guns, over the past few weeks and is confident the company has enough protective equipment to keep workers safe. The company also has purchased a couple machines to make masks and will locate one of them in southern Indiana in the coming weeks so the company can make its own masks for employees, Linebarger said.

Linebarger emphasized the importance of businesses using data to determine how and when to reopen facilities and avoid having to shut down operations again if infection rates start to increase, but cautioned that “there are no perfect answers.”

“We don’t wish things were better and then open broadly,” he said. “We look at the data and put in our processes to protect people and then that determines what we can do because we don’t want to have to shut down again because the infection rates go up so high that everything has to lock down again. That would be more negative impact than just delaying a little longer.”

‘Well-positioned’ to weather the crisis

Linebarger also expressed optimism that the company is “extremely well-positioned” to weather the pandemic, pointing to what he characterized as the company’s financial strength, lower levels of debt, access to capital and diversified global operations.

“A couple things that help the company that maybe aren’t so obvious is that we are global, so we therefore do have some diversification globally,” Linebarger said. “While the crisis is hitting nearly everywhere, the timing is different. So, for example, in China, we were impacted early on. Now, China is actually coming out of the worst part of the pandemic and business is getting better in China.”

Linebarger said the improving results in China, however, likely will not “carry the whole company,” and expects different levels of business across the world as countries emerge from the pandemic at different times and in different ways.

Two weeks ago, the company reported a 17% drop in first-quarter revenue compared to the same period last year. Company officials also have signaled that the second quarter could be challenging and weak levels of demand could persist until global economies start to recover from the COVID-19 pandemic.

“I do think we’re well prepared, but that doesn’t mean that there aren’t challenging times ahead,” Linebarger said.