Cummins and Fiat Wrap Up Diesel JVs

20 July 2008

Cummins Inc. has concluded its joint ventures with CNH Global N.V. (CNH) and Iveco N.V., two Fiat Group companies. Under the new agreement, Cummins will purchase CNH’s 50% equity stake in Consolidated Diesel Company (CDC) and will sell its interest in the European Engine Alliance.

CDC, located in Whitakers, NC, will become a wholly-owned entity of Cummins Inc. Cummins entered the joint venture with Case Corporation in 1980, and has produced more than 2.7 million mid-range engines.

The European Engine Alliance (EEA) was established in 1996 as a joint venture between Cummins and two Fiat Group companies, Iveco N.V. and New Holland, which is now CNH Global N.V., to develop a new generation of 4,- 5- and 6-liter engines. EEA includes manufacturing assets in Turin, Italy. Cummins will sell its one-third interest in the EEA to Fiat Powertrain Technologies (FPT).

This transaction confirms Fiat Group’s strategy to further strengthen its engine and transmissions capabilities under the guidance of FPT. Full control of EEA will enable FPT to develop the new generation of NEF engines. At the same time, FPT has already started gradual substitution of the CDC engines leveraging its new product portfolio. Moreover, this transaction enables CNH and Iveco to take advantage of Fiat Group’s synergies and to further leverage on FPT’s key technology developments particularly towards overcoming the challenges of increasing engine emission regulations and attention on fuel consumption.

—Alfredo Altavilla, CEO of FPT