St. Anthony: Power generating a lot of sales for Cummins
- Article by: NEAL ST. ANTHONY
- Star Tribune
- December 1, 2013 - 5:58 PM
Earlier this month, Indiana-based manufacturer Cummins Inc. announced a new family of generators, designed for small commercial and residential properties that operate on natural gas or liquid propane.
And that’s a big deal, because they are designed and manufactured here.
The Twin Cities is headquarters for low-profile Cummins Power Generation, a Cummins operating division that employs hundreds in Fridley and Shoreview.
The global design-and-manufacturing business will generate about $3 billion in sales this year from increasingly efficient generators that run on everything from diesel fuel to natural gas.
A new model even powers a sewage treatment plant in Iowa that’s fueled with methane gas captured from sewage. Now that’s a virtuous circle with industry and the environment.
Power-generation sales overall are down this year for Cummins due to softer demand from Brazil, China and Africa. But the U.S. market has been strong.
“We will break all kinds of [production] records in Minnesota thanks to U.S. demand,” said Tony Satterthwaite, president of Cummins Power Generation. “In the Fridley plant, we will be above $1 billion production value. We’ve put $100 million in capital investments in Minnesota over the last four years.”
Back in 2008, amid the Great Recession, Cummins Power Generation was forced to cut about 230 workers in 2008.
Thanks to strong global demand that resulted in $3.3 billion in sales last year, Cummins Power employment and production has rebound sharply. It is expected to finish the year with more than 1,500 Minnesotans on the payroll.
Cummins Power produces about a third of its production value in Minnesota.
If it were an independent public company, it would have ranked No. 20, larger in sales than Minnesota-based Fastenal and Donaldson, on the Star Tribune 100 list of the state’s largest public companies.
In November, Cummins Power Generation announced a new family of generator sets, conceived and birthed in Fridley, that operate on natural gas or liquid propane, and are specifically designed for residential and light commercial use. Cummins Power long has made backup power generators for businesses, including hospitals, data centers, airlines and grocery stores where emergency power is critical.
“Natural gas is one of the fastest-growing energy businesses in America and globally,” Satterthwaite said. “It’s becoming popular for fixed-location standby power where people can hook it up to the natural gas pipeline. If the electric grid fails, natural gas doesn’t. And it’s cheaper [and cleaner] to run than diesel. We see that in housing and small business. We’re also using larger units from powering facilities such as hospitals, ethanol plants, sewage treatment plants where we provide backup or combined heat and power that’s really efficient.”
Cummins, founded by a self-taught Indiana mechanic in 1919 who was trying to invent a better truck engine, has cleaned up its act a lot since the days of dirty diesel. The Minnesota roots go to the old Onan Corp., a manufacturer of generators. Cummins, best known for its truck engines, acquired the former Onan in 1986.
Cummins tells investors and the public that the road to long-term financial success is rooted in the production of cleanest and most fuel-efficient products, the company said in a statement: “We view new regulations not as a burden but rather as an opportunity to leverage the full extent of our technical expertise and leadership on behalf of our customers.”
Neal St. Anthony • 612-673-7144
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