Cummins Inc. (CMI): History, Ownership, Mission, How It Works & Makes Money

Ever wondered how a company can shape industries and power the world? Cummins Inc., with its impressive $34.1 billion in revenue for 2024, stands as a global leader in power solutions, but how exactly does it operate and generate such substantial income? Dive in to discover the rich history, ownership structure, and the core mission that drives this powerhouse, plus explore the innovative strategies that keep Cummins at the forefront of the industry.

Cummins Inc. (CMI) History

Founding Timeline

Year established

The company was established in 1919.

Original location

The company was founded in Columbus, Indiana.

Founding team members

The company was founded by William Glanton Irwin and Clessie Lyle Cummins.

Initial capital/funding

William Glanton Irwin provided the initial funding for the company.

Evolution Milestones

Transformative Moments

The company has undergone several transformative moments that have shaped its growth and direction:

• Early Adoption of Diesel Technology: Clessie Cummins' early belief in the potential of diesel engines, at a time when gasoline engines dominated, set the stage for the company’s future success. His persistence in developing and refining diesel technology laid the groundwork for the company to become a leader in the industry.
• Strategic Partnerships: Forming strategic partnerships with truck manufacturers and other industry players allowed the company to integrate its engines into a wider range of applications. These collaborations expanded the company's market reach and enhanced its reputation for reliability and performance.
• Focus on Innovation: A continuous commitment to innovation has enabled the company to stay ahead of the competition and meet evolving customer needs. Investments in research and development have led to breakthroughs in engine technology, emissions reduction, and alternative fuel solutions.
• Expansion into New Markets: Expanding into power generation, components, and other related businesses has diversified the company’s revenue streams and reduced its dependence on the cyclical engine market. This strategic diversification has made the company more resilient and better positioned for long-term growth.
• Emphasis on Sustainability: Recognizing the importance of environmental stewardship, the company has made significant investments in emissions reduction technologies and alternative fuel solutions. This commitment to sustainability has not only helped the company meet regulatory requirements but has also enhanced its brand image and attracted environmentally conscious customers.

To learn more about the company's investors, visit: Exploring Cummins Inc. (CMI) Investor Profile: Who’s Buying and Why?

Cummins Inc. (CMI) Ownership Structure

Cummins Inc. operates as a publicly traded entity, with its shares available on the New York Stock Exchange under the ticker symbol CMI. This structure allows a diverse range of investors, from individuals to large institutions, to hold ownership in the company.

Cummins Inc.'s Current Status

Cummins Inc. is a publicly traded company. As such, it is subject to regulations and reporting requirements by the Securities and Exchange Commission (SEC). Public companies have a broader investor base and typically greater access to capital markets compared to private companies.

Cummins Inc.'s Ownership Breakdown

The ownership of Cummins Inc. is distributed among various shareholders, including institutional investors, mutual funds, and individual investors. The following table summarizes the significant ownership percentages.

Cummins Inc.'s Leadership

The leadership team at Cummins Inc. is responsible for setting the strategic direction of the company and overseeing its operations. Key figures include:

• Jennifer Rumsey: Chair and Chief Executive Officer
• Mark Smith: Vice President and Chief Financial Officer

For more insights into investor profiles and ownership dynamics, check out: Exploring Cummins Inc. (CMI) Investor Profile: Who’s Buying and Why?

Cummins Inc. (CMI) Mission and Values

Cummins Inc. aims to innovate and deliver dependable solutions that improve people's lives and foster a more sustainable world. The company's values emphasize integrity, diversity, and caring for the communities it serves.

Cummins Inc.'s Core Purpose

Official mission statement

Cummins Inc.'s mission statement is: 'To innovate for our customers’ success by powering their opportunities, solving their challenges and protecting our planet.'

• Powering Opportunities: This involves providing the power solutions that enable customers to succeed in their respective endeavors.
• Solving Challenges: Addressing and resolving the complex challenges customers face through innovative and reliable solutions.
• Protecting our Planet: Committing to environmental stewardship by developing sustainable products and practices.

Vision statement

Cummins Inc.'s vision is to create a world that’s always on by:

• Being a carbon-free power provider
• Being a growth-focused company
• Innovating for customers’ success

Company slogan/tagline

Cummins Inc.'s slogan is 'Powering a World That's Always On.'

• This slogan reflects the company's commitment to providing continuous and reliable power solutions.
• It encapsulates the always-on nature of modern life and the need for dependable power to support it.

For more in-depth information, visit: Mission Statement, Vision, & Core Values of Cummins Inc. (CMI).

Cummins Inc. (CMI) How It Works

Cummins Inc. operates as a global power leader, designing, manufacturing, distributing, and servicing a broad portfolio of power solutions.

Cummins Inc.'s Product/Service Portfolio

Cummins Inc.'s Operational Framework

Cummins creates value through a vertically integrated operational framework:

• Design and Engineering: Cummins invests significantly in research and development to innovate new engine technologies, alternative power solutions, and components.
• Manufacturing: The company operates manufacturing facilities globally, ensuring efficient production and quality control.
• Supply Chain Management: Cummins manages a complex global supply chain to source components and materials, optimizing cost and delivery times.
• Distribution and Service Network: A vast network of distributors and service locations ensures product availability, maintenance, and support for customers worldwide.
• Customer Support: Cummins provides extensive customer support, including technical assistance, training, and warranty services.

Cummins Inc.'s Strategic Advantages

Cummins has several strategic advantages that enable its market success:

• Brand Reputation: Cummins has a strong reputation for quality, reliability, and durability, built over 100 years.
• Technological Innovation: The company's continuous investment in R&D enables it to stay ahead of the competition with advanced engine technologies and alternative power solutions.
• Global Presence: Cummins' global manufacturing and distribution network allows it to serve customers in diverse markets.
• Diverse Product Portfolio: The broad range of products and services enables Cummins to cater to various customer needs and applications.
• Strong Customer Relationships: Long-standing relationships with key OEM partners and end-users provide a stable customer base.

For insights into Cummins Inc.'s financial performance, see: Breaking Down Cummins Inc. (CMI) Financial Health: Key Insights for Investors

Cummins Inc. (CMI) How It Makes Money

Cummins Inc. primarily generates revenue through the design, manufacture, distribution, and servicing of diesel and natural gas engines, electric power generation systems, and related components and technologies.

Cummins Inc.'s Revenue Breakdown

Cummins Inc.'s Business Economics

Cummins operates with a diversified business model that leverages its global presence and extensive product portfolio. Key aspects of its business economics include:

• Pricing Strategies: Cummins employs value-based pricing, reflecting the performance, reliability, and durability of its products. Prices vary based on engine specifications, application, and regional market conditions.
• Cost Management: The company focuses on efficient manufacturing processes, supply chain optimization, and strategic sourcing to manage production costs.
• Aftermarket Services: A significant revenue stream comes from aftermarket parts and service, providing consistent income throughout the product lifecycle.
• Technological Innovation: Investments in research and development drive product innovation, allowing Cummins to maintain a competitive edge and meet evolving emission standards and customer needs.
• Economic Factors: Cummins' performance is influenced by global economic conditions, including GDP growth, industrial production, and commodity prices. Demand for its products is closely tied to construction, mining, agriculture, and transportation sectors.

Cummins Inc.'s Financial Performance

Cummins' financial health is reflected in its key performance indicators:

• Revenue Growth: Cummins reported a revenue of $34.1 billion in 2024, representing a 7% increase compared to 2023.
• Profitability: Net income for 2024 was $2.5 billion, or $17.55 per diluted share, compared to $2.2 billion, or $15.26 per diluted share, in 2023.
• Cash Flow: The company generated strong cash flow from operations, enabling investments in growth initiatives, acquisitions, and shareholder returns. In 2024, cash from operations was $3.97 billion, compared to $3.23 billion in 2023.
• Capital Allocation: Cummins strategically allocates capital to fund organic growth, acquisitions like the acquisition of Meritor, and return value to shareholders through dividends and share repurchases.
• Return on Invested Capital (ROIC): Cummins focuses on achieving a high ROIC by efficiently deploying capital and maximizing profitability.

For more insights into Cummins' values, explore: Mission Statement, Vision, & Core Values of Cummins Inc. (CMI).

Cummins Inc. (CMI) Market Position & Future Outlook

Cummins Inc. is strategically positioning itself for growth in the evolving market by focusing on innovation and sustainability. The company aims to leverage its expertise in advanced technologies to meet the increasing demand for efficient and environmentally friendly power solutions, maintaining a strong market position in the engine sector.

Competitive Landscape

Opportunities & Challenges

Industry Position

Cummins holds a strong position in the engine sector, recognized as the top manufacturer of diesel engines used in commercial trucks, off-highway machinery, and railroad locomotives. The company's strengths include:

• Global Presence: Operates in over 190 countries and territories, providing a strong international footprint.
• Diverse Product Portfolio: Offers a wide range of engines and power systems, including alternative fuel engines.
• Commitment to Innovation: Focuses on research and development, technological advancements, and strategic partnerships.
• Sustainability Initiatives: Dedicated to environmental responsibility, as reflected in its AAA rating from Morgan Stanley Capital International (MSCI) for the third consecutive year.

Despite robust competition and increasing government regulation of carbon emissions, Cummins has maintained its leadership position by investing in electrified powertrains, hydrogen production, battery technology, and fuel cells.