Columbus Indiana Takes Another "Big Hit!"

Columbus Indiana Takes another "Big Hit"

Yet again, Columbus Indiana takes another "Big Hit" to its residents and its economy, which will invariably be impacted. The flood in June of 2008 devastated businesses and some home owners. But the world's economy, the National economy, and overall recession, have trickled down to one of Columbus's major employers, and employees.

Cummins announced about a month ago, they were laying off approximately 600 jobs, Yesterday in the Republic headlines they announced a further 800 Job losses, see the copy of the memo sent to Cummins employees.

Global Recession Forces Further Workforce Reductions

To All Employees:

During the fourth quarter, we made several announcements regarding the state of the Company and actions we have taken to deal with the global recession and its impact on our businesses.

We shut down plants temporarily and instituted a hiring freeze, continued to prioritize our capital expenditures and make other discretionary spending cuts, and made significant reductions in our contingent workforce. We offered a voluntary retirement package to employees who met certain criteria, and, finally, we took the difficult step of reducing our permanent professional workforce by approximately 600 people.



Unfortunately, the economic situation has continued to rapidly worsen around the world, and our markets have been further impacted. It has now become painfully clear that even more actions are needed to align our cost structure with our projected business levels, meet customer requirements and preserve our ability to invest for the future.

That is why I am announcing today that we will be further reducing our professional workforce around the world through a combination of voluntary retirements and involuntary terminations. We expect to reduce our professional workforce by at least an additional 800 people by March 1.

The voluntary retirement offer will be open to employees in certain regions who meet specific criteria. Eligible employees will have until Friday, Jan. 23 to sign up and until March 1 to leave the Company. Employees who are eligible will be notified by Human Resources.

As with the previous actions, termination decisions will be based on performance, skill levels and the nature of the work being done, and all parts of the Company will be affected. The involuntary actions will take place in February.

In addition, there will be no merit increases for any of our professional people this year, and officer salaries will be decreased by 10 percent for 2009.

Finally, we will continue to monitor production volumes at individual plants and take whatever actions are necessary as dictated by demand for our products. We also will further reduce contingent workers across the company based on the nature of the work and demand.

It is difficult to comprehend that after five straight years of record performance and greatly improved business fundamentals we are being forced to take such difficult actions twice in such a short period of time. These decisions are not made easily and I am acutely aware of the impact these actions have on both the employees who will be leaving and those who remain to do the hard work necessary to help us pull through this challenging period.

It is of little consolation that the economic conditions we face today are not of our own making. At the same time, we have a responsibility to all our stakeholders to meet our financial commitments and to keep Cummins competitive through this downturn so we can emerge a stronger company when the global economy and our markets recover.

Following these reductions, Cummins will be a good position to weather this downturn with low debt, healthy cash balances and a $1.1 billion revolving credit line for additional liquidity if we need it. Based on our understanding of the current economic conditions, we have no plans for further actions at this time.

I want to close by saying it is more important than ever that we continue to work together to leverage our collective skills and capabilities across the company. All of us are hoping for improved economic news in 2009, but we are prepared to manage even in the toughest of circumstances. In the meantime, I will continue to provide you with regular updates, and, as always, I appreciate the good work being done to keep Cummins strong during these difficult times.

Tom Linebarger

Well, this speaks volumes to the public and business here in Columbus, IN.. It will have a major effect in almost all aspects of life. I know it will impact the Real Estate market. There are signs that are already visible to the trained eye. Some agents have decided to put their license in referral status, some have taken other employment and some have just given up.

As for myself I see this as another opportunity, although it sure seems like a sad state of affairs! For Columbus.

See my previous blogs:

"Sad State of Affairs" or is it "Opportunity Knocking?" http://activerain.com/blogsview/873150/Its-a-Sad-State-of-Affairs-or-is-it-Opportunity-Knocking

"Columbus Indiana & Bartholomew County Market Conditions" http://www.trulia.com/blog/martin_dorgan/2009/01/bartholomew_county_colum

Martin Dorgan
Coldwell Banker
South Central Realty
1015 Third Street
Columbus Indiana, 47201
Office: 812-378-3331 ext.122
Cell: 812-603-1368
Website: http://www.columbusareahomesforsale.com
Active Rain Blog: http://activerain.com/blogs/martindorgan

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