Cummins to Supply Engines for Paccar

As expected, Cummins Engine Co. (CUM announced Monday a nine-year agreement with truck maker Paccar Inc. (PCAR)to supply engines for its heavy trucks.

Cummins, headquartered in Columbus, Ind., said it also agreed in a separate transaction to become the supplier to Paccar’s European subsidiary, DAF Trucks, for medium-duty engines.

“This supply agreement reflects the industry trend towards closer cooperation between OEMs and engine suppliers to provide enhancements to improve vehicle performance,” said Joe Loughrey, Cummins’ executive vice president, and Gary Moore, Paccar senior vice president.

“The impact of 2002 emission regulations and the benefits to customers of providing a more integrated powertrain are key elements in the strategic alliance.”

Bloomberg News noted that Cummins has recently been reducing employment and costs in its engine business, which had an operating loss of $107 million last year.

Bellevue, Wash.-based Paccar makes heavy trucks under the Kenworth and Peterbilt nameplates.Transport Topics

(Click here for the full press release.)

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