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Cummins is an Indiana, US-based Fortune 500 company which specializes in the manufacturer of power generation equipment.
Its origins go back to 1919 when it was an early innovator in diesel engine technology. It was especially active in the 1950s as Cummins engines powered much of the equipment that built the roads during the massive interstate highway construction program in the US.
By combining lab-based research and field-based trials, including dramatic performances at the Indy 500 races, Cummins achieved technological breakthroughs - including the revolutionary pressure-time fuel injection system of 1954. By the late 1950s Cummins had sales of over $100m and a significant lead in the market for heavy truck diesels.
Cummins opened its first overseas manufacturing facility in Scotland in 1956. Global expansion proceeded apace until today the company (no longer just an engine manufacturer) has sales of over $16bn and over 5,000 sales and service facilities in 197 countries and territories and employs around 44,000 staff internationally. In recent times Cummins has grown to be one of the largest engine makers in both China and India – and has established operations throughout Africa.
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Carol Pennington is director, Treasury Projects at Cummins. She told Asset Finance International that, prior to its partnership with Ecologic Leasing Services (Ecologic); Cummins’ global locations obtained essential funding for equipment purchase on an independent basis.
Carol Pennington, Director, Treasury Projects at Cummins
“We just did not have the necessary expertise in-house to ensure the best deal in all cases. All our global businesses sought finance locally and were assessed on their own merits and value. So we immediately gained economies of scale when we made use of Ecologic’s Global Lessor Network.”
She added: “Much time was spent seeking tenders and finance quotations – all of which then had to be evaluated. But none of the tenders were as competitive as those subsequently made available by Ecologic.”
Ecologic’s basic premise works at finding the best lessor for each asset type in each country. Rather than relying on the promotional reporting and website provided by each lessor, it believes its clients want one process, portfolio, and software system that they can use to manage their multi-lessor, multi-national. multi-currency, multi-asset type leasing process and portfolio around the world.
“The result,” she stressed, “is that the company overall began saving money due to the competitive nature of the RFP (request for proposal). By aggregating finance proposals we obtained a far keener rate.”
Pennington explained that Ecologic made a policy of learning all about Cummins’ corporate culture and methods of operating. This could not take place overnight, and initially Cummins was prepared to allow time for Ecologic staff to become familiar with the company’s modus operandi.
She said: “Relationships are now so close, and we have such trust in them, that we allow Ecologic to interact freely with our global businesses. The relationship is very open and both sides succeed in listening to the views of the other – we do not allow egos or attitudes to get in the way.”
Ecologic’s system also serves to streamlines a lessee’s compliance management, it provides an integrated combination of processes, procedures, accounting expertise and technology all of which seek to ensure its compliance to master lease agreements, insurance, national, regional and local taxes, FASB/CICA/IFRS, Sarbanes-Oxley, SEC and other standards.
Pennington added: “As Cummins has expanded globally, including into China and India, so Ecologic has grown simultaneously. It now has corporate representation in many of the countries in which we operate.”
“It has responded admirably to the challenge of global growth. As well as expanding its global lessor network it has developed local software capable of dealing in Mandarin in China. These have been significant achievements for Ecologic.”
Summing up the value of Ecologic, Pennington said: “The relationship between Cummins and Ecologic is centered here at Corporate Treasury in Columbus, Indiana. It is crucial that I as director have a relationship with a vendor who keeps me informed of what is happening in the market, who recommends new, innovative and cost-effective products that will benefit Cummins – and who is quick on their feet. I have such a relationship with Ecologic.”
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