Today Daimler Truck AG and global power leader and independent engine manufacturer Cummins Inc. (NYSE: CMI) announced that the companies have signed a memorandum of understanding establishing a global strategic partnership for medium duty engine systems. The companies added that other opportunities for collaboration are also being evaluated.
As part of the planned strategic partnership, Cummins will invest in the further development of medium duty engine systems for Daimler Trucks and Buses and the global production and delivery of medium duty engines by Cummins for Daimler Trucks and Buses beginning in the second half of the decade.
Martin Daum, Chairman of the Board of Management at Daimler Truck AG and a member of the Board of Management at Daimler AG said, “The memorandum of understanding between Daimler Truck AG and Cummins makes engine production at the Mannheim location fit for the future and at the same time strengthens our competitiveness. With the changeover to Euro VII, we would have to invest considerable resources in the further development of our medium duty engines. We are now freeing up these funds to focus them on the technologies that are crucial to our long-term corporate success in the transformation of our industry.”
“We are pleased to announce this important strategic partnership with Daimler to provide the medium duty engine systems for Daimler Trucks and Buses in global markets,” said Tom Linebarger, Chairman and CEO, Cummins Inc. “Our partnership is a terrific opportunity for both companies to be more competitive, drive global innovation, expand offerings to customers and reduce emissions. We are looking forward to working with Daimler on this and exploring other potential opportunities to grow our respective companies. As the leading independent global power solutions provider, Cummins is committed to ensuring any customer anywhere has the right solution by offering them a broad range of power solutions from advanced diesel, near-zero natural gas, fully electric, hydrogen and other technologies.”
Production of medium duty Cummins engines at the Daimler Mannheim plant
Cummins Inc. will establish an engine plant within the Mercedes-Benz Mannheim campus, efficiently utilizing existing resources to produce medium duty engines compliant with the Euro VII emissions standard for Mercedes-Benz and ensuring continued joint success in the medium duty vehicle segment. With this strategic partnership, Daimler Truck AG and Cummins will help maintain employment at the Mannheim plant. Cummins will use its existing footprint and strong production and supply chain networks in all other regions for use in other Daimler Trucks’ brands, including those of Daimler Trucks North America.
“By signing this memorandum of understanding, we are presenting a clear future perspective for the Mannheim site which produces medium duty engines today and will continue to do so moving forward. This is good for Mannheim,” says Martin Daum. “This will of course bring some changes to the site. Together with the works council, we will shape the changes in the coming years and develop joint solutions, always keeping the interests of our customers, employees and the company in mind.”
Daimler Truck’s focus on alternative drive technologies and heavy-duty commercial vehicle engines
Daimler anticipates the partnership with Cummins will enable Daimler to increase and accelerate its development efforts on alternative and emerging technologies, including non-diesel engines. In the future, Daimler Truck AG will focus on the further progression of zero-emission drive technologies as well as further development of commercial heavy-duty drivetrains. The production of the current medium duty engine generation (MDEG) by Daimler Truck AG will end with the start of production of the Cummins engines at Mannheim. In a next step, the partners will evaluate a broader global strategic cooperation through identifying potential synergies in areas such as powertrain components and engine system components.
The Daimler heavy-duty engine platform (HDEP) for the heavy-duty vehicle segment of Daimler Trucks and Buses will remain in the Daimler Truck AG portfolio. The HDEP engine family will continue to be manufactured by the global production network in Mannheim and Detroit, Michigan and fitted in heavy-duty trucks, in touring coaches as well as in third-party products worldwide.