Cummins gets $54M to improve fuel efficiency

Columbus engine maker Cummins Inc. will receive nearly $54 million in federal funding as part of a program designed to
significantly increase fuel efficiency in heavy trucks and passenger vehicles.

The program is directing $187 million
in federal funding to nine U.S. projects designed to significantly increase fuel efficiency in heavy trucks and passenger
vehicles, with more than half coming from the $787 billion stimulus package and the remainder from DOE appropriations. Recipients
are expected to match government funding, creating a total investment of $375 million in the projects.

Energy Secretary Stephen Chu detailed the projects Monday during a ceremony in Cummins’ hometown.

Cummins will get about $38.8 million to develop a more efficient and cleaner
diesel engine for heavy trucks, a more aerodynamic long-haul truck cab and trailer, and a fuel cell that would
deliver auxiliary power to reduce engine idling while the vehicle was not on the road. The company will partner with Peterbilt
Motors Co. on the so-called "SuperTruck" project.

Another $15 million will help Cummins develop a fuel-efficient,
low-emissions diesel engine for light-duty passenger vehicles. The goal is to come up with an engine that is 40 percent more
efficient than conventional gasoline technology.

"We appreciate the funding … which will create jobs, help
address climate change and reduce oil consumption," Cummins President Tom Linebarger said in a prepared statement. "This
public-private partnership is a win for our economy, a win for the environment and a win for energy challenges."

More than 60 technical positions will be dedicated to the project work during the development phase, Cummins said, and more
jobs will be created when the new engines are produced.

The DOE said the nine recipients are expected to create
more than 500 research, engineering and management jobs, with 6,000 more positions anticipated when the
technologies go into production and assembly.

In detailing the project awards, the administration
said the new technologies, when in broad use, "could save more than 100 million gallons of oil per
day and reduce carbon emissions from on-road vehicles by 20 percent by 2030."

Three of the projects,
receiving $115 million, are aimed at improving long-haul truck fuel efficiency by 50 percent, with new designs to be ready
by 2015.

In addition to Cummins, Navistar Inc.’s Fort Wayne operation is in line for $37.3 million and Daimler
Trucks North America LLC, of Portland, Ore., will receive nearly $40 million.

The remaining six projects for passenger
vehicles will spread more than $71 million among Chrysler, Ford, General Motors, Delphi Automotive Systems, Robert Bosch and
a second Cummins project.

The money will go to companies based in economically hard-hit Michigan and Indiana, with
the exception of Daimler Trucks.

Cummins reported profit of $95 million in its third quarter ended Sept. 27, down
59 percent from the same period a year earlier. The company expected sales to be down less than 30 percent for the entire
year. Shares were trading at $54.54 in late morning, up 87 cents from Friday’s close.