CUMMINS TO PRODUCE ENGINES IN RUSSIA

CUMMINS TO PRODUCE ENGINES IN RUSSIA

Cummins Engine Co. said last week it has reached an agreement with Kamaz Inc., Russia's biggest truck manufacturer, to produce 50,000 engines annually at a plant site to be determined in Russia.

The engines will help replace part of the capacity lost in an extensive fire April 14 at Kamaz's giant production facility about 700 miles northeast of Moscow. Kamaz's plant formerly could make about 230,000 engines and transmissions a year and was said to be the largest truck factory in the world.Kamaz representatives visited Cummins facilities in the United States at least three times and Cummins, which is based in Columbus, Ind., sent 10 teams to Russia before making a decision. Kamaz evaluated a dozen companies from the United States, Europe and Japan.

The agreement "reaffirms and accelerates" a partnership between Cummins and Kamaz that was first put together in November 1991, said John K. Edwards, Cummins' vice president for international operations. The idea at the time was for Kamaz eventually to make about 20,000 Cummins engines. But the scope was expanded after the fire.

Mr. Edwards said the structure of financing has yet to be worked out, but both Kamaz and Cummins would be seeking assistance from their respective governments and from international lending bodies. The government of Russia has pledged 75 million rubles toward rebuilding the Kamaz facility, but it is not clear whether any of that money will be available for the project.

Mr. Edwards said it would be two or three years at best before a new manufacturing facility could be producing engines. He said there is a good market in Russia for high-quality engines that meet international emissions standards.