DOW JONES NEWSWIRES

Cummins Inc. (CMI), following through on a warning of further cost cuts, said it will eliminate at least 800 "professional" jobs by the end of February and is freezing salaries for the year.

The engine maker, which is suffering from slumping demand because of the woes affecting the global automobile industry, also said it will cut company officers' 2009 salaries by 10%.

Combined with job cuts announced last month, Cummins is reducing its professional workforce by more than 1,400 people, or 10%. The company has reduced its hourly workforce by more than 600 and cut approximately 2,500 contingent workers. As part of the latest cuts, Cummins will offer a second round of early retirement packages to certain U.S. professional employees.

"It is unfortunate that after five straight years of record performance and greatly improved business fundamentals we are being forced to take these difficult actions," said Chairman and Chief Executive Tim Solso. "While these steps are very painful, they are necessary to keep Cummins competitive through this global recession so we can emerge a stronger company when the economy and our markets recover."

Cummins warned a month ago it was planning more cost cuts, as Solso said, "We do not expect market conditions to improve significantly in the immediate future." The company earlier in December announced a work-force cut of at least 3%, on top of already-taken steps that included temporary plant shutdowns, cutting temporary employees and enacting a hiring freeze.

At that time, Cummins reduced its 2008 forecast amid slumping fourth-quarter demand, particularly the hard-hit North American and European truck and construction markets. For months, auto-parts suppliers have felt the impact of U.S. auto makers' efforts to pare down swollen inventories and turn around their North American operations.

Cummins shares closed Monday at $26.18 and there was no premarket trading. The stock has lost two-thirds of its value the past five months.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

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