SUPPLY SIDE

Feb. 1, 2001
Cummins Axes 1,500 Workers, Opens China Operation Proceedings Columbus, Ind.-based Cummins laid off another 1,500 workers worldwide, including 800 in

Cummins Axes 1,500 Workers, Opens China Operation Proceedings

Columbus, Ind.-based Cummins laid off another 1,500 workers worldwide, including 800 in Indiana, to save cash and maintain its stock price in response to a slowing economy and the subsequent squeeze on company profits.

The company has terminated more than 2,000 jobs since December 1999.

Company chairman Tim Solso said the job cuts and other restructuring would save Cummins $30 million this year and more than $55 million in succeeding years.

For the three-month period ended in October, the company earned $25 million, or 66 cents a share, compared with profits of $53 million, or $1.63 a share, for the same period a year earlier. It said it expected to post a loss of 35 to 45 cents a share for the fourth quarter of 2000, in part because of a $160 million pretax charge related to restructuring.

In other news, Cummins opened its sixth sales and service center in China. The Cummins Wuhan office will sell the entire Cummins line, including imported and locally manufactured products.

The company is the largest international investor in the engine industry in China, having pumped more than $130 million into manufacturing facilities and joint ventures.

Clark Sells Blue Giant, Receives Financing for European Subsidiary

Clark Material Handling, based in Lexington, Ky., sold its Blue Giant unit to TMB Holdings of Westport, Conn., for $11 million.

The deal includes the assets of Clark subsidiary Blue Giant Ltd., a Brampton, Ontario, manufacturer of dock equipment and lift tables; certain assets of Blue Giant Corp., another Clark subsidiary in Pell City, Ala.; and Blue Giant's worldwide distribution for wheeled products.

Clark, which filed for reorganization under Chapter 11 of the Bankruptcy Code in April, also announced that its European subsidiary, Clark Material Handling Europe, was approved for approximately $15 million in additional working capital financing.

Company officials said the funding will be used to complete a manufacturing transition plan that includes production of internal-combustion trucks from 2 to 7 tons in Mulheim, Germany.

Deere Enters Dozer and Loader Pact

John Deere Construction Equipment, based in Moline, Ill., and Liebherr-Werk Telfs of Austria signed an agreement in January to sell two large models of crawler dozers and two models of crawler loaders.

Added to the Deere line are the 330-horsepower 1050C and 234-horsepower 950C dozers and the 180-horsepower 755C and 132-horsepower 655C loaders. Those will be the largest dozers and crawlers in the Deere line, the company said.

The agreement allows Deere to sell the Deere-branded models in the United States and Canada through select construction equipment dealers beginning this spring.

In other news, Deere & Co. acquired Great Dane Power Equipment, a commercial mowing equipment company based in Jeffersonville, Ind. It will become part of Deere's Worldwide Commercial & Consumer Equipment Division. Terms of the deal were not disclosed.

Terex Completes Fermec Buy

Westport, Conn.-based Terex finalized its purchase of the Fermec Holdings construction equipment business from CNH Global. Financial terms of the deal, first announced in mid-1999, were not disclosed.

The sale was required by the European Commission as part of the merger of Case and New Holland that created CNH.

Terex acquired Fermec's plant in Manchester, England, and the Fermec loader/backhoe and industrial tractor product lines. CNH, based in Racine, Wis., retained its manufacturing and marketing rights for mini-excavators. The company also agreed to a nonexclusive supply agreement with Terex for four-wheel-steer loader/backhoes to be sold under the Case line.

A Terex spokesman said the acquisition allows the company to develop a rental line of equipment for customers such as Hertz and United.

In other CNH news, the European Commission approved the sale of the company's tractor plant in Doncaster, England, to Landini of Italy. The deal also includes design and manufacturing rights to CNH's C, CX and MXc tractor lines, and the McCormick brand name.

Tractors will still be produced at the Doncaster plant and sold by CNH under the Case IH brand name outside the European Economic Area and Switzerland.

Gehl Directors Reject Buyout Bid

Gehl rejected a buyout offer from a group of shareholders headed by Texas billionaire Harold Simmons. The offer, submitted in a filing with the Securities and Exchange Commission, was the second effort by Newcastle Partners and CIC Equity Partners — parts of a larger investment group — to acquire the West Bend, Wis.-based construction equipment manufacturer.

Gehl said its board of directors reaffirmed its belief that the company's business strategy, pursued as an independent public company, presents the best opportunity to maximize long-term shareholder value.

Dimas Purchases Cushion Cut

Dimas, part of the Electrolux Group of Sweden, acquired Torrance, Calif.-based Cushion Cut from South Africa-based Boart Longyear. The sale does not include Boart Longyear's — highway grooving and grinding business.

Cushion Cut had estimated sales of $25 million in 2000. Dimas said that with the acquisition its professional outdoor industrial product line will generate annual sales of about $143.7 million.

SHORT SUPPLY

HomeBase said it will leave the home-improvement business, closing 22 stores this year and converting 62 others into House2Home home furnishings stores.

The Irvine, Calif.-based company cited an inability to compete with larger rivals.

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Tulsa, Okla.-based Hilti is offering a repair program whereby select company tools are covered under warranty for two years. The program includes transportation of the tool to and from Hilti's repair center, maintenance service, repair and replacement of all worn-out or defective parts, functional testing, and adjustments and safety checks after any repair.

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Atle of Sweden acquired HEK International Group, a Dutch manufacturer of mast climbing work platforms, hoists and transport platforms, from the German company ThyssenKrupp. Atle, which also owns hoist and platform maker Alimak of Sweden, said it will make HEK and Alimak equal partners under one holding company, creating the world's largest source of rack-and-pinion access solutions.

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Baltimore-based DeWalt Industrial Tools and Accessories purchased Emglo, an air compressor manufacturer in Johnstown, Pa., from Stonewood Capital Management of Pittsburgh. Terms of the deal were not disclosed.

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The European Commission fined JCB about $33.3 million for violating antitrust regulations with illegal distribution agreements.

The agency said the British equipment manufacturer imposed restrictions on its distributors in Britain, France, Italy and Ireland to limit out-of-territory sales, preventing customers from taking advantage of price differences between various European Union nations.

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AmeriQuip relocated its headquarters to a 3.5-acre office and manufacturing space in La Verne, Calif. The headquarters had been in nearby Ontario, Calif.

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Peoria, Ill.-based Caterpillar agreed to acquire the Timberking track feller buncher intellectual property from Risley Manufacturing in Grande Prairie, Alberta. Terms of the deal were not disclosed.

A Caterpillar executive said the deal will enable the company to develop a full line of forestry equipment and tools.