Meritor Acquisition and 2022 Financial Results
Table of Contents
Chongqing Cummins Engine Company, Ltd. - Chongqing Cummins Engine Company, Ltd. is a joint venture in China with Chongqing Machinery and Electric Co.
Ltd. This joint venture manufactures several models of our heavy-duty and high-horsepower diesel engines primarily serving the industrial and stationary power markets
in China.
Tata Cummins, Ltd. - Tata Cummins, Ltd. is a joint venture in India with Tata Motors Ltd., the largest automotive company in India and a member of the Tata group of
companies. This joint venture manufactures Cummins' 3.80 to 8.9-liter diesel and natural gas engines in India with a power range from 75 to 400 horsepower for use in
trucks manufactured by Tata Motors, as well as for various industrial and power generation applications for Cummins.
Distribution Entity
Komatsu Cummins Chile, Ltda. - Komatsu Cummins Chile, Ltda. is a joint venture with Komatsu America Corporation. The joint venture is a distributor that offers the full
range of our products and services to customers and end-users in Chile and Peru. See further discussion of our distribution network under the Distribution segment section
above.
Non-Wholly-Owned Subsidiaries
We have a majority voting interest in ECJV by virtue of a tie-breaking vote on the joint venture's board of directors. ECJV develops and supplies automated transmissions for
the heavy-duty commercial vehicle markets in North America and China.
We have a controlling interest in Cummins India Ltd. (CIL), which is a publicly listed company on various stock exchanges in India. CIL produces medium-duty, heavy-duty
and high-horsepower diesel engines, generators for the Indian and export markets and natural gas spark-ignited engines for power generation, automotive and industrial
applications. CIL also has distribution and power generation operations.
We have a controlling interest in Hydrogenics Corporation (Hydrogenics), which is consolidated in the New Power segment. Hydrogenics is a developer and manufacturer of
proton exchange membrane fuel cell products as well as alkaline and proton exchange membrane electrolyzer solutions.
SUPPLY
The performance of the end-to-end supply chain, extending through to our suppliers, is foundational to our ability to meet customers' expectations and support long-term
growth. We are committed to having a robust strategy for how we select and manage our suppliers to enable a market focused supply chain. This requires us to continuously
evaluate and upgrade our supply base, as necessary, as we strive to ensure we are meeting the needs of our customers.
We use a combination of proactive and reactive methodologies to enhance our understanding of supply base risks, which guide the development of risk monitoring and sourcing
strategies. Our category strategy process supports the review of our long-term needs and guides decisions on what we make internally and what we purchase externally. For the
items we decide to purchase externally, the strategies also identify the suppliers we should enter into long-term supply agreements to provide the best technology, the lowest total
cost and highest supply chain performance. We design and/or manufacture our strategic components used in or with our engines and power generation units and New Power
products. Key suppliers are managed through long-term supply agreements that seek to secure capacity, delivery, quality and cost requirements are met over an extended period.
Other important elements of our sourcing strategy include the following:
expanding risk management scope to include sub-tier value chain suppliers for critical components;
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broadening dual and multi-sourcing where applicable;
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selecting and managing suppliers to comply with our Supplier Code of Conduct; and
assuring our suppliers comply with our prohibited and restricted materials policy.
As we adjust to the current global supply chain challenges, global inflationary pressures and other global macroeconomic forces, we are experiencing supply chain disruptions,
incremental costs and related challenges throughout the supply chain. We continue to monitor the supply chain disruptions utilizing early detection technology complemented
by structured supplier risk and resiliency assessments. We increased frequency of formal and informal supplier engagement to address potentially impactful supply base
constraints and enhanced collaboration to develop specific countermeasures to mitigate risks. Our global team, located in different regions of the world, uses various approaches
to identify and resolve threats to supply continuity.
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