Cummins sheds about 40 temporary workers (From The Northern Echo)

Cummins sheds about 40 temporary workers

8:00am Friday 13th January 2012 in North-East Business News By Andy Richardson

FEARS of falling demand has prompted a North-East engineering firm to cut about 40 jobs at its factory in the region.

An upbeat forecast at the end of last year saw Cummins, the Darlington-based engine maker, hand 91 temporary workers a pre-Christmas boost by extending their contracts into the new year. However, revised forecasts for the second quarter of this year means the firm can no longer afford to keep almost half of those staff who were told yesterday that their contracts will end on February 3.

The announcement comes as a setback for Cummins which enjoyed a bumper 2011 when global sales records were smashed and the one millionth mid range engine rolled off the Yarm Road production line. Growth in overseas markets helped the company, which has been a major employer in the town since the mid 1960s, to take on more staff, with 120 workers joining on temporary contracts to help build 7,000 truck and industrial vehicle engines for customers in Brazil and China.

The early indications are that 2012 is proving tougher.

Uncertainty across the eurozone has been blamed for many of Cummins customers deciding to rein in their spending plans.

The Darlington plant was braced for a lull in demand from January to March when 165 engines would be made every day. Cummins bosses predicted that this number would rise in the second quarter to 185 engines per day, but a slump in demand has forced a rethink.

"We review our revenue and demand forecasts on an ongoing basis and it made sense for us to let some temporary staff go", said a spokesman. "Of course it is never nice to see staff leave, and if demand lifts then we will react accordingly," he added. About 70 per cent of the engines made at Cummins UK plants are exported around the world and the firm is hopeful of making inroads in emerging markets across Africa and South America to help offset sluggish demand in Europe.

Development of the London Routemaster bus could also give the firm a lift later this year.

Cummins reputation as a pioneer of environmentally friendly engines and exhausts saw it selected by Irish firm Wrightbus to help produce the latest generation of the iconic red busses that throng the streets of the capital.

Last month, London Mayor, Boris Johnson hailed Cummins workers as he unveiled eight prototype vehicles which will put through their paces on the route between Victoria rail station and Hackney in east London. If the trial is successful, Mr Johnson hopes to press ahead with plans to eventually replace all London Routemasters with the new eco-friendly models.