Client: Cummins Engine Company
Project/product: The Engine That Could

The project
Cummins, the world's leading producer of diesel engines above 200 horsepower, hired us to research and write their 75th anniversary history. With business historian David B. Sicilia, we conducted more than 100 interviews, researched thousands of primary documents, and wrote a book that was published by the Harvard Business School Press.

This project led to several others, including a video based on the history and a history-oriented annual report insert.

Excerpt:
Clessie goes to Washington
The War Production Board called a meeting of the Industrial Liquid-Cooled Engine Advisory Committee in the second week of January 1943. At that meeting, the assembled gasoline and diesel engine manufacturers were told once again of the dire need to increase engine production. They were invited to select one of their own to serve as the WPB's diesel-engine consultant, whose job it would be to help the Board break existing production logjams. The group chose [Cummins Engine Company president] Clessie L. Cummins.

"WILL HEAD U.S. DIESEL OUTPUT," read the headline in the January 25, 1943 edition of the Columbus Evening Republican. The accompanying article suggested that Clessie had been chosen first because of his long experience in the diesel field, and second because the Engine Company recently had been awarded the Navy's prestigious "E" award, recognizing excellence in production. "As director of production," the article went on to say, "Mr. Cummins will have almost unlimited power."

Clessie later recalled in his autobiography that he "went to Washington to watch over an industry and to be watched, in turn, by my doctor." The latter certainly was true. By now, Clessie had experienced three serious bouts of his inner-ear ailment, which at its worst rendered him incapable of even standing up unassisted. (When Clessie suffered his second attack in San Francisco, passersby mistook him for a drunk.) But a Washington, D.C.-based doctor who had the same affliction -- and also had Cummins H engines in his yacht -- agreed to take the ailing inventor in his care.

For public consumption, Clessie cited the "splendid cooperation" received from the participating companies, who helped him tremendously in his task of "scheduling production of all diesel and gasoline engines, with the exception of aircraft engines." Privately, he had less kind things to say about the government. Speaking off-the-cuff to the advisory group in October 1943, nine months after his relocation to Washington, Clessie expressed frustration that had been building for many months. "For the first three months on the job as consultant I snooped around, learning all I could. I had no desk assigned to me for months. When someone in the Internal Combustion Branch was absent or attending conferences, I slid into their chairs . . . .

"The facts are indisputable," Clessie stated bluntly. "Either you must cut schedules back to meet material, or get us the material to meet schedule." But the WPB, which officially was supposed to "control production and the flow of material," was failing to do so. During a September meeting with his increasingly disgruntled colleagues, Clessie recommended that they collectively send a telegram to "Engine Charlie" Wilson, the General Motors executive who served as executive vice chairman of the WPB, "asking him to give us a hearing."

The steps Clessie had taken to circumvent the bureaucracy and help his industry were in many ways typical of his approach to business: unconventional, impulsive, and tolerant of risk. The fact that Wilson attended the October 1943 meeting and sat through Clessie's sweeping denouncement of his Board bespeaks the importance that the government assigned to engine production. And Clessie was not alone. Waukesha's president J.N. Delong complained about excessive paperwork. Hercules president Charles Balough bristled at the implication that his company might have exaggerated its capacity: "We have not oversold our own capacity, but can very definitely state that our difficulty in keeping to our schedule has been the result of the unfavorable material situation."

In the week following this hearing, government bureaucrats worked overtime trying to confirm or deny the comments made by Clessie and his peers. The bureaucrats admitted the problems of materials shortages and bad planning on the part of the government. But they also faulted the engine companies for doing precisely what Balough had denied they were doing. "The present practice of industry is to accept orders for deliveries considerably beyond any reasonable anticipation of capacity," said one summary report. "Evidence indicates that overloaded manufacturers are continually accepting additional business, and that, when such business is accepted for indefinite or unsatisfactory delivery dates, pressure quickly develops to expedite such orders at the expense of others."

The government fact finders also put together an interesting snapshot of how the seven major players in the industry had conducted their respective businesses in the month of August 1943. At issue was the relative emphasis on new engines versus spare parts -- a subject of keen interest to the government, since increased production of one led to decreased production of the other. The analysis showed what percentage of each company's dollar volume came from parts, and how much from engines:

Engines Parts Parts-to-sales Hercules $4,920,000 $934,000 19% Caterpillar 3,158,635 821,255 26 Buda 2,719,000 600,000 22 Continental 2,390,000 311,000 13 Cummins 1,548,000 626,800 41 Waukesha 1,419,870 457,210 32 LeRoi 563,254 176,655 31

Another analysis, produced six months earlier on the basis of on-site visits to five of these same six manufacturers, provides another interesting perspective. It lists the number of basic models each company produced and the approximate number of specifications that each company built into its basic models:

Basic models Built-in specifications Waukesha 25 200 Buda 19 300 Hercules 17 300 Continental 14 200 Cummins 6 600

The Cummins manufacturing strategy starts to become clear in these charts. More than 40 percent of the company's sales in the summer of 1943 came in the highly profitable parts end of the business -- twice as much as some of the company's competitors. This was made possible, in part, by the company's insistence on producing only a small number of basic and perennial models. (Cummins produced only a quarter as many models, for example, as comparably sized Waukesha.) "Sell spare parts out of current production," Clessie Cummins liked to say. Tooling costs were kept down, while manufacturing profits were kept in-house. And the high number of built-in specifications -- twice as many as the nearest competitor -- reinforced the close ties between Cummins and its customers. Beyond the short block and heads, Cummins could customize almost any aspect of an engine's operation for a specific customer's needs. . . .

top of page
back to commisioned books