COLUMBUS, Ind. (AP) -- Cummins Inc., which makes engines and related components, said Friday that it will cut at least 500 white-collar jobs worldwide by the end of this year, citing the deterioration of the U.S. economy and key markets around the world.
The cuts, which represent about 3.5 percent of Columbus-based Cummins' white-collar work force, will come from all parts of the company and be achieved in part through offers of retirement packages to certain U.S. employees and layoffs.
Workers eligible for the voluntary retirement packages will have until Thursday to accept the offers, which include salary and the continuation of benefits for nine months following their retirements, Cummins said.
The rest of the job cuts will be involuntary. Most of the affected workers will be notified by Dec. 18 and leave the company by the end of the year.
Cummins CEO Tim Solso said the company was forced to make the job cuts because of reduced demand for its diesel engines and other products.
"These are difficult times, but in many ways we are better positioned to weather a downturn than at any time in our history," he said.
Mark Gerstle, the company's chief administrative officer, said it was uncertain how many employees in Columbus would lose their jobs.
"We're trying to get as many who are thinking of retiring so we can minimize the others who will be cut," he said.
Cummins, however, does not plan changes for its new downtown Columbus office building that will include 500 office workers or for the new light-duty diesel project gearing up for production at a plant in the city about 40 miles south of Indianapolis, Gerstle said.
The company has already implemented temporary plant shutdowns, shortened work weeks and extended traditional holiday closing periods to cut spending.
"We have healthy cash balances and our business operations continue to generate cash," Solso said. "We are committed to doing what is necessary to emerge from this downturn a stronger company and resume our recent history of strong growth once our markets begin to improve."
The costs associated with the job cuts will be recognized in Cummins' fourth-quarter earnings, the company said.
