``Cummins Advantage'' Positions Company for the Future; Chairman Tim Solso Expresses Optimism at Annual Shareholders' Meeting.

Business Editors

COLUMBUS, Ind.--(BUSINESS WIRE)--Sept. 16, 2003

Cummins Inc. Chairman and Chief Executive Officer Tim Solso told shareholders today that Cummins has started to rebound from a nearly three-year downturn and expressed optimism that the Company is well positioned for the future.

Speaking at the Company's Annual Shareholders' Meeting this morning, Solso provided an overview of the Company's current business situation and strategy, outlined what he called the "Cummins advantage" and offered his thoughts on the Company's future direction.

Shareholders of Cummins elected the proposed slate of Directors, ratified the appointment of PricewaterhouseCoopers LLP as the Company's auditor for 2003 and approved the Company's 2003 Stock Incentive Plan. Shareholders approved these items by significant margins.

"I have never been more optimistic and bullish about this company than I am today," Solso said. "Cummins has used the business downturn as an opportunity to significantly lower its cost structure, which positions the Company well for the market recovery."

Cummins reported net income of $82 million in 2002, compared to a net loss of $103 million in 2001. Sales rose in 2002 to $5.85 billion, from $5.68 billion in 2001. For the second quarter of 2003, the most recent financial reporting period, Cummins reported stronger-than-expected earnings of $14 million on sales of $1.54 billion.

Solso praised Cummins employees who have weathered the "longest, most severe downturn we've had since I joined the company (in 1971)." Solso said the economic downturn that affected Cummins and many other manufacturers began in the second quarter of 2000 and bottomed out in the first quarter of this year. During that period, Cummins reduced the number of employees by 17 percent and closed or consolidated 14 plants in an effort to reduce its cost structure.

In the last three years, Cummins has significantly lowered the break-even sales level of its products, created new businesses, continued to generate positive cash flow and improved its operating efficiencies, Solso said.

Cummins also has responded to tightened emissions standards for its engines, and was the first company to produce a full line of engines that complies with the emissions rules established by the U.S. Environmental Protection Agency in October 2002.

Solso outlined for shareholders the "Cummins advantage," which consists of five components crucial to the Company's continued success. They are:

-- Brand leadership. Cummins is No. 1 or No. 2 in most product

markets in which it competes. For example, our Fleetguard

brand of filters and related products is No. 1 in its industry

segment, as is our Onan line of generator sets for the

recreational vehicle market.

-- Strong partnership and customer relationships. Joint ventures

represent a growing portion of the Company's profits, and the

Company boasts strong partnerships such as its position with

DaimlerChrysler as the exclusive supplier of diesel engines

for the Dodge Ram pick-up truck.

-- Expanding our global reach. Cummins does business in more than

130 countries and territories and has well-established ties in

countries with large and growing economies, such as China and

India. In 2002, Cummins established its International

Distribution Business Unit, bringing 17 company-owned and two

joint venture retail distributors outside the United States 

together in a single operating group.

-- Technological leadership. Cummins designs or manufactures all

five critical engine subsystems, allowing the company to

control costs, provide integrated solutions to customers and

attract strategic partners.

-- Cost leadership. Cummins has been relentless in its efforts

the past three years to reduce costs. The Company's Six Sigma 

quality initiative has resulted in more than $400 million in

savings since the beginning of 2000; changes in purchasing

practices have lowered materials costs; overhead has been

reduced by $82 million; restructuring has saved the Company

$80 million and capital spending has been cut and is expected

to remain steady for the next several years.

The shareholder-approved 2003 Stock Incentive Plan authorizes a pool of 2.5 million shares to be used for future stock grants beginning in 2003 to maintain the strong linkage of management's interests with the interests of the Company's shareholders. This plan replaces the 1992 Stock Incentive Plan, which expired at the end of 2002.

Cummins elects its full Board of Directors annually, each of whom serve for one year until their respective successors are elected and qualified. Each of the Board members elected in 2003 were on the Board in 2002 and collectively have more than 110 years of service as Directors to Cummins. Newly elected are: Robert J. Darnell, John M. Deutch, Walter Y. Elisha, Alexis M. Herman, William I. Miller, William D. Ruckelshaus, Theodore M. Solso, Franklin A. Thomas and J. Lawrence Wilson.

NOTE: A Webcast of the audio portion of today's Annual Meeting, along with the Chairman's slide presentation, can be found on the home page of the Company's web site at www.cummins.com after 4 p.m. today.

Cummins Inc. (NYSE:CUM), a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves its customers through more than 500 company-owned and independent distributor locations in 131 countries and territories, and employs nearly 24,000 people worldwide. Press releases and other Company information can be found on the Cummins web site.