Cummins Engine and Wartsila Diesel agree to form joint venture to produce diesel and natural gas engines up to 6,000 HP; Agreement with Finnish engine manufacturer will further diversify Cummins' product line and open new markets worldwide.

COLUMBUS, Ind., U.S.A.--(BUSINESS WIRE)--Dec. 14, 1994--Cummins Engine Co. Inc. (NYSE:CUM) of the United States and Wartsila Diesel International Ltd Oy of Finland have agreed to form a 50/50 joint venture to design, develop and manufacture two new families of heavy-duty, high-speed diesel and natural gas engines ranging up to 3,600 hp (2.7 megawatts) and 6,000 hp (4.5 megawatts), respectively. Cummins is the world's largest producer of high-speed diesel engines above 200 hp, with 1993 sales of more than $4 billion. Wartsila is the world's leading producer of medium-speed diesel engines ranging from 1 to 16.5 megawatts and an important producer of high-speed engines, with 1993 sales of $1.5 billion. Wartsila Diesel is the largest subsidiary of the Metra Corporation of Finland.

``This new relationship furthers Cummins' strategic plan to achieve profitable growth in markets related to its core competencies,'' said Cummins President and Chief Executive Officer James A. Henderson. ``It will further expand the horsepower range of what already is one of the broadest product lines in the diesel industry and will provide further growth in Cummins' increasingly global sales base.''

Pentti-Juhani Hintikka, President and Chief Executive Officer of Wartsila Diesel Group, noted that ``The joint venture with a leading high-speed engine producer is a logical way to ensure Wartsila Diesel's high-speed business growth in its strong marine and heavy-duty power generation markets through higher volumes and cost effectiveness.''

The first of the new families of engines to be released will be based upon the recently launched Wartsila 200 engine, which ranges up to 6,000 hp. The joint venture will begin production in 1995 at the present Wartsila SACM Diesel factory in Mulhouse, France. The second engine family will be a new 4.5 liter per cylinder engine that will be tested in 1995, with initial production scheduled in 1996 at a location yet to be determined. It will provide up to 3,600 hp for durable high-load use while employing full-authority electronic controls with the latest in fuel system technology.

Engines produced by the joint venture will be sold by the two partners to worldwide markets for mining, power generation, rail, and marine propulsion and auxiliary applications. They will be marketed under the names of Cummins and Wartsila, respectively. The partners expect to finalize the agreements during the first half of 1995.

The joint venture brings together two partners with strengths in different market segments and technologies. Cummins, with its technical and high-volume manufacturing facilities located worldwide and strong global distribution network, is a leading producer of high-speed diesel engines for automotive, bus and light commercial, power generation, industrial, government and marine markets in the 76 to 2000 hp range. With its leading role in technology utilizing a broad range of diesel fuel qualities including heavy fuels and in gas engine development, Wartsila Diesel is the producer of very reliable and durable medium- and high-speed engines for customized turn-key deliveries in the power generation and the marine fields.

Cummins will market the engines produced by the joint venture in the range of 2,500 hp to 6,000 hp as a part of its QUANTUM power system. The QUANTUM system meets the needs of customers using large engines, emphasizing fuel efficiency, reliability, durability, alternate fuel capability and electronics. The QUANTUM system also features electronic products offering extensive engine controls, monitoring systems, PC-based service tools and user-friendly business reports - all aimed at providing lowest operating cost solutions to the target markets.

The QUANTUM system will extend to engines below 2,500 hp with the next generation of Cummins' highly successful K engine family. Cummins will unveil the next generation of the K engine in April at the Bauma Show, the world's largest construction exhibition, held every three years in Munich, Germany.

Cummins, headquartered in Columbus, Ind., U.S.A., is a leading worldwide designer and manufacturer of diesel engines and related products. These engines provide power for trucking, power generation, bus, industrial, government and marine markets worldwide. In 1993, 44 percent of Cummins' sales were to markets outside The United States. Cummins employs 23,000 persons in its manufacturing, assembly and research facilities in more than a dozen countries and has distributors in 110 countries. Cummins is celebrating its 75th anniversary this year.

The Wartsila Diesel Group is the world's leading producer of medium-speed diesel engines in the power ranges of 1-16.5 megawatts and through its French subsidiary, Wartsila SACM Diesel, an important producer of high-speed engines. The company employs 6,000 persons in 40 countries.

For further information, please contact:

Ann C. Smith

Public Relations Director

Cummins Engine Co., Inc.

Columbus, IN U.S.A.

812-377-3524

Matti Tulkki, President-Director General

Wartsila SACM Diesel

tel. [phone]

Ole Johansson, Senior Vice President

Wartsila Diesel International Ltd OY

tel. [phone]

CONTACT: Cummins Engine Co., Inc., Columbus, IN U.S.A.

              Ann C. Smith, 812-377-3524
              Wartsila SACM Diesel
              Matti Tulkki, 33-89-66-68-02
              Wartsila Diesel International Ltd OY
              Ole Johansson, 358-0-709-5672