DOW JONES NEWSWIRES 
 

Cummins Inc. (CMI) said it will cut some 400 workers by March at its filtration business as the engine maker deals with slumping revenue.

The company last month said it wasn't anticipating any recovery in its markets this year as Cummins reported an 81% plunge in second-quarter profit.

Cummins Filtration said Tuesday it is consolidating a "significant portion" of its North American filter-assembly operations into its facility in Mexico "in order to keep the business competitive in this region." Operations at an Iowa plant will move there, cutting some 400 of the 510 jobs at the site.

The company added it is considering moving additional assembly work for oil and fuel filters from a Tennessee facility, but a final decision hasn't been made yet.

Cost savings weren't detailed but were called "significant" on an annual basis.

The Mexico plant, in San Luis Potosi, has been operational since the early 1980s and employs some 2,000 people.

Cummins Filtration is the largest part of Cummins' components group, which has been among the hardest-hit of the company's operations. The components business swung to a loss in the second quarter as revenue slumped 41%, including 37% for filtration.

Cummins Filtration President Joseph Saoud called the sales slump the worst in its 52-year history. "We do not expect any meaningful recovery in demand until 2011," he added.

Cummins has nearly 40,000 employees. Its stock was recently up 1.9% at $47.62; it has gained 78% this year.

-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354; kevin.kingsbury@dowjones.com