Cummins Westport revamps joint venture

Westport Innovations and Cummins Inc. revise economic terms of joint venture

February 20, 2012   by The Canadian Press

VANCOUVER: Natural gas engine technology maker Westport Innovations Inc. has changed a joint venture with Cummins Inc. to refocus on stronger growth in the North American market.

The Vancouver company said the Cummins Westport (CWI) venture will narrow its focus on developing new fuel-efficient engines for North American customers.

Under an earlier deal, the 50-50 joint venture had exclusive global rights to design, engineer and sell mid-range natural gas engines based on Cummins diesel engines.

The new agreement revises some of the economic terms of the earlier deal and clarifies what engines can be built by the joint venture.


“Over the past 10 years, CWI has emerged as the pre-eminent supplier of high performance natural gas engines for commercial vehicles,” said David Demers, CEO of Westport Innovations. “With this new agreement, we have taken the necessary steps to provide CWI with a platform for continued growth and success over the next 10 years, while recognizing the dramatically increased interest in natural gas as a fuel.”

CWI has also announced a new 12-litre natural gas engine based on the Cummins ISX12 diesel engine, expected to be in production early 2013.

Cummins Westport will market the new engine in North America, while Cummins will have the option of developing international versions.

Westport also said it has signed a deal with Cummins to allow manufacturing of the Westport HD 15-litre engine in a Cummins factory in Jamestown, N.Y.

The joint venture, which will focus on engines between 5.9 litres through 12 litres, will run for 10 years.

Westport lost $13.2 million in 2011’s third quarter compared with a loss of $6.2 million a year earlier.

Revenue for what was the company’s second quarter totalled $81 million, up from $44.9 million.

CWI saw revenue climbed to $49.2 million on 1,625 units compared with $30.9 million on 1,096 units a year ago.

Westport develops engines that operate on clean-burning fuels such as compressed natural gas, liquefied natural gas, hydrogen, and renewable natural gas fuels such as landfill gas.

© 2012 The Canadian Press

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