In 1998, the United States Environmental Protection Agency (EPA) and US makers of heavy-duty diesel engines signed a consent decree which contained among other things, pulling forwards ("pull ahead") by 15 months a brand new nitrogen oxide (NOx) emission standard. By early 2002, Caterpillar and Detroit Diesel were requesting EPA to wait the "pull ahead". Its rivals to join in this request were pressuring Cummins. On the other side, the Environmental Protection Agency (EPA) and several environmental organizations needed Cummins to stick to the demands of the consent decree. Cummins couldn't afford to make a mistake and was navigating through an extremely challenging economic time.
Cummins Engine Business President Joe Loughrey and his team needed to make a strategic decision. Would they a) agree with the opponents' position asking EPA to delay the consent decree which required the company to pull ahead an expensive surroundings requirement, thereby allowing manufacturers to continue using the recognized engine technology that had customer support, or b) accept the conditions of the consent decree and continue to produce a new engine technology against the wishes of many in the business and therefore confront possible market retraction. Both strategic decision options needed to be cautiously assessed and had significant consequences. Not only was the future of Cummins Engine Business in jeopardy, but as we discover later, this choice affected the future of the entire business.
PUBLICATION DATE: January 16, 2015 PRODUCT #: NA0308-HCB-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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