Anne Trobaugh

Economic Impact

Analysis – US

2

Objective:Objective:

Benefits:Benefits:

Project Project

Team: Team:

Belt: Anne Trobaugh Concur Expense (travel): Pat Breeden

Sponsor: Jean Blackwell Tax: Vince Akers, Terry Johnson

Quality Champion: Carole Casto Health Care: Jill Olds, Kathy Peters

OneSource Data: Lance Farmer Tuition Assistance: Rashada Cherry

Global Real Estate: Todd Clark Charitable Donations: Marsha Allamanno

Facilities: Frank Clark 3PL/Transport/Warehouse: Beverly Johnson

Distribution: David Allen Retirement: Kelly Higgs, Jeff McKinney,

MBB: Paula Watson Claud Blackburn

Develop a process for analyzing the economic and community impactthat Cummins has in various US states.

Framework for understanding how we impact our communities

Discussions with government officials

Growth impact in a specific region

Economic Impact Analysis

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Background

Focused on 8 states with ~96% of the US workforce (16,647):

– Iowa

– Indiana

– Minnesota

– North Carolina

– New York

– South Carolina

– Tennessee

– Wisconsin

Two types of impact analysis

– Direct

– Overall

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Background

Direct Impact

– Voice of the Business

Overall Impact

– IMPLAN (IMpact Analysis for PLANning) model

– Statistical information at the national, state, and county level on

employment, employee compensation, proprietary income,

population, government and private expenditures

– Results are then analyzed for each county and industry to create

an economic multiplier

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*According to Towers Perrin

2007 Healthcare Spend Per Employee

8

2007 Charitable Giving Spend Per Employee

9

$1.4B

$5.1B

$466M

$453M

$522M

$1.2B

$291M

$162M

$9.7B$1.5B

$281M

$57M

$1.0B

$422M

$351M

$258M

$684M$4.5B

Cummins Direct & Overall Impacton the United States

Red: Overall

Black: Direct

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Cummins Direct & Overall Impacton the United States – Employees

6,247

16,885

2,746

3,353

2,604

3,430

1,608

925

36,6545,103

1,282

570

1,527

1,708

2,373

1,017

1,92316,647

Red: Overall

Black: Direct

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Number of Overall EmployeesImpacted per Cummins Employee

2.7

1.7

1.6

2.71.6

1.4

1.6

2.2

2.6

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Outcomes

Process Design

– For duplication when directed by leadership

– Owned by CFO office

Uses of the Analysis

– Corporate responsibility using analysis to understandcommunity impact

– Government relations

– Spin off project to analyze the impact of exports

– Stimulus package (ARRA) jobs estimator