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Cummins’ integration plan for Meritor coming into focus

Cummins completed its acquisition of Meritor last August, and is now offering some visibility into how the two powerhouse brands will be integrated.

A press briefing was held at MEMA’s Heavy Duty Aftermarket Week to update trucking press on the acquisition. ‘Better together’ is the tagline the companies have adopted to describe the deal.

Alan Rabadi picture
Cummins’ general manager – global aftermarket and business development Alan Rabadi discusses the integration of Meritor at an HDAW press briefing. (Photo: James Menzies)

“Employees have broader access to technologies, people and resources that weren’t there before,” said Alan Rabadi, general manager – global aftermarket and business development with Cummins. “And customers will win with this integration. With the core products we have today we are going to have opportunities for better integration and technological development.”

Parent company Cummins now has five business segments: Engine; Power Systems; Components (which includes Meritor’s business); Distribution; and New Power. Meritor will maintain its own recognizable branding within the Components business. Its Euclid all-makes aftermarket parts line will be marketed as a private label brand for independent distributors.

“It’s a distributor-only brand,” explained Joe Mejaly, vice-president – aftermarket with Meritor. “Our goal is to give the distributor access to something they can distribute through their networks. The initial response has been very favorable. It will be a staple within our brand portfolio.”

The acquisition gives Cummins a broader global product portfolio without much overlap.

“We are also able to pull on the strengths both companies have,” said Rabadi.

An example of this is in how Cummins salvages components for remanufacturing. “We have always been very good at remanufacturing at Meritor,” said Mejaly. “But how do you remanufacture the steel or the product so you get higher salvage rates and yields? We saw [Cummins’] facility and were blown away by the technology that exists.”

The two companies are also comparing global footprints and looking for areas where they can combine purchasing power, warehousing, and freight and logistics activities. Cummins also uses a more elaborate pricing software that Meritor will adopt, Mejaly noted.

“Headcount is not their priority,” Mejaly said of the new parent company as it integrates the two brands. “Efficiency is. They’re taking their time, asking the questions, learning about our business, and collaboratively making decisions with us involved.”

One of the most attractive products Meritor brings to the table is its electric axles, which fit into Cummins’ Destination Zero initiative that will see it offer only zero emissions products by 2050.  

“Meritor, with its electric powertrain, fits in perfectly,” Rabadi said. “Now we have a power agnostic powertrain and driveline where we can develop battery solutions and fuel cell solutions, and tether that around Meritor’s electric powertrain.”

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