JV to Develop and Market Alternate Fuel Engines to Meet Rapidly Growing Demand

    COLUMBUS, Ind. & VANCOUVER, British Columbia-- March 8, 2001--Cummins Inc. of Columbus, Indiana and Westport Innovations Inc. of Vancouver, British Columbia announced today the formation of a 50/50 joint venture (JV) to develop and market low-emissions, high performance natural gas engines.
    Under the terms of the agreement, Westport will contribute its high-pressure direct injection (HPDI) technology and other proprietary natural gas technologies, and Cummins will include its current on-highway vehicle medium-duty spark-ignited natural gas engines and proprietary engine related technologies for on-highway vehicles, industrial and power generation applications. Cummins will manufacture the engines that will be exclusively distributed and serviced by the Cummins distribution system. The joint venture is headquartered in Vancouver, with a board of directors consisting of three representatives from Cummins and three representatives from Westport.
    "There is increasing demand for natural gas powered products capable of demonstrating diesel-like performance and reliability in most of our markets," said Tim Solso, Cummins Chairman and Chief Executive Officer. "This joint venture combines the best of Westport's and Cummins technologies in a business model that we believe will profitably capture significant share in those markets."
    David Demers, President and Chief Executive Officer of Westport added, "We are proud of our continuing association with Cummins, recognized as the market leader in commercial diesel engines. Joint venture products will match diesel performance, deliver environmental benefits, and do so in an economic fashion. We are excited by this opportunity to deliver the world's first high performance, low emissions natural gas fueled engines."
    Through the 50/50 joint venture and related supply agreements, Cummins and Westport share equally in the profits on products developed and sold by the JV. For the first three years of the joint venture, Westport will contribute capital that the JV may require and is prepared, under the agreement, to invest up to US$50,000,000 over that period of time. Westport's existing technology development projects with other diesel engine manufacturers are not affected by the agreement with Cummins.
    "This joint venture will immediately generate sales from established products while at the same time securing an ideal and clear path to commercialization for Westport's HPDI-based technologies," added Demers. "Working with Cummins, we expect the joint venture to target the broadest possible range of alternatively fueled engines worldwide. No one else can provide the advantages that Cummins brings to the joint venture. Their existing and expanding alliances give us unprecedented access to global markets and their reputation for quality and customer support is second to none. In short, it is a perfect union, where the result is significantly greater than the sum of the parts."

    On-highway Vehicles Engines

    The joint venture has design and marketing responsibility for all of Cummins existing medium-duty natural gas products, including the B5.9G, B5.9LPG and C8.3G engines. These products will continue to be manufactured and distributed by Cummins. In 2000, Cummins sold over 1,800 spark-ignited engines for these markets, ranging from 150 to 275 horsepower.
    In addition, the joint venture will also offer the state-of-the-art ISX heavy-duty engine series incorporating Westport's patented HPDI technology. This product will represent the first natural gas heavy-duty engine capable of generating up to 600 horsepower for the truck market. It is expected that these products will provide a significant lifecycle cost benefit to end customers and will have the potential to create large market demand.
    "With this joint venture, Cummins and Westport have created a company with the broadest product line in the alternative fueled on-highway vehicle market," said Tom Kieffer, Executive Director, Marketing for Cummins Truck and Bus Business. "Our existing spark ignition line of natural gas engines has been well received in the medium-duty range and sales are expected to increase significantly this year. In the past, heavy-duty alternate fuel customers have had to make compromises, but with Westport's HPDI technology, we can provide cost effective solutions with diesel-like performance, which will be well received by traditional diesel customers. As a result, we will now offer a complete product line to the market, which will position the JV as the clear market leader in alternate-fueled products."

    Power Generation and Industrial Engines

    The JV is also responsible for the development of engines for power generation and high horsepower industrial applications such as mining. Cummins will continue the marketing of these products.
    "We are looking forward to adding HPDI-based products to our portfolio of large natural gas engine products, " said Steve Wardleworth, Executive Director, Global Engineering and Supply, Cummins Power Generation. "Combining forces with Westport enables Cummins to respond to the exciting opportunities presented by the worldwide industry trend towards de-regulation and distributed power generation. We have no doubt that we will, in the very short term, become the standard by which the industry is measured."
    Westport's technology was developed with the assistance of, among others, the University of British Columbia, the Science Council of British Columbia, the National Research Council of Canada's IRAP program, the Natural Sciences and Engineering Research Council of Canada, the California Air Resources Board, the United States Department of Energy, the California Energy Commission, and the Bay Area Air Quality Management District, and with the support and assistance of many dedicated suppliers and partners.
    Cummins is a pioneer in the development of technology that provides customers with the best life-cycle operating costs while achieving lower emissions levels. Since 1974, Cummins has lowered the NOx emissions for on-highway trucks by over 75%, and particulate matter (PM) emissions by over 90%, and is demonstrating new technology that will be required for future emissions regulations. More information on Cummins environmental leadership can be found in the Cummins 2000 Environmental Annual Report, available at: http://www.cummins.com/na/pdf/en/whoweare/environment/enviro_2000.pdf. The company's most recent environmental press releases are available at: www.cummins.com/na/pages/en/mediaresources/pressreleases/corporatereleases.cfm.
    Cummins Inc. is a leading worldwide designer and manufacturer of diesel and natural gas engines from 55 to 3,500 horsepower, and the world's largest producer of commercial diesel engines above 50 horsepower. The company provides products and services for customers in markets worldwide for engines, power generation and filtration, including engine components, natural gas engines, filtration systems, and information products and services. In 2000, Cummins reported record sales of $6.6 billion. Press releases by fax may be requested by calling News on Demand (Toll Free at 888-329-2305).
    On March 8, 2001 at 10:00 a.m. EST, representatives of Cummins and Westport will hold a joint conference call. The public is invited to monitor the call on the internet by visiting either the Cummins website at www.cummins.com or the Westport website at www.westport.com. Alternatively, the call can be accessed by telephone (listen only) at 212-271-4750.
    Note: This news release contains forward-looking statements about Cummins' and Westport's business and technology development plans based on the current expectations of management of both companies. Cummins and Westport caution investors that due to risks and uncertainties, actual events may differ materially from current expectations.