Recently, the bigwigs of music and movies have been carefully identifying and selecting outstanding performances for recognition. Here at The Motley Fool, we decided that America's best public companies deserve a little recognition of their own.
Our team combed through more than 1,700 companies and examined how well they served four groups of stakeholders: investors, customers, employees, and the world at large. The result was our list of the 25 best companies in America.
The company that came away with the top spot isn't exactly a household name, but chances are that this independent engine manufacturer has contributed to your quality of life in some way or another. Since 1919, Cummins (NYSE:CMI) has been a leader in the design and manufacture of world-class, high-performance engines.
Cummins' engines are renowned for their reliability, fuel efficiency, and low emissions, and can be found in long-haul trucks, buses, light-duty vehicles, and heavy equipment for construction, agriculture, and mining. Cummins tops our list not only because its superior products delight their customers, thereby supporting good jobs for employees and great returns for investors, but also because Cummins is a purpose-driven company whose work contributes to a greener, safer, more productive world.
The case for Cummins
It's easy to be sustainable in an industry like software or up-scale retail, when your business isn't very environmentally intensive in the first place. But as a manufacturer, especially an engine maker, one might expect that Cummins would have to use lots of resources and create lots of pollution in order to stay competitive. Nothing could be further from the truth.
Cummins has aggressively cut its own greenhouse gas emissions, beating its own goals by reducing emissions 28% (from 2005 levels) in 2010. This achievement allowed the company to win the EPA's inaugural Climate Leadership Awards. Now Cummins has set an ambitious goal of reducing emissions 40% by 2015.
For its own products, Cummins views tighter fuel efficiency and emissions regulations not as obstacles, but as opportunities to showcase the company's market-leading technology in making the cleanest, most efficient engines. Cummins has a big presence in the natural gas engine market through its joint venture with Westport Innovations (NASDAQ:WPRT). As a fuel source, natural gas is not only cheaper than petroleum, but dramatically cleaner, helping truckers save money on fuel and contributing fewer particulate pollutants and greenhouse gas emissions.
Even Cummins' diesel engines are among the world's cleanest. Cummins' clean diesel technology advantage was demonstrated powerfully in 2012, when integrated truckmaker Navistar's (NYSE:NAV) own engines were found to be non-compliant with EPA standards. As a maker of both truck bodies and engines, Navistar had historically been a competitor to Cummins. When the EPA doubled its fines on the non-compliant engines, Navistar was forced to buy engines and component technology from Cummins in order to continue operations, transforming from major competitor to major customer at a stroke.
To prepare for what it sees as a bright future worldwide, Cummins has been investing in its workforce by launching the Technical Education for Communities program, a charitable endeavor that provides youths in economically disadvantaged areas the skills and experience needed to gain good jobs in manufacturing industries like Cummins. The program launched in poor communities in China, India, and Morocco, with more planned in other Cummins communities.
The Foolish bottom line
Over the long term, Cummins stakeholders have been richly rewarded, and as stricter environmental protections are passed worldwide, the future is bright for the company. Cummins is a powerful demonstration that when a company focuses on the good of all stakeholders, financial performance is helped, not hindered.
- The complete list: The 25 Best Companies in America
- See who finished second: Teradata
- Third is a familiar name: Colgate-Palmolive
Daniel Ferry owns shares of Westport Innovations. Motley Fool newsletter services have recommended buying shares of Cummins and Westport Innovations. The Motley Fool has a disclosure policy.