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Cory Murray, a battery technician, adds firmware to a circuit board at Brammo in Talent. Some operations will continue in Talent, despite Brammo's sale to Cummins. [Mail Tribune file photo]

Brammo assets sold to Cummins

TALENT — The manufacturing world craves the battery and electric storage technology Brammo Inc. developed.

It's one thing to develop ideas into viable technology; it's another to provide it on a global scale as policymakers from Beijing to Berlin and Washington seek to replace fossil-fueled vehicles. Even so, Brammo founder Craig Bramscher knew he lacked the resources to meet the demand in an industry changing at bullet-train speeds.

Now Bramscher has turned to someone with the capability to convert his company's technology to cash flow — Cummins Inc., a diesel and natural gas engine behemoth but a relative newcomer to electrical engine technology.

The Columbus, Indiana, firm today said it will acquire Brammo's assets in a deal expected to close by the end of the year. Third-party sources say the transaction is worth as much as $70 million.

"We predicted this was going to go really fast several years ago," Bramscher said in an interview. "The problem is that it's going really fast right now, and has been accelerating for the last 18 to 24 months.  From my perspective, the opportunity dramatically outstripped our ability and resources to grow. We've had customers around the world showing interest, and now we can say yes. This (sale) allows us to do that, and scale-up more quickly."

Tom Linebarger, Cummins' chairman and CEO, characterized acquisition of Brammo’s battery pack expertise as a key milestone en route to becoming a global leader of electrified power systems as it is with diesel- and natural gas-driven powertrains.

"We are taking a step forward in our electrification business and differentiating ourselves from our competition," Linebarger said.

Cummins, which produces more than a million diesel and natural gas engines annually, earned $1.39 billion on sales of $17.5 billion in 2016, but less than 1 percent came from electrical engines, said Julie Furber, executive director of Cummins Electrification Business Development, in an interview.

In January 2015, Bramscher sold Brammo's electric motorcycle business to Minnesota-based power-sports giant Polaris, positioning the firm to turn its technology into revenue streams. That notion was short-lived, however, as transition to electrified transportation moved at warp speed.

In September 2016, Brammo and Raymond Corp., a wholly owned subsidiary of Toyota, of Greene, New York, announced a battery technology ideal for electric forklifts. Last month, Raymond unveiled its latest Walkie Pallet Truck powered by Brammo lithium-ion technology. While it demonstrated the veracity of the Brammo product, it also underscored the need for greater resources than Bramscher had, even after several rounds of investment.

"Once you land a big customer like Raymond, it absorbs most of your resources," Bramscher said.

Cummins provided a way for Brammo to realize its potential.

Capital was one component, Bramscher said. Cummins provides product solutions, support and warranty services.

"The idea of scaling up globally is both capital intensive and takes quite a bit of time," Bramscher said. "Although we were earlier to electrification when we came out with our (Enertia) motorcycle back in 2008, everybody has an electrification strategy now. It just depends on how fast they want to move. Our customers are always asking, 'Can you move faster?' "

 As development hurtled along, so did Bramscher's discussions with Cummins.

"Every market has its tipping point," Bramscher said. "Battery technology has become more feasible. Snow and turf (vehicles) have their own tipping point, and cars and trucks will have their tipping point if you can go 600 miles on a charge. If you asked me in 2008 if you could produce a truck that could do 100 miles an hour and charge quickly, I'd have said it was a ways off. But we're there now."

Bramscher will remain with the company "for the foreseeable future," Furber said. However, his title will change from chairman and CEO.

The entrepreneur, who moved to Ashland two decades ago, said he struggled to attract top-tier electrical engineers to work for a small company in the Rogue Valley over the years because of its isolation from tech hubs.

"They like the town, but if Brammo is the only option, it's a little harder to get them to move here to join a start-up," Bramscher said. "Being part of Cummins will relinquish those fears, in my view. I'm quite anxious to keep recruiting after this announcement."

Bramscher said Brammo investors will share in the proceeds of the sale, but declined to elaborate, as did Cummins executives.

Cummins hinted at the move in June when it announced it was exploring partnerships to ensure development of leading technology in energy storage, power electronics, traction motor systems and component control for commercial applications. The company plans to begin electrified powertrain delivery in 2019, including battery electric and plug-in hybrids.

Last month, Cummins and GILLIG, a California bus builder, announced a deal to produce zero-emissions commuter buses with a 200-mile operating range on a single charge.

Cummins said Brammo, formed in 2002, will continue operations in Talent.

Furber said the addition of the engineering staff in Talent will boost her department to more than 100, including those working in the United Kingdom.

"Brammo battery packs have the capability and durability for off-highway and harsh environments," she said. "We're excited to make a great addition to our electrification team. We have a huge distribution network and presence in the Northwest. We will be able to utilize some of those resources here."

— Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.

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