UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2000

Commission File Number 1-4949.

Incorporated in the State of Indiana I.R.S. Employer Identification
                                                   No. 35-0257090

500 Jackson Street, Box 3005, Columbus, Indiana 47202-3005
(Address of Principal Executive Office)

Telephone Number: (812) 377-5000

(Full title of the plan)

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CUMMINS ENGINE COMPANY, INC. AND AFFILIATES

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Benefits Policy Committee
of Cummins Inc.:

We have audited the accompanying combining statements of net assets available for benefits of the CUMMINS ENGINE COMPANY, INC. AND AFFILIATES RETIREMENT AND SAVINGS PLANS (the Plans) as of December 31, 2000 and 1999, and the related combining statements of changes in net assets available for benefits, for the years ended December 31, 2000 and 1999. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plans as of December 31, 2000 and 1999, and the changes in the net assets available for benefits for the years ended December 31, 2000 and 1999, in conformity with accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes, matching contribution formulas, employing locations by plan, and loans or fixed income obligations in default or classified as uncollectible are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Indianapolis, Indiana,
June 15, 2001.

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(Amounts stated in 000's, except share and per share amounts)

1. SUMMARY OF THE PLAN

The Cummins Engine Company, Inc. and Affiliates (the Company or the Companies) Retirement and Savings Plans (the Plan or the Plans) are defined contribution plans that cover five employee groups, as described in Note 3. Participants have the opportunity to make pre-tax and after-tax contributions to the plan. Details of the plans are described in Note 2 and Note 3.

2. DESCRIPTION OF THE PLANS

Substantially all full-time, domestic employees of the Company and designated subsidiaries are eligible to participate in one of the Plans as soon as administratively possible. Nonresident aliens employed by the Company or a foreign subsidiary are eligible to participate if the Company owns at least 80 percent of the foreign subsidiary's common stock.

The Plans encourage voluntary savings through regular payroll deductions. Subject to limitations contained in the Internal Revenue Code and Regulations, participants may contribute up to 15 percent of gross pay (10 percent with respect to certain highly compensated participants) as pre-tax contributions, and 10 percent of gross pay as after-tax contributions (not to exceed 20 percent in total). In addition, participants are permitted to make voluntary additional after-tax contributions once each year.

Either at the end of each Plan year or on a monthly basis, the Companies make matching contributions for each participant's pre-tax and after-tax contributions that remain in the Plans at the end of the Plan year or month. The formulas for these matches, as set forth in the Plans, vary for each Company (see Schedule II). Certain groups of participants receive cash matches and other groups participate in the ESOP and Flexi Trust (as described below) and receive matching contributions in the form of Company common stock.

In July 1989, the Company established the ESOP Trust and sold 2,362,206 shares of its common stock at $31.75 per share (amounts reflect two-for-one common stock split) to the ESOP Trust in exchange for a $75,000 promissory note (the Note) secured by the shares. In December 1990, the ESOP Trust prepaid its then current indebtedness to the Company with proceeds from the issuance of $72,750 of 8.76 percent ESOP Notes due 1998 and guaranteed by the Company (see Note 6). The arrangement requires the Companies to contribute an aggregate annual amount to the ESOP Trust equal to the annual principal and interest payable under the terms of the Note after application of dividends paid on shares held in the ESOP Trust. As the ESOP Trust's indebtedness is repaid from these sources of funds, shares are allocated to the accounts of participants in the ESOP in relative proportion to each participant's contributions to the Plans as well as dividends received on shares previously allocated to the participant's account in the ESOP Trust. Effective July 1998 the ESOP Note was refinanced at 6.96 percent due 2010 and guaranteed by the Company (see Note 6). As of December 31, 2000, 1,335,574 shares were allocated and 1,026,632 remain unallocated in the ESOP Trust.

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In January 1997, the Company established the Flexi Trust and sold 3,750,000 shares of its common stock at $48.25 per share to the Flexi Trust in exchange for a $180,938 promissory note at 7.65 percent due 2012 secured by the shares. In the event contributions to, and earnings of, the Trust are insufficient to satisfy any installment of principal and interest on the due date thereof, the Company (acting through the Trust Committee) may, in its discretion, forgive such installment to the extent of the insufficiency. As the Flexi Trust is a trust of the Company, its unallocated assets and the promissory note are not reflected in the Plans.

Participant and Company cash matching contributions are deposited in the Trust and then invested in the nine investment funds in accordance with participant elections. Account balances and contributions can be invested in one or more of the nine investment funds in multiples of 1 percent. Fund reallocations can be changed daily with a limit of four times per month. Common stock account balances in the ESOP and Flexi Trust accounts can not be redirected into the other investment options unless participants are 55 years of age or older. Investment income is allocated to participant accounts on a daily basis.

Participants are permitted to withdraw their after-tax contributions, the Company cash matching contributions (after remaining in the account for two full plan years) and accumulated earnings thereon. Participants are also permitted to take out loans (see Note 3). In the event of financial hardship, participants are permitted to withdraw pre-tax contributions and accumulated earnings thereon. In-service withdrawals from the ESOP account are prohibited.

Upon termination of employment, immediate distribution is made to those participants with account balances less than or equal to $5. Terminating participants with account balances greater than $5 must consent to any payment prior to the attainment of age 70 1/2. Participants who do not consent to immediate distribution may subsequently elect in writing to begin receiving benefits as soon as is practical, provided that in any event the distribution commences no later than April 1 of the Plan year following the Plan year in which age 70 1/2 occurs. Account balances remaining in the Plans will continue to share in the earnings of the investments prior to distribution. Distributions from the ESOP and Flexi Trust portions of the Plans are in whole shares of stock allocated to participant accounts, with cash for partial shares unless participants elect to receive the entire distribution in cash at current market value.

While it has not expressed any intention to do so, the Company has the right to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Upon partial or total termination of the Plan, the rights of each participant to all amounts then credited to his or her account will continue to be nonforfeitable.

      Voting Rights of Cummins Engine Company, Inc. Common Stock

Each participant in Cummins Engine Company, Inc. Common Stock Fund is entitled to direct the Vanguard Group (the Trustee) as to the manner of voting at each meeting of shareholders, all shares of Cummins Engine Company, Inc. Common Stock (including fractional shares), represented by the value of the participant's interest in the Cummins Engine Company, Inc. Common Stock Fund. The Trustee bases the voting for the unallocated shares on the relative proportion of votes that were received from participants for the allocated shares.

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3. SUMMARY OF ACCOUNTING POLICIES

The Combining Statements of Net Assets Available for Benefits and Changes in Net Assets Available for Benefits reflect the financial activity of the Retirement and Savings Plans of Cummins Engine Company, Inc. and certain subsidiary companies. These Plans include:

• Cummins Engine Company, Inc. and Affiliates Retirement and Savings Plan for Bargaining Unit Employees (Bargaining Plan)

• Cummins Engine Company, Inc. Retirement and Savings Plan for Onan Corporation Employees (Onan Plan)

• Cummins Engine Company, Inc. Retirement and Savings Plan for Lubricant Consultants, Inc. Employees (Lubricon Plan)

• Cummins Engine Company, Inc. Retirement and Savings Plan for Consolidated Diesel Company Employees (CDC Plan)

A single trust arrangement is maintained with The Vanguard Group for the administration of all the investments in the Plans.

Accounting records are maintained by the Trustee on a modified cash basis. All material adjustments have been made to present the financial statements under the accrual basis of accounting as required by accounting principles generally accepted in the United States.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates.

Investments held by the Trust are stated at market value except for the investment contracts within the Fixed Income Fund, which are stated at contract value. Changes in market value of the investments are reflected in net realized and unrealized appreciation (depreciation) on the Combining Statements of Changes in Net Assets Available for Benefits. Quoted market prices are used to value investments.

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The following presents investments that represent 5 percent or more of the Plans' net assets at December 31:

*Includes non-participant directed

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During 2000 and 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:

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The Plan provides for investments in common stock, mutual funds and a fixed income fund that, in general, are exposed to various risks, such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the Combining Statements of Net Assets Available for Benefits.

The Cummins Engine Company, Inc. ESOP and the Cummins Engine Company, Inc. FlexiFund, which are included on the Investments at market value in the Combining Statements of Net Assets available for Benefits in the Salaried Plan only, are non-participant directed. Information about the net assets and changes in net assets for those funds for the year ended and ending December 31, is as follows:

                                                                           2000                                       1999

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The Fixed Income Fund consists primarily of insurance contracts and bank investment contracts with various insurance companies. The insurance companies maintain investment accounts for each contract. The accounts are credited with earnings on the underlying investments at interest rates ranging from 5.50 percent to 7.32 percent for 2000 and 1999 and charged for withdrawals and administrative expenses by the insurance companies. The contracts are included in the financial statements at contract value, as reported to the Plan by the investment administrator. Contract values represent contributions made under the contracts, plus earnings, less Plan withdrawals and administrative expenses. The crediting interest rate is based on an agreed upon formula with the issuer.

Like all the other investment alternatives, the Cummins Common Stock Fund is valued in units. The net asset value per unit fluctuates on a daily basis with the change in the price of Cummins Stock. At December 31, 2000 there were a total of 8,819,924 units and a net asset value of $64,826.

Net investment income (loss) of each fund is allocated to each Plan based on the relationship of each Plan's investment in the fund to the total investment in the fund. Net investment income (loss) is likewise allocated to participants based on the relationship of participant account balances in each fund to the total balance in each fund.

       Vesting

The interest of a participant or a former participant in his or her tax-deferred and after-tax contribution account, including the Company matching cash contributions, ESOP shares, Flexi Trust shares, and earnings thereon shall at all times be nonforfeitable and fully vested.

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       Participant Loans

The Plans permit participants to borrow portions of their accounts subject to Department of Labor regulations. Participants may take out loans limited to the lessor of $50 or 50 percent of the present value of their accounts (excluding ESOP and Flexi Trust accounts) over a period not to exceed 54 months. The annual interest rate is the Prime Rate, as quoted in the Wall Street Journal, plus 1 percent. The amount used to secure a loan is 50 percent of the participant's account balance. The interest rates on the outstanding loans range from 7.75 percent to 10.50 percent as of December 31, 2000.

       Administrative Expenses and Investment Advisory Fees

Administrative expenses such as record keeping fees are paid by the Companies. Investment advisory fees for portfolio management of Vanguard Funds are paid directly from fund earnings. Investment advisory fees for the Fixed Income Fund and ESOP Fund are paid directly from the fund, which are netted in dividend income on the Combining Statement of Changes in Net Assets Available for Benefits. The trust agreement entitles the Trustee to receive reasonable compensation for services rendered and expenses incurred in the administration and execution of the Plans.

4. TAX STATUS

The Internal Revenue Service issued determination letters stating that the Plans were qualified in accordance with applicable plan design requirements as of their dates. In the opinion of the Plan Administrator and Internal Tax Counsel, the Plans are currently designed and continue to operate in a manner that qualifies them under Internal Revenue Code (IRC) Section 401(a) and, therefore, are exempt from income taxes under the provisions of IRC Section 501(a). Accordingly, no provision for Federal income taxes has been made.

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The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500.
                                                                                                   Year Ended December 31,

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The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500.

                                                                                                     Year Ended December 31,

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Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 2000 and 1999, respectively, but not yet paid as of that date.

6. LONG-TERM DEBT

The ESOP Trust issued $72,750 of ESOP Notes due in 1998 with an annual interest rate of 8.76 percent payable semi-annually to the Note holders (see Note 2). Effective July 1998, the ESOP Notes were refinanced at 6.96 percent due 2010 and guaranteed by the Company. The balance of the ESOP note as of December 31, 2000 was $58,150. The final principal payment, $3,150, is due on January 4, 2010.

7. PARTIES-IN-INTEREST AND REPORTABLE TRANSACTIONS

Party-in-interest transactions during the plan year ended December 31, 2000 are included in Schedule I of these statements.

There are no non-participant directed transactions that qualify as reportable transactions during the plan year ended December 31, 2000.

8. RECLASSIFICATION

Certain items in the December 31, 1999 financial statements have been reclassified to conform to the December 31, 2000 classifications.

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* Identifies known party-in-interest to the plan

** See detail of Cummins Engine Company, Inc. Fixed Income Fund on Schedule I-A.

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* Identifies known party-in-interest to the plan

** See detail of Cummins Engine Company, Inc. Fixed Income Fund on Schedule I-A.

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* Identifies known party-in-interest to the plan

** See detail of Cummins Engine Company, Inc. Fixed Income Fund on Schedule I-A.

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*Participants at location 660 are ineligible to receive company match.

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( 1)  ESOP Stock Contribution based on 50% of 1^st 2% of pay contributed as a Pre-Tax Contribution

( 2)   ESOP Stock Contribution based on 50% of 1^st $900 of pay contributed as a Basic Savings Contribution

( 3)  Cash Contribution of 50% (up to a max of $325) of 1^st 2% of pay contributed as a Pre-Tax Contribution

( 4)  Cash Contribution of 50% of the 1^st $900 of pay contributed as a Basic Savings Contribution

( 5)  Cash Contribution of 50% on 1^st 6% of pay contributed as a Pre-Tax Contribution

( 6)  Cash Contribution based on 50% (up to a max of $900) on 1^st $1,800 of pay contributed as a Basic

         Savings Contribution

( 7)  ESOP Stock Contribution based on 100% of 1^st $250, 75% of next $250, 50% of next $1,000, and

         25% of next $1,000 (max stock match = $1,187.50). NOTE: Applies to Pre-Tax Contributions

( 8)  Cash Contribution of 25% of the 1^st $1,000 of pay contributed as a Basic Savings Contribution

( 9)  Cash Contribution of 50% of the 1^st 3% of pay contributed as a Pre-Tax Contribution

(10)  Cash Contribution of 50% of 1^st 4% of pay contributed as a Pre-Tax Contribution

(11)  ESOP Stock Contribution based on 50% of 1^st 6% of pay contributed as a Pre-Tax Contribution

(12)  Cash Contribution of $1 for $1 up to 2% of gross pay; $.25 on dollar up to next 4% of gross pay for pretax

(13)  Cash contribution of 50% of 1^st 2% of pay contributed as a Pre-Tax Contribution

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SCHEDULE OF EMPLOYING LOCATIONS BY PLAN
AS OF DECEMBER 31, 2000

Cummins Engine Company, Inc. and Affiliates Retirement and Savings Plan for
Salaried and Non-Bargaining Hourly Employees
EIN # 35-0257090
Plan 020
_____________________________________________________________________

Cummins Engine Company, Inc. Retirement and Savings Plan for
Onan Corporation Employees
EIN # 41-0965373
Plan 025
______________________________________________________________________

Cummins Engine Company, Inc. and Affiliates Retirement and Savings Plan for
Bargaining Unit Employees
EIN # 35-0257090
Plan 030
_____________________________________________________________________

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