COLUMBUS, Ind. -- Cummins Inc. plans to add 600 to 800 jobs as it begins production of a new diesel-powered engine at a plant near its central Indiana headquarters, the company announced Wednesday.

The new light-duty engine will be offered in standard pickup trucks and sport-utility vehicles that are expected to hit the market by the end of 2010, company officials said. The diesel engine is expected to average a 30 percent fuel savings over gasoline-powered engines for comparable vehicles. The engines are expected to go into Chrysler products.

Gov. Mitch Daniels joined local and company officials for the announcement. Cummins had several offers to bring the jobs to other states, but said Indiana's $8 million in incentives too good to pass up.

"I'm real excited about it. This plant's been empty for way too long," said Cummins employee Jana Bunch. "It's a good thing for the community, and Cummins started here. Hopefully, this will bring some jobs back to the community."

Cummins' decision is the third major hiring announcement by an Indiana auto plant in the past six months.

Toyota Motor Corp. said in March that it would hire 1,000 workers to build Camrys at the Subaru plant in Lafayette, and Honda Motor Co. announced in June it would build a $550 million assembly plant in Greensburg that will employ some 2,000.

Columbus-based Cummins said work on the new diesel engine resulted from a 1997 partnership between it and the U.S. Department of Energy.

Cummins shares declined by $1.38, or 1 percent, to $132.06 in morning trading Wednesday on the New York Stock Exchange. The company's shares have traded between 77.80 and 137.88 over the past year.

The decision to build the new engine in Columbus follows the company in July extending its lease until 2019 to keep its corporate headquarters in the city about 40 miles south of Indianapolis.

About 750 people work at the Cummins headquarters. The company has 33,500 employees worldwide, including some 5,400 in Indiana, most in Columbus and nearby Seymour.