CLEVELAND, OHIO…Diversified industrial manufacturer Eaton Corporation (NYSE: ETN) announced today the signing of two new agreements in South America that are expected to generate more than $190 million in additional truck sales at the Eaton transmission facility in Valinhos, Sao Paulo, Brazil. Both agreements are for eight years.
Volvo Trucks has agreed to have Eaton begin manufacturing Volvo heavy-duty transmissions for the South American market. Total sales are estimated at $112 million.
In a separate agreement, Eaton will manufacture and deliver transmissions for AGCO and its four-wheel agricultural tractor project, known as the Buccaneer. Total sales are estimated to be $80 million. The agreement begins in 2003.
Under the Volvo agreement, Eaton will manufacture and deliver 100 percent of the Volvo transmissions that will be needed to meet production requirements in the South American market. Deliveries are scheduled to begin in October 2004. The 14-speed transmissions will replace similar units that are now being imported from Sweden, as well as a different model now being manufactured by a local independent transmission manufacturing company.
"Not only is this agreement beneficial to both Eaton and Volvo," said James Sweetnam, senior vice president and group executive -Truck, "but it also will favorably impact the Brazilian economy by replacing previously imported units with those that now will be locally produced."
For the new AGCO business, AGCO will be taking delivery of 8 X 8-speed, 12 X 12-speed, 12 X 4-speed and 8 X 2-speed transmissions at its manufacturing plant in Canoas, Rio Grande do Sul, Brazil. The transmissions were previously manufactured in the Massey Ferguson facility of AGCO in the United Kingdom. The tractors and transmissions will be marketed throughout Europe, Asia, Africa and the Middle East.
"This second agreement is another important step in the growth of our Brazilian operations," Sweetnam added. "Taken together, the new contracts will contribute positively to our Brazilian export strategy."
Eaton Corporation is a global $7.3 billion diversified industrial manufacturer that is a leader in fluid power systems; electrical power quality, distribution and control; automotive engine air management and fuel economy; and intelligent truck systems for fuel economy and safety. Eaton has 48,000 employees and sells products in more than 50 countries.
This news release contains forward-looking statements concerning the revenues expected from the Volvo and AGCO programs. These statements are subject to various risks and uncertainties, some of which are outside the company’s control. Among the factors that could cause actual results to differ materially from those forward-looking statements are changes in customer production requirements or to the economic or financial conditions in the world or the South American market. We do not assume any obligation to update these forward-looking statements.