Caterpillar and Eaton Corporation announce joint venture to provide fully integrated electric power distribution system
Organizations combine strengths to provide total systems solution
PEORIA, Illinois and CLEVELAND, Ohio . . . Caterpillar Inc. (NYSE: CAT) and Eaton Corporation (NYSE: ETN) today announced a joint venture to provide a total systems approach to integrated, reliable electric power solutions for customer needs.
The joint venture combines the global resources and expertise of Caterpillar, the Caterpillar® dealer network, and Eaton’s Cutler-Hammer Group. Eaton will own 51% of the joint venture, with Caterpillar owning the remaining 49%.
The joint venture will operate under the name Intelligent Switchgear Organization LLC and will be based in Alpharetta, Georgia. The joint venture will capitalize on the strong reputation Caterpillar has developed as a leading provider of advanced generator set control switchgear utilizing PowerLynx® technology and on Eaton’s strength in the electrical distribution switching market.
“This agreement represents each organization’s strong commitment to provide customers with a single source for the best in electric power generation equipment sales and service,” commented Jim Parker, Caterpillar vice president for the Power Systems Marketing Division. “This joint venture expands the Caterpillar branded switchgear offering for Caterpillar electric power generator sets into a total systems solution. When these quality components are combined with the Caterpillar dealer reputation for excellence in product support, you have a situation that can’t be matched in the electric power generation industry.”
The product lines for the joint venture will include paralleling switchgear and automatic transfer switches used for emergency or prime power applications for a wide variety of facilities, ranging from commercial and industrial facilities to utility and generation installations. The product line will carry the Cat brand. The joint venture will sell its products exclusively through Caterpillar dealer network focused initially in North America, with plans to begin expansion through the global Cat dealer network in 2004.
“Maintaining continuity of power during an outage or peak demand time is critical to our customers,” commented Randy Carson, Eaton senior vice president and group executive for Eaton’s Cutler-Hammer Group. “This total systems approach offers a single source for design, product support and customer service. Seamless integration of all elements means maximum customer value and assures our customers a quality product and the highest level of long-term, local product support.”
The North American markets to be served by the joint venture are approximately $500 million, with substantial growth expected over the next several years. It is anticipated that the joint venture will be able to capture a significant share of that market, and accordingly, the annual revenues within the next two to three years are expected to be in excess of $100 million.
About Eaton Corporation
Eaton Corporation is a global diversified industrial manufacturer with 2002 sales of $7.2 billion that is a leader in fluid power systems; electrical power quality, distribution and control; automotive engine air management and fuel economy; and intelligent drivetrain systems for fuel economy and safety in trucks. Eaton has 51,000 employees and sells products in more than 50 countries. For more information, visit www.eaton.com.
For more than 75 years, Caterpillar Inc. has been building the world’s infrastructure and, in partnership with its worldwide dealer network, is driving positive and sustainable change on every continent. With 2002 sales and revenues of $20.15 billion, Caterpillar is a technology leader and the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. More information is available at www.cat.com.
This news release contains forward-looking statements concerning North American market growth, market share and expected revenues. These statements should be used with caution. They are subject to various risks and uncertainties, many of which are outside the company's control. The following factors could cause actual results to differ materially from those in the forward-looking statements: unanticipated downturns in business relationships with customers or their purchases from us; the introduction of competing technologies; unexpected technical or marketing difficulties; and unanticipated further deterioration of economic and financial conditions in the United States and around the world. We do not assume any obligation to update these forward-looking statements.