Eaton and First Auto Works (FAW) form joint venture in Changchun, China to supply truck transmissions



CLEVELAND ... Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) announced today it signed an agreement to form a joint venture with FAW Jiefang Automotive Co., Ltd., in Changchun, China to produce a complete line of medium-duty transmissions for commercial vehicles and buses for the growing Chinese market.

FAW Jiefang Automotive Co., Ltd. is the commercial vehicle subsidiary of China First Auto Works Group Company (FAW). Eaton and FAW Jiefang will have equal ownership of the joint venture, which will be called FAW Eaton Transmission Co., Ltd. Terms were not disclosed. The joint venture is expected to receive Chinese government approval in the next few months.

The joint venture will produce transmissions in FAW's existing manufacturing facility in Changchun in the northeastern province of Jilin. The joint venture will invest in new and upgraded equipment to supply advanced transmission technologies for China's truck and bus markets.

"We are pleased to join with such a well-recognized partner as FAW -- one of the world's largest truck producers and China's largest vehicle manufacturer," said Alexander M. Cutler, Eaton chairman and chief executive officer. "This joint venture strengthens Eaton's presence in China's expanding transportation infrastructure and provides customers in China with direct access to our proven, advanced technology transmission products."

Cutler added, "Once the joint venture is finalized, Eaton will have established two recent joint ventures to supply advanced medium- and heavy-duty transmissions for truck manufacturers in China."

In November 2003, Eaton completed the formation of a joint venture with Shaanxi Fast Gear Co., Ltd. and Xiang Torch Investment Co., Ltd. called Eaton Fast Gear (Xi'an) Co., Ltd. to supply heavy-duty truck transmissions.

Eaton Corporation is a global diversified industrial manufacturer with 2003 sales of $8.1 billion that is a leader in fluid power systems; electrical power quality, distribution and control; automotive engine air management and powertrain controls for fuel economy; and intelligent drivetrain systems for fuel economy and safety in trucks. Eaton has 51,000 employees and sells products to customers in more than 100 countries.


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William Hartman, vice president, Investor Relations

Gary Klasen, director, Media Relations