CLEVELAND, OHIO…Eaton Corporation (NYSE:ETN) today said it has signed a multiyear, $250 million agreement to supply medium-duty truck transmission components to DaimlerChrysler AG in Brazil. The agreement calls for Eaton to deliver all the internal components for each of four transmission models from its Mogi Mirim facility to the DaimlerChrysler plant in nearby Sao Bernardo/Sao Paulo.
Eaton said it will expand its newly-constructed Mogi Mirim truck components facility to meet production requirements, and will begin delivering part-sets to DaimlerChrysler in June, 2002. When in full production, the operation will ship 60,000 part-sets annually and employ 250.
Eaton Chairman and Chief Executive Officer Alexander M. Cutler said the DaimlerChrysler agreement now gives Eaton a significant leadership position in mechanical truck transmissions in South American and European markets that complements the company’s strong North American position.
"This is a particularly important agreement. It recognizes Eaton's global truck component manufacturing capability, and further facilitates our global scale. Mogi Mirim employs world-class manufacturing technology and will adhere to the quality standards that have made us a leading supplier of truck transmissions and clutches globally, including manufacturing capability on four continents, and robust sales activities on six.
"It is also an expression of our confidence in the Mercosur trading area. Our Truck Components business, when combined with Eaton’s existing Automotive Components, Fluid Power and Industrial and Commercial Controls business segments, represents annual sales in South America in excess of $400 million," Cutler said.
The company said it will begin construction on an addition to support the DaimlerChrysler agreement, and additional manufacturing at the Mogi Mirim facility, in the first quarter, 2001. In addition to the 6-speed transmission components covered by this agreement, the company will also supply Eaton-designed transmissions for the DaimlerChrysler Dakota pickup truck, as well as 9-speed medium-size truck transmissions, beginning in 2001.
Medium-duty trucks typically weigh between 14,000 and 33,000 pounds, and are primarily used for short-run, intra-city purposes. Eaton said approximately 50 percent of the transmissions will be for the Mercosur market, with the balance being assembled and shipped to Europe. Mercosur is comprised of Argentina, Brazil, Paraguay and Uruguay.
Eaton's Truck Components business is a leader in the design, manufacture and marketing of drivetrain systems and components for medium-duty and heavy-duty commercial vehicles worldwide. Eaton provides manual transmissions and clutches, automatic transmissions and collision warning systems, as well as logistics, communications and management tools for truck fleets.
With 1999 sales of $8.4 billion, Eaton is a global diversified industrial manufacturer of highly engineered products that serve industrial, vehicle, construction, commercial, aerospace and semiconductor markets. Principal products include hydraulic products and fluid connectors, electrical power distribution and control equipment, truck drivetrain systems, engine components, ion implanters and a wide variety of controls. The company has 64,000 employees and 200 manufacturing sites in 24 countries.