Eaton selects Mexico transmission manufacturing site

Thu Feb 10, 2000 -

KALAMAZOO,MICHIGAN…Eaton Corporation's Truck Components Operations announced today that it has selected a site at the Tres Naciones Industrial Park in San Luis Potosi, Mexico, as the location for a new manufacturing plant to build transmissions for the North American market. The new facility will have 350,000 square feet and will cost more than $100 million.

"Our forecasts continue to indicate strong demand for Class 8 trucks over the next several years, continuing at or near the production rates we've seen over the last two years", according to Jim Sweetnam, operations vice president for Eaton's Heavy Duty Transmission and Clutch divisions. "The new plant at San Luis Potosi will provide a vehicle to implement a world class level of manufacturing technology and a new approach to employee involvement unparalleled in the trucking industry today."

Eaton's long-term industry production outlook and plans are based on an expectation of North American truck manufacturers increasing their unit production out of their Mexican assembly plants. The new Eaton transmission plant will provide the increased capacity and production flexibility necessary to serve Eaton's OEM customers' demands throughout NAFTA for the foreseeable future.

Construction begins in the next 60 days, with initial production slated for the first quarter of 2001. The plant will be built in two phases – first with assembly capability, then with full manufacturing capabilities. Eaton Fuller 13- and 18-speed transmissions will be built at the new plant as demand for Eaton's performance-oriented transmissions continues to grow throughout the NAFTA market.

"Tres Naciones Industrial Park was an ideal location for the new facility", according to Dick Perry, project manager for the new facility. "San Luis Potosi is located about midway between Mexico City and Monterrey, in the heart of the Mexican trucking industry." Other residents of San Luis Potosi include Cummins, Bosch, Valeo and Goodyear.

"As a good portion of NAFTA commercial truck manufacturing is becoming located in Mexico, it makes good geographic sense to manufacture our transmissions in Mexico", said Sweetnam, "but production from this plant will be routed throughout North America, to all our NAFTA OEM customers. Given the continuing strength in the North American heavy duty truck market, and Eaton's optimism about the market's prospects in the next decade, this plant's capacity will be needed to meet our customers' requirements, and should not affect plans for existing North American truck transmission facilities."

The company said that the project confirms to its customers that Eaton is committed to their continued success throughout North America by providing an uninterrupted flow of world-class quality truck transmissions. The new plant will also complement Eaton's Roadranger regional sales and service facility headquartered in Monterrey, Mexico, that serves the new product and aftermarket needs of its Mexican customers.

Eaton Truck Components Operations is the leader in the design, manufacture and marketing of drivetrain systems and components for medium duty and heavy duty commercial vehicles. In concert with its manufacturing and marketing partners, principally Dana Corporation, Eaton provides manual and automatic transmissions, clutches, driveshafts, steer, drive and trailer axles, brakes and chassis control systems, and fleet logistics, communications and management.

Eaton is a global 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. Headquartered in Cleveland, Ohio, the company has 63,000 employees and 195 manufacturing sites in 23 countries. Eaton's sales for 1999 were $8.4 billion.

The forward-looking statements in this news release should be used with caution. They are subject to various risks and uncertainties, many of which are outside the control of the company. The most important factor, which could cause actual events to differ materially from those in the forward-looking statements, is change in the condition of the North American heavy truck market.



Contact Information

Renald Romain


William Hartman, vice president, Investor Relations