Date: October 31, 2006

Eaton Expands Hydraulics Operations in China

SHANGHAI … Diversified industrial manufacturer Eaton Corporation today said it has further expanded its hydraulics operations in China by launching a new plant in Jining City, Shandong Province. The new facility will be Eaton’s largest manufacturing base for hydraulics products in Asia Pacific.

The new plant of Eaton Hydraulics System (Jining) Co., Ltd. produces steering pumps and fluid power motors for both domestic and global customers. Eaton has completed the first-phase construction of the new plant and started production in the 18,000-square meter workshop. The products manufactured in this operation will be sold to customers in China, Japan, North America and Australia.

“The expansion of our hydraulics plant in Jining is another positive step forward in furthering Eaton’s strategy to become a hydraulic systems leader in the Asia Pacific region,” said Craig Arnold, Eaton senior vice president and president – Fluid Power Group. “One of our objectives in China is to develop the region as a significant manufacturing base. We will continue to expand our state of the art manufacturing presence in this important market.”

Eaton began operations in China in 1993 through a joint venture agreement to manufacture steering control units and hydraulic motors in Jining. As of May 2002, Eaton wholly owns Eaton Hydraulics System (Jining) Co., Ltd. The facility has approximately 350 employees.

Eaton’s presence has grown significantly in China through acquisitions, joint ventures and wholly owned subsidiaries. Today it has 18 manufacturing facilities and 26 sales offices, with more than 5,000 employees in the region.

Eaton also has fluid power manufacturing and assembly operations in India, Japan, Singapore, Australia and New Zealand, as well as sales and warehousing operations throughout the region.

With sales of $3.2 billion in 2005, Eaton Corporation’s Fluid Power business is a worldwide leader in the design, manufacture and marketing of a comprehensive line of reliable, high-efficiency hydraulic systems and components for use in mobile, industrial and aerospace applications. Mobile and industrial markets include agriculture, construction, mining, forestry, utility, material handling, machine tools, molding and primary metals.

Eaton Corporation is a diversified industrial manufacturer with 2005 sales of $11.1 billion. Eaton is a global leader in electrical systems and components for power quality, distribution and control; fluid power systems and services for industrial, mobile and aircraft equipment; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. Eaton has 60,000 employees and sells products to customers in more than 125 countries.

Contact: Vivian Xiao
(86-21) 6387 9988 ext. 634
vivianxiao@eaton.com