Date: March 23, 2007

Eaton Enters Research and Technology Agreements with Three Chinese Universities

SHANGHAI … Diversified industrial manufacturer Eaton Corporation announced today that it has signed memorandums of understanding with three top universities in China respectively to sponsor research programs and develop advanced technologies for its core businesses.

Under the agreements, Eaton will cooperate with Zhejiang University in Hangzhou, Zhejiang, Huazhong University of Science and Technology in Wuhan, Hubei, and Xi’an Jiaotong University in Xi’an, Shannxi. Eaton and the universities will develop technologies in advanced hydraulics systems, power electronics, power supply infrastructure and management, advanced powertrain, materials and renewable energies.

Yannis P. Tsavalas, Eaton vice president and chief technology officer, said, “We are pleased to have the opportunity to cooperate with some of the top universities in China. Our objective is to leverage the resources and expertise of the universities through collaboration in key areas to grow Eaton’s businesses in the global market.

“Also, this will help improve the research and development capabilities of the partners by providing funding and sharing our outstanding technical capabilities,” Tsavalas said.

Tsavalas visited the three universities in his trip to China this week. He said,” We are committed to increasing our research and development initiatives locally.”

Eaton has established an Electrical Research and Development Center in Suzhou, Jiangsu. The center expands upon the acquisition of Senyuan International Holdings in Changzhou, Jiangsu by strengthening its product offerings in the China market and growing its global product development capabilities for electrical products. Eaton will expand the design center by more than doubling the number of engineers during the next two years to strengthen its design capabilities in low and medium voltage components, systems, and solutions.

Eaton is an innovative company with excellent products and services in transportation and power industries. Innovations such as the hybrid truck technologies represent Eaton’s focus on energy management, market-leading products and environmental responsiveness.

In 2006, Eaton received the “Environmental Innovation Award” of the Ohio Environmental Council (OEC) for its new hydraulic hybrid and hybrid electric technologies for trucks. Eaton joined with the U.S. Environmental Protection Agency (EPA), UPS, International Truck and Engine Corporation and the U.S. Army to develop the first-ever hydraulic hybrid diesel urban delivery vehicle. Also cited by OEC was Eaton’s development of a hybrid electric powertrain in concert with FedEx and Environmental Defense. Both technologies significantly improve fuel economy and reduce emissions.

In China, Eaton has supplied the hybrid power system for two prototype buses for Beiqi Foton AUV Bus Company. The buses are part of the Clean Bus Competition for the 2008 Beijing Olympic Games and 2010 Shanghai World Expo.

Eaton Corporation is a diversified industrial manufacturer with 2006 sales of $12.4 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.

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