Eaton ( Eaton Corporation plc ) - an American engineering corporation, a manufacturer of electricaland hydraulic auto parts equipment components for the aviation industry .
|Type of||Public company|
|Location||USA : Beachwood ( Ohio )|
|Products||electrical engineering, hydraulic systems, auto and auto components|
|Turnover||▲ $ 20.4 billion (2017) |
|Net profit||▲ $ 3 billion|
|Capitalization||$ 34.2 billion (May 28, 2018) |
|Number of employees||96 thousand|
It was founded in 1911, in the first period it produced components for trucks. Starting from the 1920s and during all subsequent periods it developed mainly due to acquisitions  ; since the 1970s, it has focused on industrial diversification , amid the recession in the US automotive industry, reducing dependence on the demand for auto parts and acquiring manufacturers of electrical equipment and electronics (the share in the volume of sales of electrical products in 2018 amounted to more than 63%, and auto components - about 16%) , and since the 1980s, to expand its regional presence, moving away from concentration in the US market (from 80% in sales in 1980 to 55% in 2018). The largest acquisitions are Cooper Industries (2012, $ 11.8 billion), Moeller (2008, $ 2.23), Aeroqip-Vickers (1999, $ 1.7 billion); retained a significant part of the brands of products purchased companies (including Powerwave, Cutler-Hammer, Fuller). The main competitors as of the 2010s are Siemens , ABB , Schneider Electric , Bosch Rexroth  .
Founder - Joseph Eaton; The controlling shareholder since 1989 is Alexander Cutler. Operations are divided between two sectors - electrical and industrial (the latter includes the production of components and hydraulic equipment). The formal headquarters is located in Irish Dublin , the main governing structures are in the suburbs of Cleveland .
- 1 History
- 2 Owners and management
- 3 Performance Indicators
- 4 Electrical sector
- 5 Industrial sector
- 6 notes
- 7 Literature
- 8 References
It was founded in ( New Jersey , a suburb of Newark ) by Joseph Eaton ( born Joseph Oriel Eaton II ; 1873-1949) as a workshop for the production of heavy- duty axles for trucks . The co-founders of the business are a relative of Eton Henning Taube and Viggo Torbensen, who patented the original bridge design in 1902, and whose name the company was originally named - Torbensen Gear & Axle . In the first year, the workshop released only 7 bridges  .
In 1914, the company moved to Cleveland - closer to the main automobile plants in the Midwest . By 1917, the company reached the production level of 33 thousand bridges per year, and in the same year it was sold to its largest customer, the manufacturer of trucks.
In 1922, Eaton bought the bridge unit from the pre-bankrupt Republic  , renaming it Eaton Axle and Spring . In the very first years after this, the company focused on acquisitions of small Cleveland manufacturers of auto components, and thus within a few years became a manufacturer of bumpers , springs , poppet valves , as well as a number of components for the aviation industry  . The same strategy continued during the years of the Great Depression , when manufacturers of components and spare parts, which were on the verge of bankruptcy, were purchased, not only in Cleveland, but also beyond its borders. At the end of 1932, the company was renamed Eaton Manufacturing . In 1937, the first enterprise outside the United States was opened - the auto parts factory in Canada . With the New Deal , the company did not receive additional impulses, but maintained a small stable growth  . During the Second World War, a significant part of the production was reoriented to components for military vehicles.
In 1946, the company acquired Dynamics, a large American auto parts manufacturer, and in 1947 opened a joint venture with British aircraft engine and , gaining direct access to European markets. In 1958, the company was headed by John Wyrden, who aimed the organization at even greater autonomy of units and continued the acquisition strategy at a new pace. In the same year, a major manufacturer of gearboxes, Fuller, was purchased. In 1961, the company acquired Livia, an Italian auto parts dealer, who, since 1953, had an agreement on the exclusive supply of Eaton products and supplied Eaton valves with all Fiat and Simca trucks. In 1963, the company became a manufacturer of automotive electrical equipment through the takeover of Dole Valve.
In the same year, the well-known American company was acquired, founded in the middle of the 19th century by the inventor of cylinder locks with a horizontal bolt, and which dominated the market of automobile key mechanisms. In 1966, the company name was changed to Eaton, Yale, & Towne  . In the mid-1960s, the main auto parts production units suffered losses due to the reduction of orders from the main client General Motors , which reduced production volumes under pressure from European and Japanese manufacturers, and the good results of those Yale & Towne units of those years helped to maintain stability  . By 1969, Wyrden had retired, and Madenel de Windt was elected Chairman of the Board, former Fuller President Elliot Ludwigsen was the President, and former President of Yale & Towne Gordon Patterson was Vice President.
In 1971, the company received its modern name - Eaton Corporation. In the 1970s, in connection with the ongoing recession of the American automotive industry, all three major automotive component manufacturers in the US market - Eaton, and Rockwell - experienced a recession and adopted diversification programs; unlike Bendix, which was activated by acquisitions of local parts manufacturers and Rockwell, which switched to electronics , avionics and industrial automation , Eaton focused on a more stable market for truck components and an expanding international presence  . In the mid-1970s, $ 470 million was allocated to the diversification program, resulting in the absorption of hydraulic engine manufacturer Samuel Moore, developer of robotic warehouse equipment Kenway, and developer of electronic control systems in 1977. In 1978, the Yale & Towne castle division was sold to Thomas Telling, the proceeds were used to create areas for the production of timber and lifting equipment that were unprofitable, and overall financial results by the end of the 1970s due to high capital costs and low profitability of the business became unsatisfactory  . By 1979, the company came with a headcount of 69 thousand people, 79% of the revenue was generated through the sale of auto parts.
In the early 1980s, the corporation restructured to liquidate non-profitable divisions, and the forestry and lifting equipment business was sold in 1982 for $ 200 million. However, in 1982 the company ended up with losses of about $ 190 million with a turnover of $ 2.4 billion. According to the results of de Windt, he announced a course towards industry diversification and reorientation to growing high-tech markets. As a result, in 1984, 12 auto parts manufacturing plants were closed, the total number of personnel was reduced to 41 thousand people, the share of sales of products for the automotive industry in the corporation's revenue fell to 46% due to the growth in electronics production. However, in the mid-1980s, it was the American auto parts manufacturing divisions that showed the best profitability due to increased orders from International Harvester , Ford , General Motors and Paccar ; in 1985, the company showed a profit of about $ 230 million with a total revenue of $ 3.7 billion, revenue growth compared to the previous period - 13.4%.
In 1986, instead of the retired de Windt, the company was headed by Jim Stover. In the same year, the corporation allocated $ 1 billion for acquisitions, as a result of which it included, among others, the manufacturer of precision instruments Consolidated Controls, the manufacturer of valves and switches Singer Controls, the developer of defense electronic systems Pacific-Sierra Research. In 1989, control of the corporation was gained by Alexander Cutler ( born Alexander M. Cutler ; born 1951)   - the nephew of the co-owner Cuttler-Hammer and who came to the company with its takeover  . Since the second half of the 1980s, the AIL unit created on the basis of the Cutler-Hammer business experienced significant difficulties: the US Air Force stopped purchasing radar detectors for the B-1B bomber and billed $ 9.5 million according to the results of recalculations, the unit has been billed since 1986 sale, but due to the fact that no buyer was found, it was liquidated in 1993  .
In 1991, William Butler was appointed CEO of the corporation. The company ended in 1992 with a loss, in 1993 it again showed profit and revenue growth of 30%; the share of the auto parts business in the turnover increased again and amounted to about 50%. In 1993, the corporation adopted the next program of diversification and reducing dependence on the production of auto components, the main step in the implementation of which was the absorption in 1994 for $ 1.1 billion of the Cleveland division of Westinghouse Electric , which produced control and distribution power electric power equipment, which added the first year to revenue of $ 1 billion  .
In 1995, Butler retired, and Stephen Hardis, who had been the CFO for 9 years, took over the post of CEO and Chairman of the Board, and Cutler became the Chief Operating Officer. In 1996, following the strategy of expanding its presence in emerging markets , the Brazilian manufacturer of mechanical gearboxes for medium-duty vehicles CAPCO was acquired for $ 135 million; that same year, Fusion Systems, a developer of semiconductor equipment, was absorbed for nearly $ 300 million. At the same time, units considered to be non-core under the new strategy were closed or sold, for example, in 1997, British company Siebe sold a business for the production of control systems for $ 310 million, and a year later the remaining assets of the AIL unit were sold to its former employees  . In 1998, an asset swap took place with Corporation: $ 287 million worth of brake systems and truck springs were transferred to Dana, and clutch factories were transferred to Eaton with a business valuation of $ 180 million, deemed more complimentary to the borrower. a significant share in the production of gearboxes .
In 1999, Aeroqip-Vickers , the former hydraulic unit of acquired for $ 1.7 billion, the revenue of which amounted to $ 2.15 billion the year before the acquisition; Thus, the corporation immediately entered the second place in the market of hydraulic engineering (second only to Parker Hannifin ). This takeover generated another wave of business reform: many units were considered redundant to cover a major deal due to the incorporation of Aeroqip-Vickers into the corporation, including the production of fastening tools, engine cooling systems for cars and trucks, compact hydraulic cylinders , and a freshly acquired electronic Vickers division sold to Siemens . According to the restructuring results, five segments were identified in the corporation: components for cars, auto parts for trucks, hydraulics, industrial and commercial automation systems, and semiconductor engineering  . The corporation ended 1999 with revenue of $ 8.4 billion and a profit of $ 617 million.
In 2000, Hardis resigned, and Cutler took all the key positions in the corporation, becoming chairman of the board, president and CEO. In the same year, amid high debt levels ($ 3 billion at the beginning of 2000), it was decided to sell the direction of semiconductor engineering, the main products of which were ion implant systems inherited from Fusion Systems. was formed to carry out the operation, an initial offering of 18% of its shares was made, after which the remaining 82% was distributed among Eaton shareholders. In 2001-2002, units of automotive electronic switches and power distribution systems for marine vessels were sold for $ 300 million and $ 92.2, respectively, while a 50% stake in two hydraulic enterprises and an electrical division from Delta for $ 215 million were acquired from Sumitomo Heavy Industries . As a result, by 2003, the debt burden was reduced to $ 2 billion with revenues of more than $ 8 billion and net profit of $ 386 million  .
In June 2004, the corporation acquired Invensys for $ 560 million from , a manufacturer of uninterruptible power supplies with more than 10 plants with sales offices in more than 100 countries, which showed revenue of $ 775 million for 2004. In the same year, the hydraulic business was reinforced by the takeover of German-made Walterscheid Rohrverbindungstechnik fittings for $ 48 million.
In the second half of the 2000s, the corporation focused on expanding the electrical business for uninterruptible power systems for computers, acquiring the Taiwanese uninterruptible power supply collector Phoenixtec Power for $ 568 million, the small business uninterruptible power production unit from Schneider Electric for $ 570 million (trademark MGE and annual sales of $ 218 million)  , a British developer of uninterrupted systems for data centers Aphel Technologies, a California company, manufacturer of large uninterrupted systems Ania Pulizzi; The largest acquisition in the electrical industry was the takeover of the German manufacturer of uninterruptible power systems and automation equipment Moeller with a turnover of € 1 billion - the transaction was completed in 2008 and amounted to $ 2.23 billion. Thus, by the end of the 2000s, the corporation entered among the five key manufacturers of uninterruptible power supplies (along with ABB , , Emerson, and Schneider), while encountering difficulties due to the large number of intersections in the inherited product lines  .
In 2012, the corporation acquired Cooper Industries , an electrical company for $ 11.8 billion, while at the same time, for tax optimization reasons, it was decided to change jurisdiction and move its formal headquarters to Ireland (which the American Cooper did shortly before the takeover)  , all the managers Alexander Cutler retained posts in the corporation. The main corporate and administrative staff was left in the United States, in 2013 he was transferred from Cleveland headquarters to the Cleveland suburb of , where an office building with an area of about 54 thousand square meters, called the Eaton Center, was built specifically for the company. In 2016, the 65-year-old Cutler retired, and Craig Arnold  was appointed to the posts of chairman and CEO.
Owners and management
Almost 100% of the corporation's shares are in free float; stocks are traded on the New York Stock Exchange under the ticker symbol
ETN ; the controlling shareholder is Alexander Cutler ( born Alexander M. Cutler ), who held all key posts from 2000 to 2016; as of 2011, Cutler owned 0.79% of the shares  .
As of 2018, the posts of CEO and Chairman of the Board are joined by Craig Arnold , Vice Chairman and Chief Financial Officer Richard Fearon , and they are also members of the Board of Directors, which consists of 10 more independent members. Operations directors are Revathi Advaithi (Electrical Engineering) and Uday Yadav (Industrial).
For fiscal year 2017 (coinciding with the calendar year ), the corporation received a net profit of almost $ 3 billion with a turnover of $ 20.4 billion  . The company received the largest revenue in history in 2015 ($ 28.9 billion, with a net profit of less than $ 2 billion). Distribution of revenue by type of product according to the results of 2017:
- electrical goods - $ 7.2 billion,
- electrical systems and related services - $ 5.7 billion,
- car parts - $ 3.3
- hydraulic systems - $ 2.5 billion,
- components for the aviation industry - $ 1.7 billion
Revenues were distributed by region as follows:
- US - $ 11.2 billion
- Canada - $ 942 million
- Latin America - $ 1.5 billion
- Europe - $ 4.4 billion
- Asia Pacific - $ 2.4 billion
Total assets amounted to $ 32.6 billion, debt burden - $ 7.75 billion  ; early 2018 credit ratings : A- / A-2 with a negative outlook for S&P, Baa1 / P-2 with a stable outlook for Moody's , BBB + / F2 with a stable outlook for Fitch .
As of May 28, 2018, the corporation had a market capitalization of $ 34.2 billion  .
Within the electrotechnical sector, the production of uninterruptible power supplies , power distribution systems and panels , power circuit breakers , residual current devices, soft starters, surge protection and a number of other types of electrical devices are concentrated. In the same sector, measuring and engineering systems, operator panels with integrated controllers , as well as software for enterprise energy management systems are produced. Some of the equipment’s trademarks were saved from absorbed companies: Powerware (uninterruptible power supplies), Cutler-Hummer, Moeller, Cooper, Holek, MEM, Santak, B-Line and several others.
The hydraulic sector of the industrial sector produces Aeroquip, Airflex, Boston, Char-Lynn, Synflex, Vickers, Walterscheid brands, the main types of serial products - hydraulic cylinders, hydraulic motors, hydraulic pumps, valves, control valves, high pressure hoses, fittings, couplings, brakes, are also produced custom hydraulic systems.
Historically, the traditional direction is the production of automotive components and spare parts, among the products are gearboxes and control systems for them, mechanical boost compressors, clutches for trucks, parallel diesel-electric power systems for hybrid vehicles , plastic parts. The products are mainly manufactured under its own brand name, from the stored historical names - Detroit Locker, Detroit Truetrac and Fuller. The main customers of auto parts are Kenworth , Peterbilt , Oshkosh , NI , Freightliner , Volvo VNL , Sterling (gearboxes, differentials), Eaton turbochargers are used in all Volkswagen cars with TSI and TFSI engines, differential lock mechanisms are used in more than 100 brands of cars.
As part of the aeronautical components business, Aeroquip, Argo-Tech, Carter, Centurion, Vickers are producing electronic sensors and instrumentation, panels and controls for the cockpit, fuel systems, ground refueling systems, landing gear systems, auxiliary flight control systems , various drive mechanisms.
- Eaton. 2017 Annual Report (January 31, 2018).
- Eaton Corp PLC . Morning Star (May 28, 2018). Archived on May 28, 2018.
- Suresh Patel. Business Excellence. Exceeding Your Customer's Expectations Each Time, All the Time . - CRC Press, 2017 .-- ISBN 978-1-4987-5124-7 .
- Anastasia Dagaeva. Alexander Cutler: “During the crisis, we worked without a salary” . Vedomosti (August 9, 2011).
- Advameg, 2005 .
- David McMacken. Flash and Fizzle: the Rise and Fall the Republic Motor Truck Company. - Alma: Alma Public Library, 2011 .-- 197 p. - ISBN 9780615484358 .
- Cleveland History Encyclopedia, 2006 .
- Alexander M. Cutler . Reference for Business . Advameg.
- Advameg, 2005 , “reconsolidated” - as was written in the 1993 annual report.
- Eaton to buy Schneider's small systems business for $ 570 mln . Reuters (July 21, 2007).
- Sergey Zarubin. Under a single brand Eaton // CRN. - 2008. - No. 20 (313) .
- American Eaton will buy Irish Cooper for $ 11.8 billion . Vedomosti (May 22, 2012).
- Eaton: Alexander M. “Sandy” Cutler, Craig Arnold, Richard H. Fearon, Thomas S. Gross, Revathi Advaithi, Udu Yadv (Uday Yadav) . CRN (July 14, 2015).
- eaton.com - Eaton official website