About Eaton Industrial Corporation
For power management company Eaton, diversified operations are key to a healthy business. Helping customers manage electrical, hydraulic and mechanical power with efficiency and safety, Eaton provides an array of products, from automation controls and wiring devices, across five industry segments. It also manufactures components for the vehicle and aerospace sectors, and sells clutches and brakes under the Airflex brand. The company has a worldwide reach, and came into its current being following the acquisition of
Eaton organizes its business into five primary segments: Electrical Products, Electrical Systems & Services, Hydraulics, Aerospace and Vehicle. The two electrical segments together pull in about 60% of sales, with the remainder spread among the other three segments.
The Electrical Products segment specializes in electrical and industrial components, power supply and circuit protection, and lighting products. Electrical Systems & Services focuses on the distribution and security of power distribution. Hydraulics makes connectors, filters, hoses, motors, pumps, and valves, as well as electronics and software for mobile and industrial applications.
The Vehicle segment caters for original equipment manufacturers and aftermarket customers of trucks, cars and agricultural equipment through the manufacture of drivetrain systems and performance-improving components. Lastly, the Aerospace segment designs and manufactures components that power cockpit interfaces, engines, fuel systems, hydraulic systems, and motion controls for commercial and military aircraft.
Eaton sells products and services to customers in more than 175 countries, and has employees in more than 60. The US is Eaton's biggest market at over 50% of total sales; Europe pulls in just over 20% of revenue. Canada, Latin America and the Asia-Pacific region make up the remainder.
Sales and Marketing
In the Electrical and Electrical Services segments, sales are made directly to original equipment manufacturers, utilities, and certain other end users, as well as through distributors, resellers, and manufacturers' representatives. In Hydraulics and Aerospace, products are sold and serviced through a variety of channels.
A faltering global economy and shrinking marketplace hit Eaton's revenue hard in 2015: total sales shrank 7.5% to $20.9 billion. All five segments saw sales fall, with the biggest losses coming in Hydraulics and Electrical Systems and Services, which both fell by around $0.5 billion. As the smaller segment Hydraulics saw the more dramatic percentage fall, of 17%, which comprised a 10% decrease in organic revenue with a further 7% due to negative currency translation. Weakness in the oil and gas markets was the main factor in Electrical Systems' poor performance. Sales also dropped across Eaton's five main geographies, with losses concentrated in Europe. Despite the weakness in sales, net income actually rose in 2015 on prior year to $1.9 billion, but this is largely explained by a costly litigation settlement that hit the bottom line in 2014.
Cash flow from operations followed in the footsteps of net income, dipping a bit in 2014, but rebounded about 25% in 2015 to $2.4 billion.
The brightest point was in Aerospace, which recorded organic growth of 1% for the year because of growth in commercial and military aftermarkets, although this growth was dragged negative by unfavorable currency movement.
Eaton's primary concern is navigating the difficult market conditions that have caused a slump in profits, and to that end in 2015 announced a three-year, $400 million restructuring program to counter headwinds and reduce its cost structure. This involved workforce reductions at plants in Kansas and Ohio, and the closure of its Aurora, Ohio plant; most of the job losses were in the struggling Hydraulics segment.
In 2014, Eaton sold its Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses to
Mergers and Acquisitions
Activity on the once-frenzied acquisitions front has slowed given tough economic conditions. Eaton made two small acquisitions in 2015, of Ephesus Lighting and Oxalis Group, which recorded sales of $23 million and $9 million respectively over the past twelve months.
23555 EUCLID AVE
Cleveland, OH 44117-1703
Phone: 1 (216) 523-4205
Employer Type: Privately Owned
Director: Vincent Cimino
Division Operational Excellence Leader: James Lenhoff
Principal Engineer: Peter Theisen
Employees (This Location): 433
Employees (All Locations): 736