Eaton Selects Mexico Manufacturing Site

Autoparts Report, Feb 14, 2000

Eaton Corporation's Truck Components Operations said that it will build a new transmission production facility in Mexico. The transmissions are for Class 8 trucks for the North American market.

The company said for has selected a site at the Tres Naciones Industrial Park in San Luis Potosi, Mexico, as the location for a new manufacturing plant. The new facility will have 350,000 square feet and will cost more than $100 million, it said. "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 said its 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, the company said.

Construction will begin before April, with initial production slated for the first quarter of 2001, the company said. The plant will be built in two phases - first with assembly capability, then with full manufacturing capabilities.

Eaton said its Fuller 13- and 18-speed transmissions will be built at the new plant as demand for Eaton's 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."