The joint venture will design, assemble, sell and support all future medium-duty and heavy-duty automated transmissions for the commercial vehicle market.
Eaton and Cummins Inc. announced an agreement to form a joint venture aimed to develop and manufacture automated transmissions for heavy-duty and medium-duty commercial vehicles. The joint venture, named Eaton Cummins Automated Transmission Technologies, will begin in the third quarter and the transmissions will be made in San Luis Potosi, Mexico, where both companies operate production facilities.
Cummins and Eaton will each own 50% of the new joint venture. The global alliance will provide customers with transmission technologies and solutions to deliver fuel efficiency, performance and uptime while leveraging both Cummins’ and Eaton’s global service and support networks.
The joint venture will design, assemble, sell and support all future medium-duty and heavy-duty automated transmissions for the commercial vehicle market. Eaton’s current medium-duty automated transmission, Procision®, and next generation heavy-duty automated transmissions, will be part of the joint venture.
In addition, the joint venture will market, sell, and support Eaton’s current generation of automated heavy-duty transmissions to OEM customers in North America.
Eaton’s Vehicle Group will retain its global manual transmission business, global clutch business, current generation medium-duty and heavy-duty automated transmission business outside of North America, global aftermarket business, light-duty transmission business, agricultural transmission business, and global automotive business and associated product lines.
Under the terms of the agreement, Eaton will receive $600 million in cash from Cummins for 50% stake in the joint venture.
“Our growth strategy includes expanding our product offerings and extending our global footprint by becoming the world’s leading powertrain supplier,” Tom Linebarger, Cummins chairman and CEO, said in the news release.
“Our JV (joint venture) with Eaton will deliver the most advanced automated transmissions and develop an integrated powertrain and service network that supports our customers like never before,” Linebarger said.
Eaton provides a long history of transmission expertise while Cummins offers about a century of engine and component expertise, Cummins spokesman Jon Mills said.
Eaton, which has its headquarters in Dublin, Ireland, recorded sales of $19.7 billion in 2016. The company makes electrical, hydraulic and mechanical power products, including automated truck transmissions.
Eaton has manufacturing presence in Baja California, Chihuahua, Aguascalientes, Queretaro, Nuevo Leon, San Luis Potosi, Jalisco, Tamaulipas and the State of Mexico.
Cummins, a global company with headquarters in Columbus that makes diesel engines and power systems, had net sales of $17.5 billion in 2016.
Cummins operates manufacturing sites in Ciudad Juarez and San Luis Potosi.
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