Duraswitch Exclusive License Complements Delphi's Eaton Acquisition

    PHOENIX--March 13, 2001--Delphi purchased an exclusive license for Duraswitch technology in April 2000 and yesterday announced its intent to purchase the Vehicle Switch/Electronics Division (VS/ED) of Eaton Corp. for $300 million.
    Delphi also purchased approximately 18 percent of Duraswitch stock from the company in June 2000 and Carl G. Rausch, Delphi Packard Electric Systems director marketing, planning and business development joined the Duraswitch board in July 2000.
    Delphi estimates the global automotive switch market is currently $3.8 billion, and based on available industry data, Delphi is forecasting the market to exceed $7 billion by 2010. Eaton's automotive switch sales totaled approximately $320 million in 2000.
    "We are pleased that Delphi has furthered their commitment to be a major player in the global switch market and we look forward to working with the dedicated people of VS/ED including their more than 200 engineers," said Bob Brilon, Duraswitch president.
    "Delphi's vision to become a Duraswitch strategic partner through licensing and equity ownership combined with their ability to grow through acquisitions such as the VS/ED gives them the major elements to be successful in the switch market," said Terry Dunlap, Duraswitch chief executive officer.
    As quoted in Delphi's press release on Monday:
    "This transaction will position Delphi among the top three automotive switch companies in a market that is forecast to have solid growth rates," said James A. Spencer, Delphi vice president and president Delphi Packard Electric Systems. Primary customers of the VS/ED include DaimlerChrysler, Ford, GM, PSA, BMW, Rover and VW Group.
    "The combination of our switch operations with VS/ED is very positive for Delphi and will enable us to continue to offer superior customer and sales support, as well as a very strong presence in the global automotive switch industry," said Spencer. "Leveraging the combined engineering expertise strengthens our overall switch capability and positions us well for additional growth in both automotive and new markets, such as consumer goods, computers and recreational vehicles."
    "Uniting Eaton's extensive switch portfolio -- including its leading position in mechatronic devices -- and solid book of business with Delphi's strong systems integration capabilities, prepares us to gain switch market share and offer new product solutions to our customers," said Rodney O'Neal, president of Delphi's Safety, Thermal & Electrical Architecture sector and executive vice president.
    In February, Delphi earned a contract with National Seating to provide switches for a future heavy-duty truck seat, its first application using Duraswitch technology. Delphi's license agreement with Duraswitch contains a minimum royalty payment for the auto industry of $12 million over the initial seven-year term.