Eaton Signs Exclusive Partnership Agreement With China's Largest Independent Axle Manufacturer

    SOUTHFIELD, Mich.--April 26, 2002--Diversified industrial manufacturer Eaton Corporation today announced that it has signed an exclusive distributorship agreement with Dandong Shuguang Axle Co. Ltd. (Shanghai Stock Exchange:600303). This partnership establishes a structure for Eaton mechanical locking differentials to be sold as part of Dandong Shuguang Axle assemblies within the Peoples Republic of China.
    The Eaton mechanical locking differential provides vehicles equipped with Shuguang axles ultimate traction and mobility. Unlike traditional open or limited slip differentials, Eaton's mechanical locking differential automatically senses wheel slip and completely locks the axle to transfer 100% of torque to the wheel with low traction, and then automatically unlocks the axle. This innovative Eaton technology has been successfully implemented on SUVs, pickup trucks, vans and station wagons in North America and Europe. Eaton is the global locking differential leader, producing over 1.2 million locking differentials annually.
    Jake Hooks, Eaton Torque Control Products Division's vice president and general manager, explained the importance of this partnership: "Eaton Torque Control Products is pleased to enter into the agreement with Shuguang Axle. We expect this business relationship to significantly expand the Chinese market for traction modifying differentials." Li Jin Dian, chairman of the board and president of Dandong Shuguang Axle commented, "The incorporation of Eaton's mechanical locking differentials into Shuguang's axles introduces a whole new line of axle products into China's rapidly growing SUV market. We are very excited about the cooperation between Shuguang Axle Company and Eaton Corporation, which we anticipate will expand into other areas in the future and prove to be mutually beneficial."
    Shuguang Axle Company is the largest independent axle manufacturer in China and one of the few publicly traded companies in the Chinese automotive sector. It designs, manufactures and markets axle assemblies and other driveline components. Its products are widely used in the fast growing SUV, van, and pickup truck markets. For more information about Dandong Shuguang Axle Co. Ltd, visit www.chinasgaxle.com.
    Eaton has been focusing its automotive strategy and resources on fuel economy, safety and environmental impact. Other examples include advanced gasoline vapor controls, common rail Diesel fuel controls, power on demand variable valve actuation, and ELOCKER(TM) electronic locking differentials. For more information about Eaton automotive products, visit www.automotive.eaton.com.
    Eaton Corporation is a global $7.3 billion diversified industrial manufacturer that is a leader in fluid power systems; electrical power quality, distribution and control; automotive engine air management and fuel economy; and intelligent truck systems for fuel economy and safety. Eaton has 48,000 employees and sells products in more than 50 countries. For more information, visit www.eaton.com.