Eaton Plans Joint Venture with Changzhou Senstar Automobile Air Conditioner Co. Ltd. in China

CLEVELAND--Jan. 6, 2004--Diversified industrial manufacturer Eaton Corporation announced today it has agreed to form a joint venture with Changzhou Senstar Automobile Air Conditioner Co. Ltd. in China to produce automotive air conditioning hose and tube assemblies and power steering hose and tube assemblies in Shanghai for Volkswagen's China operations. Terms were not disclosed.

The joint venture will be called Eaton Senstar Automotive Fluid Connector (Shanghai) Co., Ltd. Eaton will have 55 percent ownership of the joint venture. The joint venture is expected to be established early this year following regulatory approval. Plans are for production to be located in Eaton's existing truck transmission and hydraulics facility in Shanghai's Waigaoqiao Free Trade Zone.

Senstar is a leading supplier of air conditioning hose and tube assemblies and power steering hose and tube assemblies in China to automobile manufacturers and system suppliers. It is owned by Shanghai Volkswagen Coordinated Development Co. Ltd., Changzhou Xingda Automobile Fitting Co. Ltd. and Shanghai Yitong Machinery Industrial Co. Ltd.

"This joint venture effectively combines the expertise of Senstar and Eaton and builds on the strong customer relationships that both companies have with Volkswagen," said Craig Arnold, Eaton senior vice president and group executive for the fluid power business. "There is great potential for both companies to grow in this expanding automotive market."

"Senstar is pleased to join in this partnership with Eaton. The joint venture will better serve Volkswagen in China," said Xin Changbao, board chairman and president of Senstar.

Eaton is a global diversified industrial manufacturer with 2002 sales of $7.2 billion that is a leader in fluid power systems; electrical power quality, distribution and control; automotive engine air management and fuel economy; and intelligent systems for fuel economy and safety in trucks. Eaton has 51,000 employees and sells products in more than 50 countries. For more information, visit www.eaton.com.

Senstar is a diversified automotive components manufacturer with 2003 sales of 200 million RMB (renminbi) that is a leader in the Chinese market of air conditioning hose and pipe assemblies; power steering hose and pipe assemblies; pressure switch and fuel filler pipe. Senstar sells automotive components to more than 37 vehicle makers and system suppliers in eight countries. For more information visit www.chinasenstar.com