Eaton to Supply Hybrid Power Systems to UPS for International and Freightliner Delivery Trucks

GALESBURG, Mich.--March 1, 2006--Diversified industrial manufacturer Eaton Corporation has been selected to provide hybrid power systems for a total of 50 step-van delivery vehicles made by International Truck and Engine and Freightliner Custom Chassis Corporation, to be purchased by UPS, the world's largest package delivery company.

UPS announced last month that the first of the 50 vehicles would be placed in Dallas in June 2006. UPS expects the vehicles to deliver up to a 35 percent improvement in fuel economy over its conventionally-powered vehicles, in addition to dramatic decreases in vehicle emissions.

Eaton's hybrid power system used in both the Freightliner and International chassis will employ an Eaton automated transmission, an integrated motor/generator, and advanced technology batteries. The Freightliner Custom Chassis truck will use a Mercedes-Benz MBE 904 4-cylinder diesel engine, and the International Truck and Engine vehicle will employ an International VT-275 6-cylinder diesel.

Jim Sweetnam, senior vice president and president - Truck Group, said, "Eaton is extremely pleased to be recognized as the leader in the commercialization of hybrid power for commercial vehicles. This order, combined with other significant orders in the delivery van segment and for public utility trucks, signals that hybrid power is ready for broader commercialization."

In September 2002, Eaton was awarded a $7.1 million contract to lead a project in the Advanced Heavy Hybrid Propulsion System (AHHPS) Program sponsored by the U.S. Department of Energy and its National Renewable Energy Laboratories (NREL). Through this program Eaton, in partnership with International Truck and Engine, integrated a heavy hybrid propulsion system for installation in a prototype UPS urban package delivery vehicle.

"UPS provided great support to Eaton and International Truck throughout the DOE/NREL project in terms of 'voice of the customer,'" said Scott Davis, senior chief engineer for special projects engineering for Eaton's Hybrid Power Systems business unit. "UPS conducted a three-month field trial of an International Truck with an Eaton prototype system, which provided invaluable driver feedback regarding the system operation and drivability. Those inputs were engineered into the production-intent system that will be running in these first 50 trucks."

Eaton will provide its hybrid power systems to Freightliner and International for installation in a standard production line process at the truck makers' plants. Unique software calibrations have been created for each chassis and engine configuration to ensure optimum drivability, performance and fuel efficiency.

"UPS has partnered with Eaton over the last five years to test hybrid drive train systems in real world settings," said Robert Hall, UPS's fleet environmental manager. "We are excited about the technology advancements Eaton and UPS have achieved through testing and look forward to seeing these next-generation hybrids perform for our fleet."

Sweetnam added, "The UPS business is another positive step toward achieving a critical volume of hybrid commercial vehicles that will provide a sustainable, commercially viable value proposition. The transition to that volume will continue to require tax credits and other incentives at the local, state and federal government level during the next three to four years. We're working diligently with fleets, truck makers, other Tier 1 suppliers and government officials to help make those incentives happen."

Eaton Corporation is a diversified industrial manufacturer with 2005 sales of $11.1 billion. Eaton is a global leader in electrical systems and components for power quality, distribution and control; fluid power systems and services for industrial, mobile and aircraft equipment; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. Eaton has 59,000 employees and sells products to customers in more than 125 countries. For more information, visit www.eaton.com.

This news release contains forward-looking statements concerning fuel economy, vehicle emissions, commercialization, drivability and performance. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company's control. Factors that could cause actual results to differ materially from those in the forward-looking statements include unanticipated changes in the markets for hybrid power vehicles, and unexpected technical difficulties. We do not assume any obligation to update these forward-looking statements.