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Eaton to shed another unit
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August 29, 2000: 11:32 a.m. ET
Manufacturer puts switch/electronics unit, with $330M sales, on the block
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NEW YORK (CNNfn) - Eaton Corp. intends to sell its vehicle switch/electronics business line to concentrate on its automotive subsystem unit, where the manufacturing company holds a more dominant market share.
The divestiture plan, announced Tuesday, is part of an ongoing internal reorganization to refocus the Cleveland-based company only on operations in which it will rank as a market leader.
"This decision was a difficult, but necessary one for us," Eaton Chairman and CEO Alexander Cutler said. "The vehicle interior segment is rapidly consolidating in response to the industry-wide move toward integrated cockpit systems solutions. As a niche player, we are not in a position to lead this consolidation."
The company's vehicle switch unit, based in Downers Grove, Ill., sells its products to nearly every major automobile manufacturer in North America, South America and Europe. The company employs more than 4,000 people in eight plant locations within those regions. Its two largest plants are based in Mexico.
 The unit produces a wide range of mechanical and electrical parts, including control modules for windows and doors, panel switches, lighting centers, and security switches. The division posted revenue of $330 million last year and, according to company officials, is profitable.
Shedding the unit will leave Eaton's automotive group to concentrate primarily on powertrain and specialized sensor and actuator areas, where "we have significant, synergistic growth programs based on our strong market presence and technological strength," Cutler said.
Since merging with aerospace and automotive parts maker Aeroquip-Vickers last year, Eaton has slowly been shedding "non-core" divisions. Eaton has sold six units since that merger and spun-off a minority stake in Axcelis Technologies, which makes equipment for semiconductor manufacturers.
Eaton shares fell 50 cents to $67 in late morning trading Tuesday. 
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Eaton Corp.
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