Aircraft

From Aeroquip hoses to Vickers pumps, the long list of brand names under which Eaton trades illustrates how acquiring specialist engineering companies and bundling their technologies has been a key part of its strategy. It has led to rapid growth for the Cleveland-headquartered firm in aerospace and its other markets: automotive, road transport, industrial machines and building equipment.

Eaton defines itself as a "power" business, with a portfolio ranging from electrical controls, powertrains and transmissions to hydraulics and fuel systems. Its aerospace sales of $4.48 billion represent roughly a third of its business and were up an eighth on the previous year, ranking it 22nd in the Top 100, the same as 2007.

While most of its other sectors are "very short cycle businesses, where any downturn is steep and felt early", the importance of aerospace is its "slower, longer and late cycle", says aerospace business president Brad Morton.

© Eaton Aerospace

Eaton's aerospace acquisition strategy - last year it added Argo-Tech's fuel pumps business to its 2005 takeover of Cobham's FR HiTemp division - have placed it firmly as a highly integrated tier one supplier to airframers and engine makers, with a strong aftermarket business and a large footprint outside its domestic market, says Morton.

As with most successful tier one manufacturers, being able to offer systems integration rather than simply a range of products and technologies has been key to Eaton winning extensive packages on aircraft such as the Airbus A380 and Boeing 787, its biggest aerospace deal yet (it supplies the fuel system and air distribution technology as well as being "heavily involved with the engine").

Morton maintains: "Cus­tomers are no longer buying components. Boeing doesn't say: 'I'll buy this connector and valve'. They say: 'Design me a system that will be capable of doing this'."

However, where he claims Eaton differs from rivals is in its engineering capabilities and vertical integration. "An excellence in components gives you the pedigree to move into system integration," he says. "A lot of companies have moved into system integration without having the detailed knowledge of components."

Turning around an operation - FR HiTemp - that "might have been heading towards commoditisation" typifies what Eaton is prepared to do with its acquisitions. "We have invested $18 million in that business since we bought it," says Morton, adding that Argo-Tech has created a "beautiful synergy".