Power management company Eaton (NYSE:ETN) and power leader Cummins Inc. (NYSE:CMI) will joint venture on automated transmissions for heavy-duty and medium-duty commercial vehicles — to be called Eaton Cummins Automated Transmission Technologies.
Cummins and Eaton will each own 50 percent of the new joint venture.
“Customers are focused on powertrain solutions that provide the best combination of technology, performance and quality,” said Craig Arnold, Eaton chairman and chief executive officer. “Our joint venture with Cummins will leverage the technical strengths and experience of two industry leaders with long histories and deep industry expertise to provide superior automated transmission technology for our global customers.”
“Our growth strategy includes expanding our product offerings and extending our global footprint by becoming the world’s leading powertrain supplier,” said Tom Linebarger, chairman and CEO, Cummins Inc. “Our JV with Eaton will deliver the most advanced automated transmissions and develop an integrated powertrain and service network that supports our customers like never before. Just as we’ve done for the past 100 years, we will use our experience in partnerships and technological expertise to ensure our customers’ success.”
The JV is designed to provide customers with advanced transmission technologies that deliver best-in-class fuel efficiency, performance and uptime.
In terms of specifics, the companies note that the “joint venture will design, assemble, sell and support all future medium-duty and heavy-duty automated transmissions for the commercial vehicle market.”
Eaton’s current medium-duty automated transmission, Procision®, and next generation heavy-duty automated transmissions, will be part of the joint venture. In addition, the joint venture will market, sell, and support Eaton’s current generation of automated heavy-duty transmissions to OEM customers in North America.
Under the terms of the agreement, Eaton will receive $600 million in cash from Cummins for 50 percent interest in the joint venture.