Document oMeqwGBmYVQQzaLjmMjXkvxnR

Ihm Hornes. /fit. and \t! Kunttn\td. mscnddc w/ir piston pumps at Eaton s plum in Huh hnt\on. Kansas. The pumps un- aittail components in hulmstatu trimsmissiims that propel such products u.\ sku! .steer loaders, industrial sweepers and snubbers. nnnmen ial lawn nnnscfs and other e<puJiUCnt requiring fitnu > HO horsepower MARKET LEADERSHIP Operational excellence in today's fiercely competitive global arena demands market leadership that permits the economies of scale, product breadth and command of strategic imperatives to compete effectively. By 1993. all but one of Eaton's businesses had achieved market leadership. The one exception the industrial control and power distribution business marketed under the Cutler-Hammer name overcame that hurdle in 1994 with the $1 billion acquisition of Westinghouse product lines (dis cussed more fully under "Growth through Acquisitions" on pages 16 through 19). Today. Cutler-Hammer, with nearly $1.5 billion in sales, has the size and product offerings to complete on a global basis. Market leadership means that certain costs, such as product and market development, can be spread over larger sales to improve profit margins. It means better prices from suppliers through larger vol ume purchases. It means having a greater ability to build strategi cally for the future despite the Eaton's return on common equity in 1994 was 22.8 percent, only the third time since 1950 that this figure has risen above 20 percent. Over the past two years, net cash provided by Eaton's operating activities approached $1 billion. These funds are funneled into activities that sustain and build market leadership. Boosting Factory Efficiency Over the past 10 years, Eaton has invested more than $1.8 billion in capital improvements, including nearly $270 million in 1994. Much of this amount has been devoted to increasing operating efficiency at the company's 150 factories around the world. As demand for our prod ucts has surged since 1991, invest ments in modernization have paid off handsomely. By the end of 1994, Eaton plants hud earned more than 800 customer quality citations and certifications. Nearly 40 percent of Eaton's plants I i H. ,I vagaries of the marketplace. Each of Eaton's businesses now enjoys these substantial advantages. i.aton U'hl Phic { ^ /7ft kt i *i ori , f,t\t t\ ,,,i thr design and tuannta* hoc >>{ in m t,,, , tools luitun <1,01111,n tun s no;, iluio _V/ mil hoo i t a,,.! v,.f,, * have already qualified for the inter national quality standard. ISO 9000. and many others will do so in 1995. In 1994, Eaton's plant in Salisbury. Maryland, winch manufactures hydraulic-magnetic circuit breaker' was cited I'm us crucial support w hen a division of AT&T won both the Malcolm Baldrige Award, the U.S national quality award, and the Denting Pri/e. Japan's national quality award. T