According to Rodney O'Neal, president of Delphi's Safety, Thermal & Electrical Architecture sector and executive vice president, the acquisition is expected to be financially accretive in its first full year of ownership and positions the company to profitably grow its switch business sales in automotive and other market segments. The acquisition also diversifies Delphi's customer base, significantly strengthens its product portfolio and further shifts its manufacturing and engineering footprint toward high tech electrical products.

"Uniting Eaton's extensive switch portfolio -- including its leading position in mechatronic devices -- and solid book of business with Delphi's strong systems integration capabilities, prepares us to gain switch market share and offer new product solutions to our customers," states O'Neal. Subject to government and regulatory approvals, and other conditions, Delphi and Eaton expect to complete the transaction at the end of the first quarter.

Switch Business Growth & Customer Diversification Delphi estimates the global automotive switch market is currently $3.8 billion, and based on available industry data, Delphi is forecasting the market to exceed $7 billion by 2010. Eaton's automotive switch sales totaled approximately $320 million in 2000.

"This transaction will position Delphi among the top three automotive switch companies in a market that is forecast to have solid growth rates," offers James A. Spencer, Delphi vice president and president, Delphi Packard Electric Systems.

Primary customers of the VS/ED include DaimlerChrysler, Ford, General Motors, PSA, BMW, Rover and VW Group. Stronger Switch Portfolio VS/ED applications include switches for steering column systems, instrument panels, consoles, overhead systems, lighting centers, electronic controllers, door systems and hidden switches. VS/ED is a market leader in mechatronic switches, or smart switches, used in complex electromechanical applications such as power-assisted windows, remote keyless entry and other features. The newly combined portfolio will enable Delphi to offer customers new solutions in modular cockpits, doors and overhead systems.

The transaction complements Delphi's previous switch partnerships and acquisitions. Ventures that have added capability to Delphi's switch portfolio include the 1996 purchase of Merit GmbH & Co.'s switch business in Europe and a 1998 joint venture with Daesung Electric in South Korea. Delphi also purchased a minority equity stake and signed a licensing agreement with Duraswitch Industries Inc. last year, that provides Delphi a platform to apply its exclusive license of Duraswitch technology in the automotive industry. In February, Delphi earned a contract with National Seating to provide switches for a future heavy-duty truck seat, its first application using Duraswitch technology.

"The combination of our switch operations with VS/ED is very positive for Delphi and will enable us to continue to offer superior customer and sales support, as well as a very strong presence in the global automotive switch industry," explains Spencer. "Leveraging the combined engineering expertise strengthens our overall switch capability and positions us well for additional growth in both automotive and new markets, such as consumer goods, computers and recreational vehicles."

"VS/ED has bright, dedicated people and we look forward to them joining the Delphi team," concludes spencer.

Link for more info: www.delphiauto.com