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Home arrow Alliances and Joint Ventures arrow Eaton Corporation to step up presence in the aerospace sector in India
Eaton Corporation to step up presence in the aerospace sector in India Print E-mail
Written by Arjun   
Saturday, 19 November 2011
Bangalore: Diversified power management solution provider, Eaton Corporation, is looking to significantly enhance its presence in the aerospace sector in India. The company is looking to partner not only with suppliers but also potential partners around assembly, testing & maintenance.

"Eaton has been in India for a long time already; we are very comfortable doing business here. I see us forging strong relationships – whether they are special supplier relationships or whether they are potentially a JV with a customer. We will be open to those opportunities," said Einar Johnson, Vice President - Customer Solutions & Services, Aerospace Group, Eaton Corporation.

"We do not want to have a JV just for one platform; we want to align with the partner to service a global requirement. If we do a JV in India, I would bet that it is going to be around taking advantage of engineering resources here, low cost economy & labor intensive issues for assembly and testing. We are looking at component excellence - companies that build the components. That would be a good focus for us as we build the portfolio" he added.

"It is not about the revenue or the size, it is really about the fitment in our power management portfolio of products services and solutions," said Raja Kochar, Managing Director, Eaton India.

Eaton has a joint venture with Shanghai Aircraft Manufacturing Co. Ltd., a subsidiary of Commercial Aircraft Corporation of China (COMAC), to support COMAC C919 single-aisle commercial aircraft program. Of the joint ventures being formed to support the C919 program, the Eaton-SAMC joint venture is the first for the COMAC enterprise with a foreign company, as well as the first to receive a business license. The joint venture focuses on design, development, manufacturing and support of fuel and hydraulic conveyance systems.

"We are looking at bringing that business model to India and looking at partnering the airframe companies here as they start to develop commercial transports and work with them very closely," said Johnson.


"We currently source castings, turned machining products & complex parts; not just fasteners and bolts. With this offset program, the natural progression from here is to see how we can put all the different parts together to do the assemblies here. With the various parts we are sourcing here, it is feasible to do that," said Joe Zhou, President- Asia Pacific, Aerospace Group, Eaton Corporation.  He said that the value of components currently sourced from India was greater than China.

"The suppliers we have today are very good. But if you look at all the offset demand, that is much more than what is available today. The supply and demand do not match and it is going to be very challenging and much fun for all of us. We are going to be expanding the aerospace industrial groups in India very quickly- to meet this demand of the offset requirements. It will be very very challenging," said Einar Johnson.

"We think that the Eaton business systems help. We will have to invest and have people here, trained to make sure we have all the right procedures. It all comes down to quality management. There is far more demand than availability today in the industry in India," he added.

"We are not just looking at cheaper cost of manufacture; we are also looking at the fact that capacity is going to be growing very strongly in India with aerospace requirement expanding almost in double digits in some of the segments. We are going to need that excess capacity. In India, we see very good quality in the suppliers we are using today."

"In China, all suppliers are obliged to form JVs - we have a JV with COMAC. For more critical systems, forming a JV is mandatory in China. It is specified in the RFQ. For smaller systems & standard parts, it is encouraged but not compulsory," said Joe Zhou.

"The Indian Government definitely is very smart to develop the industry here, with purchase and offset. We will certainly support this," he said. "When we do business here in India , we will bring with us things around lean manufacturing, things around the quality system, power of leveraging, proven business systems & business approaches."

U.S. - India Bilateral Aviation Safety Agreement (BASA)
"The BASA agreement will make it easy to do business because it is not just Eaton sitting down with the Industry in India. The Government authorities want to oversee it. The mutual cooperation starting at the top makes it easier for us to work," said Johnson.

"We source parts from India that we supply to the US military and we still have to go through the paper work of export regulations. I think it is just clearer now and I think the approvals will be quicker. One of the things that the agreement was trying to do is to make it more efficient. Earlier on, it would take months to get a paper approved to just go and give a specification to a foreign supplier. Now I think that is going to be streamlined and more efficient. So it makes it easier. I think the range of approvals might be broader," he said.

"Instead of every little item having paperwork, we might be able to have a broader scheme now. The approval cycle in the government is going to be a lot quicker. The ease of business is encouraging, however, there is still going to be a process," added Johnson.

Defense Offsets

"We are in a very good position to fulfill defense offset requirements in India because of the presence of Eaton in India in known aerospace businesses. We are already procuring some material and equipment from India. We are going to be in a very good position to be successful on the offset & help Boeing & the others. We have a lot of specialized equipment on C17 Globemaster, P8, CH 47 & also Sikorsky helicopters," said Johnson. "The company has not yet finalized its investment plans, partly because of the dynamic requirement from the Government with respect to offsets. We need to very clearly understand all these requirements to make sure we don’t make any mistakes."

Pune Engineering Center

The company currently employs around 1000 engineers at its engineering center in Pune.

"A third of the engineers in the engineering center in Pune are involved in aerospace product development. We talk about design, development, testing and support. It is everything except manufacturing today," said Johnson. "We have 4 businesses: fuel, hydraulic, conveyance and electrical. We have dedicated engineers in Pune in all 4 businesses working with us. The number of engineers that we have in Pune is growing rapidly. They work on US military programs for us. We had to go through the process of getting approvals. They are working on the CH53K military program- it is the newest development program in the USA- the brand new huge 3 engine helicopter. So we use them not just for commercial work but also for US military work as well."

"We are using them more for development and testing although there are some products which they actually start with the design. They will do the whole- from the initial design to the analysis, testing and qualification. We started with several small products and it is getting bigger and bigger each year," he added.

Relationship with HAL, NAL, ADE ...

Speaking about the company's relationship with HAL, NAL and other Indian companies, Johnson said ",right now it is component based, where they give us the specs and we develop the components to meet their need. We see them shifting more towards looking at system solutions. As we do provide sub-system solutions with them we will be come much more a partner in the technology development and we look forward to that. What that means is our engineers in Bangalore working side by side with HAL, NAL. The company has a long experience with HAL, NAL, ADE etc. We are trying to look at their needs - were do they need us to focus : is it weight , power efficiency , different pressures. It is really understanding where their technology investments are being made so that we can compliment them with solutions to their toughest challenges. It really starts with working with the prime aircraft manufacturer.  For next generation aircraft development project in the U.S., they have come out and said that they want 50 % more fuel efficiency, 50% less carbon footprint. We need to understand that."

The company has bagged all the sole-source business from the recently announced commercial aircraft orders by GoAir and Indigo.

"We are here because we have a strategic focus on India and we see India as one of the most important regions for Eaton in the world. India’s growth capability and especially the growth of relationships, partnerships, is perhaps the most significant in the world. We recognize this and we hope that the Indian customers and partners also recognize it and see the value that it will bring," said Einar Johnson.

The company is celebrating its 100th anniversary in 2011. Eaton, with 2010 sales of $13.7 billion, generates 55 percent of it's revenues outside the United States. It generated revenues of $3.4 billion from emerging markets in 2010. The company expects it's India sales to triple to $500 million by 2015.

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