CHICAGO — Engine supplier Eaton Corp.'s top executive strongly denied a report that the company is considering a sale of its automotive business.
"We are not, and have not been, in the process of discussions to sell our automotive business," Eaton Chairman and CEO Alexander Cutler said recently at the Deutsche Bank Global Industrials and Basic Materials Conference in Chicago.
On June 10, Bloomberg reported that Eaton was "weighing" a sale of its auto parts business to focus on its growing power and lighting operations, citing people with knowledge of the matter. Two sources told Bloomberg that managers at Eaton were in private talks about searching for a buyer.
Sources told Bloomberg that Eaton predicted that the automotive business would be an easy sell because of the unit's potential for growth. They said strong U.S. light-vehicle sales were also an incentive to consider selling off the business.
Last November, Eaton acquired Cooper Industries P.L.C., an electrical component manufacturer, for $13 billion. Since then, Culter said he has been frequently asked whether Eaton is leaving the auto industry.
"I've answered this question repeatedly since we did the acquisition of Cooper," Cutler said at the conference. "Our vehicle business is a very important part of Eaton. It is a very strong franchise."
Cutler also said Eaton's automotive segment is a lucrative part of the company's operations. Bloomberg, in its report, said the unit has a potential value of $1 billion.
Eaton's automotive business includes plastic and rubber under-the-hood parts.