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This Eaton manufacturing facility in Changzhou, China, produces
vacuum circuit breakers and other electrical switchgear components.
we are not wholly dependent on the Big Three. Take the Japanese What do you see as the biggest opportunity for improve-
car companies, who now have a large presence in North America: ment for Eaton’s operations in China?
we have strategically developed business with them to diversify SH: Resources, people. When you try and hire people here, they
our customer base. Eaton’s products represent technologies that tend to be very narrow in their capabilities. As a leader, I see this
help auto manufacturers improve fuel economy and reduce emis- as an opportunity for improvement. The environment here has tra-
sions. Our valve actuation technology helps auto OEM’s deactivate ditionally been very functionally focused, and that’s a little bit of a
cylinders and our super chargers can help make a smaller engine risk for us. However, there is more available talent in the market
deliver the same performance as a larger displacement engine. due to the downturn. But, if I look at certain functional areas such
We are working with a number of local automotive OEM’s using as environmental health and safety, it is difficult to find those types
these technologies. of individuals, because the field is relatively new and developing.
HR will become a huge issue again once the recovery hits, and
I imagine you still have possibilities with Chinese automakers? that’s why Eaton is actively developing organizational capability
SH: Yes, we supply to auto manufacturers here in China, and there this year.
is still a lot of potential. More so for the valve business than the
supercharger business, because the chargers are for the high end Are you seeing any industry wide progress on CSR issues
segment of the market, which really are not being manufactured in the region?
here in China in any mass way. But they will come. SH: Absolutely. Sustainability is probably the word that is used
more than any other today. Two years ago, nobody really under-
Do you see quality in China improving? stood what sustainability was, but key suppliers that we work with
Over the last five years we have seen a significant improvement in are now actively pursuing sustainability. They are concerned about
the quality of our suppliers, and that is probably reflective of a lot the environment, concerned about energy, water waste etc. They
of the tools, processes, and techniques that we brought here to are making sure that they have very efficient health and safety
our suppliers. The suppliers are realizing that this is not a cheap standards in place.
and cheerful market anymore: they have to have the accredita-
tions and manufacturing capability. Many years ago, you would Do you see any signs of an economic rebound?
come to China and people would tell you they were ISO approved - SH: Maybe to some extent some stabilization, but I would not say
they may have had the certificate on the wall - but they really didn’t at this point that we have seen a huge pickup in demand. We are
have the capability. In a global market, they realize that they have predicting that things will pick up later this year and into 2010,
to have the systems, processes and tools in place to guarantee but we do not expect to see any more of a slide downwards from
product quality. where we are today. JULY/AUGUST 2009 15
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