Eaton Corporation Wins $250 Million, 20-Year Aerospace Contract for World's Largest Airship.

Business Editors

CLEVELAND--(BUSINESS WIRE)--May 16, 2001

Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) said today its Aerospace business unit has signed a contractual agreement with CargoLifter Development GmbH of Berlin/Brand, Germany to provide the hydraulic power generation and distribution systems for the CargoLifter CL160 airship. The CL160 will be the largest lighter-than-air cargo airship in the world, and is designed to transport extremely large and heavy equipment and cargo containers. The program represents a revenue potential for Eaton of approximately $250 million over the next 20 years.

Eaton has been selected to design, develop and integrate the hydraulic power generation system to power the blowers for the ballonets of the lighter-than-air gas management system, the winches for the cargo loading system and the flight controls. Eaton will also design and manufacture the entire hydraulic fluid power distribution network that will provide total fluid conveyance for the hydraulic power generation system.

The Eaton designed 4000 psi hydraulic system will be powered by eight Vickers brand main engine driven pumps and six Vickers brand AC motor pumps. The main hydraulic system will provide up to 1400 kilowatts of power to 16 speed controlled blower motors, four to eight winch motors and eight flight control actuators, as well as several auxiliary power functions.

Classified as a semi-rigid airship, as opposed to a blimp or dirigible, the CargoLifter's exterior structure is supported by an inner "bladder", or ballonet, which maintains the shape and altitude of the airship by increasing or decreasing air pressure.

Current plans call for full production of these airships to take place in Brand, Germany and New Bern, North Carolina. Assembly of the first CargoLifter airship prototype will take place at the world's largest lighter-than-air airship hangar facility near Berlin and is currently scheduled for completion by the fourth quarter of 2003. At full production, CargoLifter will produce a total of eight airships per year.

Eaton's Aerospace business is a leading supplier of hydraulic and electro-hydraulic pumps and generator products; power transfer units; integrated fluid power systems; fluid and fuel conveyance products and systems; electric motors; electromechanical actuator and flight control products; nose wheel steering systems; integrated control systems; cockpit controls and displays; power and load management sub-systems; pressure sensors and fluid debris monitoring products and systems. Eaton's Aerospace business serves commercial and military aviation, aerospace, military weapons, marine and off-road markets worldwide.

Eaton Corporation is a global $8 billion diversified industrial manufacturer that is a leader in fluid power systems; electrical power quality, distribution and control; automotive engine air management and fuel economy; and intelligent truck systems for fuel economy and safety. Eaton's 55,000 employees work in 29 countries on six continents. For more information, visit www.eaton.com

This news release contains a forward-looking statement concerning the potential for significant future CargoLifter CL 160 airship business. That statement should be used with caution. It is subject to various risks and uncertainties, some of which are outside the control of the company. Important factors, which could cause actual results to differ materially from those indicated by the forward-looking statement, include continued funding of the program over the 20-year period of the contract. We do not assume any obligation to update this forward-looking statement.