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Eaton dedicated to saving resources, money, with sustainable business practices
Thursday, December 17, 2009

On Earth Day last April, Eaton Corp. banned Styrofoam cups and plates from the workplace cafeteria in Moon. Its 750 employees each received a ceramic mug for coffee, and they got cold beverages in clear, compostable cups. Their meals were served on plates and bowls that are 100 percent biodegradable.

The switch to environmentally friendly table service wasn't simply an Earth Day gesture. Eaton, long recognized as a traditional industrial company that makes electrical and power systems, has a green theme running through its Moon facility and is shaping its strategy to capitalize on the demand for energy-saving products.


Eaton's local operations:

In Moon: Headquarters of Electrical Sector Americas Region, 750 employees

In Marshall: Engineering services, 100 employees

In Beaver: Circuit breakers manufacturing and testing, 350 employees

It holds up its Moon offices and labs - headquarters for the company's electrical group in the Americas - as a showcase of what it can provide for customers who want sustainability in the form of cost-savings and efficient lighting, heating, cooling and computer power.

Eaton last year completed a $24 million expansion of the facility in the Cherrington office center, off Route 60, and it earned a gold level certification for Leadership in Energy and Environmental Design (LEED).

Besides the green cafeteria, the 260,000-square-foot complex features ceiling lights that save energy by harvesting natural light, recycled carpet and vinyl flooring, and kitchen countertops made of recycled resin and glass.

The building's heating, cooling and computer systems can be adjusted for decreased usage when utility grids approach maximum capacity - such as during an August heat wave.

Eaton's custodial staff uses green cleaning supplies and works during the day to save on energy costs at night.

Scattered throughout the facility are signs and touch screens that explain the Eaton products and technology used to develop a sustainable work environment.

The company has realized energy savings of 30 percent since the building expansion was completed, said John White, director of energy management and sustainability solutions.

From his second-floor office, Jerry Whitaker, president of the Americas Region for the Electrical Sector, oversees a business that accounts for about $7.5 billion of Eaton's $15 billion in total revenues.

Based in Cleveland, Eaton gained a significant presence in the Pittsburgh region in 1994 when it acquired Westinghouse Electric Corp.'s distribution and control business.

After that purchase, it moved a large electrical controls business it already owned, Cutler-Hammer, from Milwaukee to Pittsburgh, combined it with the Westinghouse unit and created a headquarters for the electrical segment.

While Mr. Whitaker oversees the electrical business for North and South Americas, other regional headquarters are in Morges, Switzerland, and Shanghai, China.

Though Mr. Whitaker describes the company as having "a very strong Westinghouse heritage," its product line has diversified well beyond George Westinghouse's original circuit breakers.

It makes power sources for computers and data centers, and the engineering service unit designs systems such as energy-saving building technology. For the last decade or so, the business has been "very acquisitive," said Mr. Whitaker. Its acquisitions included companies in Europe and Asia to enhance its capabilities in power quality systems such as the batteries and software that provide the juice for computers to operate.

When the economy soured last year, Eaton already had experienced a downturn in what Mr. Whitaker calls its "early cycle" businesses such as residential power systems. Because home sales were declining before Wall Street imploded in 2008, that business has been "trending down" for about four years, he said.

But housing and another early cycle market, semiconductors for which Eaton supplies electric controls and equipment, are starting to show signs they have bottomed out and are gradually recovering, he said.

Meanwhile, such late-cycle businesses as commercial and industrial power distribution systems that stayed relatively healthy this year are now in decline, said Mr. Whitaker. While he's confident a hefty backlog in those markets can sustain Eaton through the recession, "it's a troubling trend. But we are not going through a major downturn in 2010. It will be another tough year, but we expect the backlog to stay strong ... and in 2011 I really expect the business to regain its footing and have traction."

Among the possibilities for injecting new revenues into the company: federal stimulus dollars that could translate to jobs for Eaton if municipalities use the money to make infrastructure improvements.

"We think that has some real opportunity for us next year," said Mr. Whitaker.

He also is optimistic that demand for more efficient utility grids and home energy systems will bring contracts because Eaton can supply engineering know-how as well as equipment.

Another future market is electric cars. Eaton is developing technology to power the vehicles and is collaborating with automakers and government agencies to determine options for how and where car owners can recharge their cars in between trips.

"It's a dynamic market," said Mr. Whitaker, "but very complex, and we're trying to make it as simple as possible."

While the recession halted mergers and acquisitions, that activity could surface again as soon as next year, though he declined to specify possible targets.

"I can't talk about them, but they are both domestic and international," he said.

To preserve cash through the downturn, Eaton stopped its 401(k) contribution match, eliminated merit raises and required employees to take unpaid leaves of one week per quarter.

The furloughs will cease next year, while the merit pay increases and 401(k) contributions will resume in July.

Those initiatives succeeded, Mr. Whitaker said. "We were focused on keeping the business vibrant ... and we limited the number of actions we had to take on [layoffs]."

Mr. Whitaker, 59, spent more than two decades at Westinghouse managing sales, marketing and operations at seven locations around the United States before landing here at the distribution and control business a year before Eaton bought it.

"Westinghouse had its faults, and we're all sorry Westinghouse disappeared," he said of the Pittsburgh-based conglomerate that sold off its industrial segments in the 1990s following a financial and credit crisis.

The parent company acquired broadcast network CBS and later took on the CBS name. One of the industrial units, Westinghouse Electric Co., which makes nuclear power reactors, is owned by Toshiba Corp., of Japan, and is based in Cranberry.

Despite the collapse that resulted in the sale of his former employer, Mr. Whitaker "was proud of working at Westinghouse." His group's transition into Eaton "was pretty smooth," he said. "I thought Eaton had a stronger culture" because of its emphasis on ethics, the way it treats employees and its commitment to community causes. In its 15 years in the Pittsburgh region, Eaton has aligned itself with charitable efforts including the United Way of Allegheny County, Holy Family Institute and Auberle, which assists at-risk children and families.

Mr. Whitaker also serves on the Allegheny Conference on Community Development and has served on the board of the Carnegie Science Center, where Eaton sponsors annual science achievement awards for teachers, entrepreneurs and researchers "because that's what Eaton is about: math and science."

A native of Long Island, N.Y., Mr. Whitaker joined Westinghouse after earning his bachelor's degree in electrical engineering from Syracuse University. He admitted to not being able to shed his technical roots despite having moved up the executive management ladder.

"I like to get into all the details of what we're developing. I like to see the numbers and the technology ,and get my hands on the manufacturing. But I grew up in marketing, so I characterize myself as a sales, marketing and people person. And that's what drives success: how you treat people and bringing the right people into the right jobs and letting them do their jobs. That's how you achieve excellence. And that's how you grow."

Joyce Gannon can be reached at jgannon@post-gazette.com or 412-263-1580.
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First published on December 17, 2009 at 12:00 am