PACCAR and Eaton Announce Heavy-Duty Hybrid Truck Technology Agreement

August 22, 2007, Bellevue, Washington – PACCAR and Eaton Corporation announced today that they have entered into an agreement to jointly develop proprietary hybrid technology for heavy-duty commercial vehicles in North America.  The innovative new products will be introduced exclusively in Kenworth and Peterbilt trucks in the North American market, targeted for initial production by the end of 2009.

“PACCAR is a leader in the integration of diesel-electric hybrid technology.  The agreement with Eaton, a leader in the design of hybrid power systems for commercial trucks, further reinforces PACCAR’s commitment to a leadership role in the development of fuel-efficient, environmentally friendly technology,” said Tom Plimpton, PACCAR president.  “PACCAR and Eaton developed the technology utilized in previously announced Kenworth, Peterbilt and DAF medium-duty hybrid trucks that will be launched next year.  This heavy-duty hybrid technology agreement is a natural extension to the existing partnership.”

“We are pleased to partner with PACCAR to produce a solution for heavy-duty hybrid trucks that delivers excellent fuel economy, idle reduction and improved operating performance,” commented James E. Sweetnam, Eaton senior vice president and president – Truck Group.  “During the past five years, we’ve clearly demonstrated our leadership in the hybrid marketplace with the success of our patented hybrid power system in the medium-duty marketplace.  We’re excited to be working with PACCAR on this groundbreaking initiative.”

Eaton’s heavy-duty hybrid electric power system will be built using an automated manual transmission with a parallel-type “direct” hybrid system, incorporating an electric motor/generator located between the output of an automated clutch and the input to a Fuller® UltraShift® transmission.  One feature of this system will be its ability to recover energy normally lost during braking and store the energy in batteries.  When electric torque is blended with engine torque, this stored energy is used to improve vehicle performance, operate the engine in a more fuel-efficient range for a given speed or operate with electric power only.  Fleets using the PACCAR-Eaton heavy-duty hybrid system will experience reduced fuel consumption both while driving and at the truck stop.

In addition to the hybrid diesel-electric solutions for medium- and heavy-duty vehicles, PACCAR recently introduced Kenworth CleanPower™ and Peterbilt Comfort Class™.  “These factory-installed climate control systems provide heating and cooling, plus 110-volt ‘hotel load’ power for up to ten hours without the need to operate the engine, thereby reducing emissions and improving fuel economy by up to eight percent,” said Dan Sobic, PACCAR senior vice president.

In June 2007, the Environmental Protection Agency (EPA) recognized PACCAR’s commitment to producing industry-leading aerodynamic and fuel-efficient vehicles by awarding Kenworth’s T660 and T2000 and Peterbilt’s 386 and 387 models with the SmartWay® designation.  SmartWay® compliant vehicles offer customers a 10-20 percent fuel savings, while also lowering greenhouse gas emissions by significantly reducing NOx and particulate matter.

PACCAR is a global technology leader in the design, manufacture and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates.  It also provides financial services and information technology and distributes truck parts related to its principal business.  PACCAR shares are listed on NASDAQ Global Select Market, symbol PCAR, and its homepage can be found at www.paccar.com.

Eaton Corporation (NYSE:ETN) is a diversified industrial manufacturer with 2006 sales of $12.4 billion.  Eaton is a global leader in electrical systems and components for power quality, distribution and control; fluid power systems and services for industrial, mobile and aircraft equipment; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety.  Eaton has 62,000 employees and sells products to customers in more than 125 countries.  For more information, visit www.eaton.com.

Peterbilt’s diesel-electric hybrid model 386