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Business as Usual Talks to Eaton Electrical Sector President Brian Brickhouse

Business as Usual

Eaton’s mission is to improve the quality of life and the environment through the use of power management technologies and services.

We welcome Eaton's Brian Brickhouse, President of the Americas Region, Electrical Sector, to overview Eaton’s electrical business across North, South and Central America. He oversees overall sales, manufacturing operations, marketing, innovation and product development in those regions. 

Eaton provides sustainable solutions that manage electrical, hydraulic and mechanical power – more safely, more efficiently and more reliably. Eaton’s 2020 revenues were $17.9 billion, and it sells products to customers in more than 175 countries.

 

 

Transcription:

Good afternoon, everyone. This is Audrey Russo, President and CEO of the Pittsburgh Technology Council as well as 40 by 80. That's our wholly owned subsidiary of our nonprofit, which is the longitude and latitude of Pittsburgh. So I'm thrilled to have in such a timely, timely day, have Brian Brickhouse, I'm going to introduce him formally in a moment. But let me just get some of the housekeeping out of the way. And some of the appreciation for the sponsor that we've had for all year, I mean, I think it's probably 14 or 15 months now. And that's Huntington bank, they have been our partners right from the onset, if you don't know them, they're actively engaged in our community, they have been incredible. During COVID. They've been incredible before COVID. But they are just actively engaged and making sure that Southwestern Pennsylvania is an amazing place for technology and innovation companies and their ideas to proliferate. So if you don't know them, get to know them. And if you want to know them, you just need to reach out to anyone here. So we deeply appreciate their belief in us and all the experiments that we've run. So we've been doing this show for 15 months each and every day, hard to believe, and we have a packed may coming up. And we just get a chance to talk to some of the coolest and smartest people around who are they might be in Pittsburgh, but they're changing the world. So they are, you know, employing people in Pittsburgh maybe. But they're still doing things that just strike out in terms of innovation. And our guest today is definitely representing a company that has a deep presence in Pittsburgh, even though their headquarters is in Cleveland, which I'm not going to make any jokes about Cleveland at all, because you know, they're in our region. And, you know, they're good partners. And our relationship with Eaton has been tremendous, even even in Cleveland as well. So we've muted your microphones. And we've tried to make sure that we're not hearing any noise in the background. So I hope I don't have that problem, as well. And we have an opportunity for questions. Now. I think Jonathan Kersting, he's Vice President of Marketing and media is on the call. I think he got somehow locked out of zoom. But he is always here looking at making sure we have opportunities for questions. And any kind of comments. This is not about any opportunity to sell your wares. This is an opportunity to just focus on our guests. That is it. So with no further ado, I want to bring to the forefront, Brian Brickhouse, who serves as Eatons president for the Americas region of their electrical sector. So if you've been following us for this past year, and you've been following a lot of things that we care about, in terms of climate in terms of sustainability, you'll know that we have a deep passion in making sure that that anything related to electric is part of our agenda at the tech Council and what we're trying to do everything that we can to make this part of the world, sort of an epicenter of all good things in terms of you know, electrical, and Eaton is the epitome of that. So I know that today there was an earnings call. I'm thrilled that we have Ryan Brickhouse with us today. You know, first of all, I just want to say thank you, Brian, for being with us. But tell us a little bit about your journey because I think you've been eaten for a few years.

Yes, I have this in fact, in in July of this year, it'll be 36 years. So I've been with with Eaton now for 35 years, my roots, actually go back to Westinghouse, I started my career with Westinghouse, the Westinghouse here in Pittsburgh. And then the business that I was part of got acquired by Eaton back in 1994. And, and I've been with Eaton ever since. And, you know, I've really, I've been in the electrical business my whole career. I'm a degreed engineer, but really never spent any time in engineering. But I had the good fortune to spend three years living in Europe, running one of our European businesses, and then most recently, got to spend three years in Asia, running our electrical business in Asia Pacific, and then came back came back to Pittsburgh for my second tour of duty in 2018, and now I run the Americas, which for us, basically is Chile and Argentina, up to Canada. And, and it's a pretty complicated business. It's a very large business. It's, we are actually a reporting cycle public reporting segments so I can talk a little bit about the numbers and we we had a really good q1 but it's about well over a $7 billion business. I've got about 26,000 employees across the region, we have about 1500 employees in Pennsylvania, most of those are in the Pittsburgh area. Most folks know you know, we're our headquarter building is out moon right kind of by the airport cherington facility and still have a big factory in Beaver. We've got an Engineering Center and what we call our power systems experience center up in warrendale, where we have a lot of our power systems engineers, and then a number of smaller facilities in the area as well. So yeah, we're pretty pretty rooted in Pittsburgh, and we give our Cleveland folks and headquarters a hard time about

that. So you're based in Pittsburgh? I am. Yes, definitely. You're based in Pittsburgh? Yeah,

I work out of our moon Township. Really, that's where the the electrical business kind of grew out of, you know, when when Eaton acquired that, that Westinghouse business, it's really the the Westinghouse roots here in Pittsburgh that continue today, in our in our cherington. facility.

So let's talk so how about we talk a little bit about the earnings report tonight, what can you share with us in terms of the performance? In terms of what you oversee?

Yeah, I'd say it was it was surprisingly strong q1 for our electrical business and the Americas. In particular, we saw about 2% organic growth, year over year, and if you remember, last year, q1 was mostly pre COVID. So, you know, to see that kind of strength, and that's on the revenue side orders were up even even more, we were up almost 11% in orders for the quarter. So a lot of strength. And, and it's really, you know, our business spans residential, light, commercial, heavy commercial, you know, institutional, up through industrial, and then in the utility space. And, you know, we have a few really, really strong markets right now. Number one is the residential market. It has been strong since really, maybe June of last year when things started reopening. Market is just remarkable. And if you're trying to buy a house right now, you know that. But data center has been very, very strong. That's a market that, you know, we were a major player in. And we deal with both the hyperscale vendors, as well as markets, like multi tenant data centers, data centers, very strong as well. And then utility, you know, you got a lot of utilities spending on grid modernization, they're doing grid hardening. The you know, the advent of renewables is putting a lot of pressure on the utilities to be able to adapt to that. So there's a lot of good spending going on in the utility space today, as well.

It's an exciting time for me to be there. I mean, in terms of COVID over this last year, which which pieces of your own market Did you see grow the most outside of residential?

I would say really, data center and utility are the two that have grown the strongest other than residential, the industrial market is showing some signs of life, you know, oil and gas and heavy industrial really, you know, pulled back pretty hard, early last year. And those are very long cycle capital projects, mostly in the industrial space. Things like reshoring are helping us a bit they're, you know, they're certainly companies investing in the in the, into the not just the US market, but really into the Americas market overall. So our negotiation activity is up pretty pretty sharply and industrial as well. It's not not yet realized in terms of really orders and revenue, but the the activity strong.

And so there's a couple of questions on the graph. So does Eaton play a role in the infrastructure build out for EDS?

Yes, we do. We call it a electric vehicle charging infrastructure ebci. And so one of the if you read our earnings announcement, one of the acquisitions we made in the last quarter was a company a Swiss based company called Green motion. Green motion is a charger and probably more importantly chargepoint operator software manufacturer in Switzerland. And so this really kind of jumpstart not just our kind of the electrical infrastructure around ebci, but also charging itself both AC and DC fast chargers, as well as chargepoint operator software, which is really one of the keys there's particularly for public charging.

And so do you think some of the things that are happening in Washington, we're gonna see an acceleration in this Yeah,

you know, part of Biden's bill is I believe his target is 500,000 chargers public chargers within the next I think it's five or eight years, coming off a base of about 100,000 Today so that that's, that's a pretty significant build out. So yeah, that will create some great opportunities for us.

I would think so do you drive an electric vehicle?

I do not yet. My grandfather was a mechanic. And I just haven't gotten my head around driving an electric vehicle. Yeah, it's probably going to be the next car I purchased. But I have a feeling he'll be like rolling over in his grave.

I have a dream that I'll get elusive one day, but I don't think that's going to happen in my in my lifetime. If you've seen any of those vehicles, I think they started at $170,000.

Yeah, yeah.

But good. You're sort of at the right place at the right time. And then so, so let's talk a little bit, like I said, we're bullish on the electric vehicle industry, not because, you know, not only because of sustainability, but that's certainly a great reason and the aspect but because it allows us to keep our spending local, and it drives local advanced manufacturing, as well. So can you talk Can you dig in a little bit about the AV industry and how it's affected, impacting eating at all? And probably more importantly, that whole emobility, which includes the security they're up?

Right, right, yeah. And it's important to remember that, you know, Eden is a is an industrial, it's really a diversified industrial company. So whereas about 65% of our revenue is in the electrical space, you know, we still have an industrial business, which is primarily focused on on aerospace and vehicle. We have a hydraulics businesses being divested at this point, it's being sold, probably during q2 here. But that vehicle business historically, you know, we've been the one of the world's largest manufacturers of engine valves, were the world's largest manufacturer of superchargers, there's a lot of truck transmission and components there on the power chain. Obviously, all of that goes away in the world of electric vehicles. And so I think roughly four years ago, maybe five years ago, we stood up an E mobility business kind of in in parallel to our vehicle business, to really begin to, you know, develop and promote the technologies needed for electric vehicles, not just passenger cars, but you know, commercial electric vehicles as well. And so that business is scaling very, very quickly. And again, we're focused mostly on the powertrain and power distribution on on electric vehicle. So we're, we're kind of playing it from both ends, if you will, on the vehicle, and then the, the infrastructure to support the charging of the vehicle. So yeah, it's a it's a, it's a fairly significant market. For us going forward, I think this acquisition of green motion positions is really well, globally. So now we've got both AC and DC chargers for both the European and what we call the IC, or the C e market, kind of the rest of the world. And we're we're quickly working on a ul version of the green motion product, as well as bringing to the US market, in addition to the legacy chargers that we've had, but, you know, again, really, a big part of the green motion strategy was around there chargepoint operator software to CPO software and the infrastructure there, which is, you know, really evolving as we speak.

So how large of an acquisition was that? And where were they? At? Yeah, it's

a small company. They were they started in, I believe, 2009. So it's an early stage company at this point, but they have developed a terrific product line. And we had partnered with them just a commercial arrangement for about the past year, and really decided we, you know, we were just so impressed by what we saw. We wanted to acquire it.

That's great. And were they based on their based in Switzerland? Okay. So they're based in Switzerland. Excellent. So what about? I mean, because in your earnings report, you do talk about organic growth? What about non organic growth? What are their companies that you any kind of technologies that you're particularly interested in?

Yeah, we're, we're very acquisitive company. If you haven't noticed that. So in the last quarter, let me let me step back and maybe say in the last year, in my business, we've made four acquisitions. Most recently, back in March, early March or mid March, we acquired a company called trip light. And triple eight has been what we call the distributed it market. So they manufacture everything you would find in a data center whitespace as well as what we call edge computing applications. And I don't know I'm staring at the list. I can't see what companies people work with. But folks might might understand what edge computing is, but it's a lot of IT equipment, kind of, you know, out not in a data center. And you need a lot of products, you know, to be able to backup and support that Those it that it equipment and so trip light was a there about a $450 million company based in Chicago that provides you know, UPS products, rack products, connectivity solutions, search solutions, really for those primarily for those distributed it more for distributed it applications then really inside of a data center. So, again, data centers a big market for us, we continue to look for adjacencies and acquisitions in that space, we acquired a company in the utility space called isg. They're based out in, in Colorado. And then we made two other data center acquisitions PDI, in Richmond, Virginia, and a software company called optimum path, which makes what's known as data center infrastructure management software. So all, you know, very kind of strategic for us in some of those high growth markets. And generally, if you see us make an acquisition, it's usually for an adjacent technology could be for geographic expansion. But you know, we're really focused in on you know, we're kind of a technology company, you know, we we like to sell on value, and we like to provide benefits to customers. And you know, and it's not just a products business, we have a very kind of deep and wide services, organization services, a big part of my business. And, and we have a growing digital offering as well. So optimum path is a great example of that buying a software company.

So you know, last week, we hosted representative Donna Overlander to talk about her data center, tax incentives that's really, really important to us, we explored the types of manufacturing jobs that are actually created by data centers. This is just an important piece of the jigsaw puzzle, as we start to, you know, expand and think about why Southwestern Pennsylvania is a great place to build companies. So imagine it's important to you as well.

Yep, absolutely as

so there might be some questions. Hang on. Let me let me look here to see some questions. So Oh, Ray makes a comment that energy transition, electrification and digitization are the three large secular trends that Eaton is benefiting from. So right, that is all COVID. Two as well, that's COVID has really accelerated all of that, and made it really fast. And I think you've made progress in ways that you never thought you would have made progress in within one year.

Yeah, and it's, it's interesting. I mean, you know, things like the energy transition have only seemed to accelerate. And then you have a situation happen, you know, like we saw down in Texas with the cold weather event. And so yeah, I believe this, you know, this whole trend around electrification and the transition of our, you know, our, our energy infrastructure, you're right, I think it has, it has certainly gained momentum. And I think a Biden presidency really pushed that agenda even further. And I think it's great. There's,

there's a comment here about Chinese companies are managing the nuclear industry, in Argentina, under public private partnership is eaten working there to partner with other you know, governments and companies?

In China, in particular, or

things in general.

Yeah, yeah, we're very active. In fact, we, we still do play a pretty good role in the, in the nuclear industry, you know, some of our partners like Westinghouse, you know, that we we continue to partner with and sell to and sell with, but just partnerships in general is a big part of our strategy. And, you know, we'll whether that's a kind of a formal equity arrangement, like a joint venture, we announced two joint ventures in China this quarter, very recently. And, you know, it's a really good way to kind of leverage a partner where they might have some, you know, some either time benefits or technology areas that they've developed, and it's a good way to get into a market quickly.

And then also security, right. I mean, our infrastructure and security, we've seen enough. We know enough. What role do you play in that?

Yeah, it's a pretty critical role for us. I mean, we've we stood up about four years ago, what we call a CEO, we are a center of excellence around cybersecurity. And we really did it out of necessity to begin with, because if you think about our products, you know, all of our products really, you know, transform, distribute and protect electricity. Almost all of them today have some level of intelligence and communications capability. And so you know, the potential, you know, you hear about a lot in the utility space about cybersecurity needs, and it, it really comes down to components and systems like ours, you know, we have to ensure that they are cyber secure. And so again, we developed a CSP to focus just on cyber security that all of our product teams leverage, and our cybersecurity lab, I believe, was the first one in the US to be ul certified. And so it's, it's a part of our product development process today, we have to, you know, have the CEO, he really sign off on the, on the security of those products, and, and we go out, and we offer this service, you know, cybersecurity or, you know, in general, people think about it from an IT perspective, like, you know, I don't want to get a virus on my computer. But it is equally important in the OT portion of an enterprise, you know, their operating tehnologii, those smart products that might be out there in their factories or in the, you know, in the IT closet, not the server. And that is equally important. And so we've got a through our services business, we offer cybersecurity assessments really on that non IT equipment.

So, you know, you've committed at least eaten overalls committed to be carbon neutral by 2030. That's not that far away. So I'll talk about the challenges that you'll face along the way or that you are facing.

Yeah, I would say a couple things. I mean, we're, you know, we have programs underway, really kind of across all of our facilities to lower our carbon footprint, where zero waste to landfill and a number of our facilities, including where I work, and cherington. But, you know, we manufacture things. And so, you know, one of our biggest challenges is just around greenhouse gas and the amount of power we consume ourselves. And so, you know, it's a little bit of, you know, we sell solutions to help people manage efficiency, and productivity. And so deploying those technologies in our own factories is really important. We've recently announced we've two micro grids at two of our largest facilities in Puerto Rico, Puerto Rico has kind of a unique challenge in that they get hit by hurricanes pretty high. So there's a business continuity aspect to that as well. But, you know, we put in 1.5 megawatts of solar panels with battery storage, not just from a, from a business continuity standpoint, but from a from a resiliency and, you know, again, green standpoint of it's a it's a dramatic greenhouse gas reduction for those two facilities. So So yeah, it's it's a big deal. And it we feel it just like other companies who are on this journey.

So let's switch gears really quickly and talk about your CEO has been a champion, a longtime champion of diversity, inclusion, equity, prosperity, can you talk about Eton's values and initiatives as an as it relates to this topics?

Yeah, I mean, I, you know, Craig is one of I don't know how many I know, it's a very small number, unfortunately, of, you know, African American CEOs in the us today. And, you know, this, you know, our focus on inclusion and diversity predates crag. And it really, you know, in my 35 years, particularly since, you know, the last two CEOs, Sandy Cutler and Craig Arnold have really made it a focus as part of our core values. I mean, we believe and firmly believe this, that a diverse workforce performs better. And, you know, there's, there's data behind it that shows you the more diverse workforce, the better the results. And so, you know, we've been doing we call it valuing inclusion and diversity training for our employees for, geez, 10 years or so. And, and it's a big focus. I mean, we have internal goals around, you know, improving our diversity and proving our hiring. But, you know, there's a diversity is really a number, the harder thing is inclusion. Right. And so, you know, we've developed er, G's or employee resource groups, you know, around, whether it's African American employees, Asian American employees, you know, women in the workforce, Gen X, Gen Y, it's, you know, we have er G's running and, you know, I think probably 10 or 12 different areas today, and it's just, it's kind of a part of the way we operate. It's just a core part of our fabric today. So yeah, it's and I think I was mentioning right before we came on, we had to book two of our board members retire in the last quarter, and both of them were replaced with diverse board members. So, at this point over two thirds of our board of directors are either female or diverse.

Wow, that's, that's really high. Good on you. I know that you had been doing that for a long time. So any chance that we can shine the light on on the work that you do right here really makes a difference? So So what about Pittsburgh? is a team growing in Pittsburgh? Are there opportunities here? It is, it

really is. I mean, we're,

I think in my organization in total right now, I think we're trying to hire about over 100 people. Like I said, we have about 1500 employees in Pennsylvania. We do engineering here, we do a lot of our kind of corporate structure from the from from my business. So we have a lot of finance folks, HR folks. Supply Chain individuals, again, we have a lot of labs in our building. In up in warrendale. A lot of engineers we have power systems engineering there, a lot of controls engineering, so and then, in our factories, you know, we are always looking for in fact, I think we have a number of openings in our in our beaver facility right now just in, in the management structure there. So yeah, we're hiring.

That's exciting. Okay, so we'll make sure that people go out to eat and calm. We have Ray Huber, who joins us on the call right off. And he's he's the CIO. Hey, Ray, we can I don't know if we can unmute your night. Yeah. How are you? Thanks for joining. I'm

doing great. Thank you. Thanks for the invite. And it's great to have Brian on the business as usual show here.

Is there anything that you think we should have covered that we didn't, but this try to pack as much in as possible?

Just two things. One, we are hiring some IT resources as well. So that's another skill that we're looking for, we got a couple of postings, Eaton jobs.com is where we post all of our openings. So that would be a place to go look. And then I did want to highlight and I put it in the chat that Eaton has been very generous to the Pittsburgh community over the years, I mean, we give literally hundreds of 1000s of dollars every year back to all the nonprofits, you know, whether it's the food bank, United Way veterans, women in need, people with disabilities, I mean, it's it's a very generous company in believes in giving back and allows all of its employees to donate time to do volunteer work. And, you know, get involved in the community. So I think that's a it's great to be a part of that.

It's great. And so I know that you've been active in the tech community. Right. So I think, you know, your leadership has mattered in terms of tying things together. There's lots of innovators that are right here, Brian, right at our footsteps here really are.

This is a great market for engineering and for technology. And it's, you know, we've got some great universities in the area that we hire a lot from. So yeah, this is a great area.

Yeah, we have a pretty good partnership with the University of Pittsburgh, they have a power engineering program that Eaton health helps fund and we actually have people go teach there. And, you know, we've hired quite a few people from the University of Pittsburgh from their, you know, engineering teams or graduate. So it's a pretty powerful program we have with them.

And then what about what about companies that might be more at the earliest stage? If they they think they might have some solutions? Or some ways to build strategic partnerships? What might be the best way to encourage that kind of connection? Yeah, I

think, you know, through our really it kind of is grassroots through our product lines, you know, our product managers and engineering leaders that, you know, we're always, you know, we're doing products and technology roadmaps, we're investigating new technologies, whether it's, you know, in the areas of software, power electronics, you know, obviously, we do a lot in with electricity, so the arc interruption and different materials, and we routinely partner with, you know, smaller companies who are, you know, developing adjacencies there that, that can really help us. So, yeah, absolutely.

And then there's just one last question from Bob Chapelle, asking do parties participate in pits, co op program, engineering?

It and engineering and finance and several other areas?

Right. That's great. Well, first of all, thumbs up for a great earnings earnings call this morning, just about an hour before we even did the show. So thank you so much, Brian Brickhouse for joining us today and sharing your story. We recorded this and we will share it and people do come in and they can't make it today. They they use it as an opportunity to listen, and I want to thank Ray Huber Brian, you should be proud of him. He has a great Ambassador, we are and does a lot of great things for the community as well as the IT community that he leads. So I want to thank everyone for being here today. Thank you Eaton for being a great champion of so many things. Diversity, sustainability, managing your footprint, and achieving some really high and worthy goals. Really proud to have you here as a global company, making your home here, even though we know it's Cleveland, okay. I know you're gonna say that to me.

Okay. Well, electrical is Pittsburgh, so we're just

gonna go is Pittsburgh. That is it. So thank you so much. I what's on board Jonathan router went down. And now he just joined us

back is on board for tomorrow. Just in time, we have PPG stopping by both mark and Scylla to talk about their sustainability goals for 2025 and how they're on track to

look at that. Look at that. So Brian, man 2025 goals. Wow. Well, we

do too. We just don't talk about him yet.

So again, thank you all enough. Really appreciate it. Hope to see you one day really soon in person. And everyone stay safe and we'll see you tomorrow.

Thanks for having me, Audrey. Thank you.

Transcribed by https://otter.ai