Eaton has announced that it is going to exit the mains lighting market in EMEA to focus on emergency lighting and fire products. The company cites low margins in the commercial lighting sector as a key factor in its decision.
As part of the retreat from the mains lighting market in Europe, the Middle East and Africa, Eaton will be closing a 50,000 sqm factory in Doncaster that it acquired in 2012. The site is where many of the firm’s luminaires for commercial, retail, education and industrial applications are designed and manufactured.
The closure of the factory is set to result in the loss of 300 jobs, with 90 set to be saved as part of Eaton’s decision to have its emergency lighting products manufactured at another site nearby.
Why has Eaton made the decision to exit the mains lighting market?
In Q2 2020, sales at Eaton were down 30% when compared to the same time in 2019. That’s largely due to the Covid-19 pandemic, but obviously the business is assessing the areas that are healthiest and which are the weakest links. It has decided that the mains lighting market in EMEA is one of its weakest areas, mostly due to the low margins associated with the market.
In a statement, the company commented, “Following a strategic review of the business, regrettably Eaton announced to its employees that it is proposing to exit the EMEA Mains Lighting business market and focus activities in Doncaster on Emergency Lighting and Fire product lines as well as a centre of excellence for key UK support functions.
“We believe that this proposal is the most appropriate due to the continued challenges of increased global competition and sustained negative financial results that have made the mains lighting product lines no longer commercially viable.
“Should this proposal be implemented, it would result in the closure of the existing Doncaster facility, the exit of the mains lighting market and a move to a new facility within the Doncaster region with a smaller team.
“It is anticipated that approximately 300 positions based in or out of the company’s current facility in Doncaster would be impacted.
“This is in no way a reflection of the hard work and dedication of the team over the past years. It is intended that up to 90 positions may be able to transfer to the new facility.
“This action would be taken in full accordance with local laws and consistent with Eaton’s practices.
“We regret the impact that this proposed restructuring would have on our employees and their families and would take steps to ensure any actions are carried out with care and concern for all of individuals involved.
“Our goal would be to help impacted workers transition to new facilities, new positions or to new careers.”
What is the future for Eaton’s lighting business?
Eaton has gradually pulled away from the lighting market in many areas around the world, and this move is not exactly unexpected. The firm offloaded its Cooper Lighting division back in 2019 to Signify for £1.1 billion, although that deal focused on North America. That meant the company was left with an EMEA lighting division that was suffering from low margins due to a flood of LED luminaires of all shapes and sizes coming from China.
For now, Eaton is happy to continue manufacturing emergency lighting and fire products under its brand. However, the company is clearly more interested in other markets, with it having invested heavily in energy storage, as well as switchgear and power distribution products.