He has retained the enthusiasm for commercial aviation he had when Eaton made its string of A&D acquisitions in the mid-2000s. Many of the questions suppliers had back then—such as whether Airbus and Boeing would develop new narrowbody jets in the near-term and which new entrants would challenge their duopoly in the single-aisle market—have been answered, he notes. Airbus and Boeing have opted to offer new engines on the existing A320 and 737, while new narrowbodies are coming from China's Comac (the C919), Russia's United Aircraft Corp. (the MS-21) and Canada's Bombardier (the CSeries). As aircraft production ramps up, Eaton hopes to raise operating margins in its aerospace business to 16% by 2015, up from 12.4% in 2012.
The future of the defense market, of course, is a very different story. “In 2008-09, there was a global recognition that developed nations all have a debt problem,” Cutler says. “Whether you go to the U.K., France or the U.S., the defense market has got to pull back substantially. Consumers and businesses have delevered, but governments have not.”
But while tough cuts will have to be made, Cutler believes essential programs will move forward. His list includes the F-35, heavy-lift helicopters, the U.S. Air Force's tanker and unmanned aircraft. “Not every company is going to see their military business go up,” he says. “But the opportunity on the platforms that continue is probably fairly handsome.”
And what about missing air shows? Cutler waves off a question about Eaton's low profile at Farnborough. “The real business doesn't get done at the show,” he says. “It gets done on the investments you make in R&D. That's where we've been really pouring on the coals in terms of putting money into new programs.”