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December 12, 2001
TBK Phoenix Plan
Tokyo, Japan, December 12, 2001 -- Sales of commercial-use automobiles have languished as users hesitate to purchase new models amid the prolonged slump in the Japanese economy. Accordingly, we project a decline in consolidated ordinary profit for the current fiscal period.
       In this business climate, we are actively rationalizing our business operations. Reflecting this effort, we have formulated the TBK Phoenix Plan.
       In implementing the plan, we hope to return to profitability in our mainstay business (automotive components production) in the near future. To achieve such a turnaround, we must radically change our earnings structure to assure improved profitability even if current revenues remain unchanged.
Objectives of the plan are as follows:
1. Generate positive consolidated ordinary profit in the first half of fiscal 2002.

2. Generate positive ordinary profit in the second half of fiscal 2002 for TBK's three major consolidated subsidiaries: Tokyo Buhin Kogyo Co., Ltd., Tokyo Seiko Co., Ltd., and TBR Co., Ltd.

Practical measures

Measures Earnings improvement
(year-on-year increase in the second half of fiscal 2002).

Reduce personnel costs

(1) Reduce personnel by 110 at the three companies by the end of March 2003 (from 947 as of October 1, 2001).
(2) Implement voluntary retirement programs.
(3) Implement incentive packages aimed at encouraging workers to apply for voluntary retirement.
(4) Implement wage cuts for directors and employees.
¥800 million

Allocate company resources for optimal production.

(1) Relocate linings production and other businesses.
(2) Consider transferring pump production operations for light-duty vehicles to manufacturing facilities in Thailand (contingent on analysis of earnings for the first half of fiscal 2001).
¥120 million

Reduce materials costs.

(1) Reinforce the functions of the Consumers' Research Implementation Office and implement consumers research initiatives companywide.
¥800 million

Restructure unprofitable businesses.

(1) Achieve profitability in casting business by expanding sales activities.
(2) Restructure production lines in three manufacturing facilities.
¥80 million

Relocate some sections of the head office.

(1) Establish new offices for the president, the general affairs section, and the planning section in Fukushima.
¥1,800 million
Note: In the first half of fiscal 2001, the automotive sections of the three companies had a combined ordinary loss of ¥400 million The three companies had a combined net loss of ¥500 million.
For more information: fqa@tbk-jp.com
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