II. Restructuring of European operations

Reestablishment of the European operations

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Concepts (1) Scaling-down production in the U.K. and transferring to the European continent (2) Identification and clarification of profit responsibilities through the separation of the automotive component business from the bearing and precision machinery & parts operations (3) Withdrawal from unprofitable products and businesses (4) Major reduction of the workforce, including those working in the administrative divisions

Under these circumstances, we will accelerate and expand the scope of the business restructuring activities that are currently being implemented in order to return our European operations to the black as quickly as possible.  The basic strategies of the business restructuring activities currently being undertaken are to scale-down our European operations, reduce surplus production capacity, and transfer production capacity to Poland mainly from the U.K. In regards to our production system, we will separate the automotive components operations from our bearings and precision machinery and parts operations, shall place the automotive components operation under the parent company's direct control, and clarify the profit responsibilities of each product segment.  In addition, we will cease production of all unprofitable products, and if necessary, consider withdrawal from unprofitable businesses altogether.  We will also take steps to downsize our surplus workforce resulting from the aforementioned reorganization of our production sites and the streamlining of the administrative divisions.