Mid-term Business Strategy

Bearings

(1) Reinforcement of the cost competitiveness of our Ball bearings

• Ishibe Plant, Fujisawa Plant NSK Fukushima
  (Transfer of Medium-sized ball brg. production: By Aug.'02)
• NSK Fukushima Jakarta Plant
  (Transfer of Small-sized ball brg. production: From Jul.'02)
• Ohtsu Plant Kunshan Plant, China
  (Transfer of Standard ball brg. production: From mid '03)
  Construction of a third factory building under consideration

(2) Reinforcement of the cost competitiveness of our Roller bearings

• Reorganization and streamlining of the Fujisawa Plant
• Fujisawa Plant Saitama Plant
  (Small-sized tapered roller brg.)

(Integration with NSK Steering Systems Co., Ltd.)

• The business-result responsibilities of the EPS and steering column businesses will be allocated separately

(2) Withdrawal from unprofitable businesses

• Closure of the Akagi Plant following the transfer of the CVJ business to NTN

(3) Deliberations in regards to producing at optimum manufacturing bases

Precision machinery and parts

Spinning-off of the Precision machinery and parts business unit

Timing ---------	During the first half of FY 2002
Concept -------	Ability to adjust to drastic demand fluctuations
Organization --	Streamlining of the workforce. Production increases shall be dealt with by using contract workers

* Production of small-sized ball screws shall be reinforcedat NSK Kyushu

 Regarding our production sites, we will adjust our production capacity to match the level of demand following the hollowing-out of the domestic industries.
For our bearings businesses, we will increase the number of miniature and small-sized ball bearing production lines to be transferred from NSK Fukushima to the Jakarta Plant as the hollowing-out of the electrical and IT-related industry, which is the main customer of these products, proceeds at a faster rate than any other industry. We will transfer production of our commodity-type standard ball bearings from the Ohtsu Plant to the second factory building of the Kunshan Plant in China. We have also started deliberations on building a third factory building there. Production of medium sized ball bearings will be transferred from the Ishibe and Fujisawa Plants to NSK Fukushima, but this does not affect our plans to scale-down production at Fukushima as well as at the Ohtsu Plant.
 As for our roller bearings, we will endeavor to cut costs by over 20% through the rationalization of the Fujisawa Plant. We will also concentrate production of small-sized tapered roller bearings for trucks at the Saitama Plant in order to improve our production efficiency.
 Regarding our automotive components business, we will spin-off the Soja Plant, which produces steering columns and joints, and shall integrate it with NSK Steering Systems Co., Ltd., which was established when we spun-off the EPS business unit last April. The new company shall specialize in manufacturing automotive components. As for our unprofitable CVJ business, we will hand it over to NTN, and close the Akagi Plant.
 The new NSK Steering Systems Co., Ltd. will be in charge of both the steering column and joint business and the EPS business, but profits shall be managed separately. And to establish supreme competitiveness, we will perform procurement and production at the optimum site.

 Finally, regarding our precision machinery and parts business, we will spin-off this unit in order to adjust ourselves to the drastic fluctuations in demand that is characteristic of this industry. The new precision machinery company will endeavor to streamline its current workforce of 1,350 employees and cope with production increases using contract workers.