Shipbuilding and Precision Machinery Divisions to be Spun Off

  Kawasaki has decided to spin off its Shipbuilding Company and Precision Machinery division in October 2002. Once they become wholly owned subsidiaries, they will implement management structures that are speedier and more flexible, and measures to survive increasing competition by deploying unique technologies and boosting customer loyalty. Kawasaki will provide management assistance, including sales and technical support, for the two former divisions.

[The new shipbuilding company]
Company name: Kawasaki Shipbuilding Co., Ltd. (tentative)
Sales: Approximately ¥90 billion (expected for FY2001)
Employees: Approximately 1,750 (initially)
Seven affiliated companies of Kawasaki's Shipbuilding business in Japan
and Nangtong COSCO KHI Ship Engineering Co., Ltd. in China will
form a group for the new company.

[The new precision machinery company]
Company name: Kawasaki Precision Machinery Co., Ltd. (tentative)
Sales: Approximately ¥34 billion (expected for FY2001)
Employees: Approximately 670 (initially)
Kawasaki Hydromechanic Corporation in Japan will be merged with
the new company, while Kawasaki Precision Machinery (UK) Ltd. in England will become its subsidiary.