News Releases from Headquarters


Hitachi, Ltd. to Make UNISIA JECS CORPORATION a Wholly Owned Subsidiary
Share exchange will consolidate management, strengthening automotive products business

TOKYO, Japan, April 18, 2002 -- Hitachi, Ltd. (TSE: 6501, NYSE: HIT, "Hitachi") and UNISIA JECS CORPORATION (TSE: 7275, "UNISIA JECS") today announced that in accordance with a memorandum of understanding signed by their respective boards of directors, Hitachi, Ltd. will make UNISIA JECS a wholly owned subsidiary through an exchange of shares. The transaction is being made to strengthen the companies' automotive products businesses.

Hitachi currently holds 16.7% of UNISIA JECS ' equity. Integrating their operations will enable the two companies to implement speedy and effective development of the business, further strengthening their competitiveness in the growing automotive products business.

The share exchange agreement will be concluded towards the end of May 2002, and, upon approval at Unisia Jecs' ordinary general meeting of shareholders, which is scheduled to take place in late June, the share exchange transaction is expected to take place on October 1, 2002. Also on October 1, UNISIA JECS will change its corporate name to Hitachi-Unisia Automotive, Ltd. As a result of the share exchange, shares of UNISIA JECS will be delisted as of September 25, 2002.

1. Gist of the agreement
The Hitachi Group's goal is to be a global supplier able to provide comprehensive solutions based on information systems services and social infrastructure systems. Hitachi is implementing a consolidated management policy that includes reorganization of businesses, alliances, mergers and acquisitions. This will ensure that subsidiaries engaged in core hardware and other business areas essential to this goal, are wholly-owned members of the Hitachi Group.

The purpose of making UNISIA JECS a wholly owned subsidiary is to further expand the automotive products business. This encompasses solutions for enhancing comfortable and convenient life, and ecologically green solutions, where the Hitachi Group has set its strategic targets.

With UNISIA JECS as a wholly owned subsidiary, the Hitachi Group can combine technology related to basic automotive functions, such as braking and steering, with Hitachi's motor actuator and engine control technology and cutting-edge IT and electronics technologies, which is needed to enter the ubiquitous information society. In areas ranging from fuel cells, electric automobiles, hybrid cars and other environmentally-friendly power-train technologies to integrated vehicle control and telematics services, advanced technologies will be indispensable to automobiles in the ubiquitous information society. This transaction will make it possible for the Hitachi Group to meet the future needs of the automotive industry in its quest for new technologies that combine mechatronics, electronics and IT.

The Hitachi Group will also use this transaction as an opportunity to further strengthen the automotive parts business through its R&D and financial capabilities, personnel deployment and automotive business.
2. The advantages of making UNISIA JECS a wholly owned automotive-parts subsidiary
Engine control equipment, electric vehicle drive systems, on-board information devices (electronic toll collection (ETC) systems and vehicle information and communication systems (VICS)) and electrical equipment for vehicles are just some of the automotive product areas in which the Hitachi Group is involved. In recent years, the group has been expanding operations in a number of other important sectors. These include electric power-trains and low-emission engines, which relate to the environment, adaptive cruise control systems; electric brakes, which relate to safety and driving comfort; and information-related products, such as car navigation and telematics systems.

A broad-based development of operations is under way, covering the car navigation and telematics business of Xanavi Informatics Corporation (which became a wholly-owned subsidiary in December 2000) to the Semiconductor & Integrated Circuits Group's automotive semiconductor business, as well as materials, functional parts, infrastructures and solutions of many other business groups and affiliated companies.

UNISIA JECS manufactures automotive systems and components that underpin every area of basic vehicle function: engine, drive train, suspension, steering and brakes. It has advanced technology for combining mechanical, hydraulic and electronic control systems, and application engineering to vehicles. In recent years, amid an increasing emphasis on environmental conservation and safety, UNISIA JECS has been expanding operations in the areas of Valve Timing Control systems (VTC), steering systems and brake systems.

In April 1999, Hitachi took an equity position in UNISIA JECS as part of an alliance between the two companies relating to vehicle control in an Intelligent Transport System (ITS). Since then, UNISIA JECS has been a valuable partner in the automotive parts business, working with Hitachi on the joint development and marketing of a number of products, including engine control equipment and the new area of adaptive cruise control systems.

With UNISIA JECS as a wholly owned subsidiary, the Hitachi Group can combine Hitachi's sensor-based information verification and advanced electronic control technologies with UNISIA JECS ' world-class brake and steering technologies and application engineering to vehicles. This will greatly enhance the group's competitiveness in such areas as electric brake products and adaptive cruise control systems.

In some areas such as engine control equipment where there is some overlap between the two companies' operations, it will be possible to increase efficiency by concentrating investment in development and centralizing production equipment, thus strengthening engineering capabilities and boosting cost-competitiveness.

As a leading presence in automotive areas relating to ecology, safety, driving comfort and information systems, the Hitachi Group will be able to develop and provide products that combine enhanced automotive functionality with convenience.

Looking to the future, to expand this area of operations and become more competitive, the two companies will focus on making effective use of their domestic and international networks, as well as on building an optimized business system, including through alliances inside and outside the Hitachi Group, that will enable them to provide solutions that meet customers' requirements.


Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.

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