NKK Corporation announced today that, as part of an ongoing effort to enhance its competitive edge by improving profitability and strengthening its business foundation, the company has devised a reorganization plan, including revised personnel and benefits policies. The plan was submitted to the company's labor union this morning.

   The details of the plan are as follows:

1. Partial Reorganization of Steel and Engineering Operations

   Selected operational divisions in the following works will be reorganized as separate companies, following comprehensive analysis of their respective business characteristics to strengthen their competitive advantages:

• Welded pipe operations will be reorganized for consolidation in group companies including Kokan Kenzai K.K., a construction materials subsidiary. NKK's electric-resistance welded pipe and butt-welded pipe operations will be reorganized as a new company by October 1999.

• Galvanizing and color-coating, both of which are surface-treated steel sheet operations, will be reorganized as a new company by July 1999.

• Other mill operations, such as ironmaking, steelmaking and hot-rolling, will be thoroughly streamlined for enhanced competitiveness.

   The works, comprising ferro-chrome and ceramic-related operations, will be reorganized as a new company by July 1999.

   Steel-frame fabrication operations at the works will be reorganized as a new company by July 1999.

2 .New Policies for Personnel and Benefits

   As part of its aggressive ongoing efforts to improve profitability, NKK will take the following decisive steps to promptly and substantially reduce labor costs:

• Workforce Reduction

     As a result of the reorganization and other restructuring and streamlining measures, NKK's total workforce will be reduced by 3,300, from 15,300 as of September 1998 to 12,000 by the end of fiscal 1999.

• Revised Personnel and Welfare-Related Policies (effective April 1999)

  • Employees over 55 who are currently or due to be seconded to other companies will be permanently transferred to these companies.

  • Managers currently seconded to NKK group companies and due to be permanently transferred to these companies at age 53 will be permanently transferred at age 50.

  • Various benefits will be revised.