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                      | HITACHI HOME | UP | SEARCH | HITACHI

                      News Release

                      November 5, 1998

                      Seven affiliated companies in the Hitachi region to be reorganized into three companies

                      -- Will strengthen consolidated-base structure in power systems sector --

                      Hitachi, Ltd. (NYSE:HIT) today announced that seven of the ten companies that are 
                      affiliated with the Hitachi Works in the Hitachi region will be reorganized to speed up and 
                      streamline consolidated operations within the power systems sector.  Under the 
                      reorganization the seven companies will be consolidated into three new companies that will 
                      be established on April 1, 1999.  The three new companies are to be named Hitachi 
                      Engineering Co., Ltd. (HEC), which will handle the design and engineering of nuclear power 
                      and thermal power equipment; Hitachi Engineering and Services Co., Ltd. (HESCO), which 
                      will handle the production of thermal power equipment, rolling mill equipment and industrial 
                      machinery and related support services; and Hitachi Kyowa Engineering Co., Ltd. (Hitachi 
                      Kyowa), which will be responsible for testing and analysis, precision casting, special painting 
                      and gilding, and for providing each factory with production support.
                      
                      The seven companies involved are Hitachi Engineering Co., Ltd. and Hitachi Nuclear 
                      Engineering Co., Ltd., which will be consolidated to form HEC; Hitachi Engineering and 
                      Services Co., Ltd., Hitachi Machinery & Engineering, Ltd. and Hitachi Kiso Co., Ltd., 
                      which will be consolidated to form HESCO; and Hitachi Kyowa Engineering Co., Ltd. and 
                      Nikkyo Service Co., Ltd., which will be consolidated to form Hitachi Kyowa.
                      
                      Up until this point, Hitachi, Ltd.'s affiliated companies have operated as autonomous units. 
                       As part of this, during economic boom times affiliated companies in the Hitachi region have 
                      functioned as a support base in the power systems sector, making it possible to utilize the 
                      advantages of being able to simultaneously move ahead with high-volume operations on 
                      several fronts.  Now, however, with increased international competition driving down prices 
                      in the power systems sector, the strengthening of price-competitiveness in this sector of 
                      operations has become an urgent priority for Hitachi.  Hitachi is therefore consolidating the 
                      seven affiliated companies with the aim of strengthening operations on a consolidated basis 
                      in the current business climate.
                      
                      Thus, the reorganization is directed at establishing a solid corporate foundation based on 
                      a unified Hitachi Group structure, by moving ahead with (1) the streamlining of 
                      operations on a consolidated basis and the speeding-up of business operations; (2) the 
                      realignment of  business divisions with their related business sectors; and (3) the 
                      establishment of closer management ties with the business divisions concerned while at 
                      the same time advancing the independence of the divisions.
                      
                      Hitachi, Ltd. will implement a new management system starting in April 1999, and at the 
                      same time the existing Power & Industrial Systems Group will be divided into the Industrial 
                      Systems & Equipment Division, the Elevator & Escalator Division, the Airconditioning & 
                      Refrigeration Systems Division, and the Industrial Components & Equipment Division (the 
                      names are provisional).  Each of these four divisions will function as what is substantially 
                      an independent company.  The three new companies formed by the reorganization will work 
                      in close liaison with the Industrial Systems & Equipment Division and focus on 
                      strengthening the competitiveness of products and securing orders and revenues as the 
                      Hitachi Group directs its endeavors to achieving a recovery in its business results from fiscal 
                      1999.
                      
                      
                      Outline of new companies
                      1.  Hitachi Engineering Co., Ltd.
                      (1)	Location:	2-1, Saiwai-cho 3-chome, Hitachi, Ibaraki Prefecture
                      (2)	Capital:	Approximately 1.7 billion yen (100% owned by Hitachi, Ltd.)
                      (3)	Sales:		Approximately 60 billion yen (estimate for fiscal 1999)
                      (4)	Employees:	Approximately 2,100 (estimated, as of the end of March 2000)
                      
                      2.  Hitachi Engineering and Services Co., Ltd.
                      (1)	Location:	2-2, Saiwai-cho 3-chome, Hitachi, Ibaraki Prefecture
                      (2)	Capital:	Approximately 2 billion yen (93.2 % Hitachi, Ltd., 6.8% Hitachi 
                                                         Engineering Co., Ltd.)
                      (3)	Sales:		Approximately 115 billion yen (estimate for fiscal 1999)
                      (4)	Employees:	Approximately 2,700 (estimated, as of the end of March 2000)
                      
                      3.  Hitachi Kyowa Engineering Co., Ltd.
                      (1)	Location:	10-2, Benten-cho 3-chome, Hitachi, Ibaraki Prefecture
                      (2)	Capital:	Approximately 270 million yen (20.8% Hitachi, Ltd., 73.3% Hitachi 
                                                         Life, 5.9% Chuo Shoji) 
                      (3)	Sales:		Approximately 21 billion yen (estimate for fiscal 1999)
                      (4)	Employees:	Approximately 980 (estimated, as of the end of  March 2000)
                      
                      
                      
                      
                      


                      WRITTEN BY Secretary's Office
                      All Rights Reserved, Copyright (C) 1998, Hitachi, Ltd.

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