Hitachi to Implement Emergency Management Measures and New Consolidated Management System

Business Wire, August 31, 2001

(2) Introduction of Hitachi's FIV Index

The Future Inspiration Value (FIV) index being developed by Hitachi will be used to re-evaluate the Company's business portfolio, in relation to formulating consolidated management strategies and studying reorganization matters. Based on the outcome of this re-evaluation, the portfolio the Hitachi Group should take will be redefined, business strategies will be rigorously reviewed, and operations resolutely reorganized.

In assessing value, in addition to cost of capital, the FIV index includes other elements such as risk and environmental accounting factors. It was devised as a measure of corporate management that takes into consideration the interests of a range of stakeholders.

(3) Establishment of Group Finance Center

In October Hitachi will establish Group Finance Center to expand the business strategy functions of the Hitachi Group, improve management efficiency and enhance the use of the comprehensive capabilities of the Group. The Center will be used to centralize the management of Hitachi Group funds, and those funds will be strategically used for the reorganization of group business operations. The funds will also be used to reduce interest-bearing debt. Looking to the future, it will also be used to raise funds, utilizing Hitachi's high credit rating and the merits of scale.

(4) Policies Relating to Holdings in Subsidiaries and Affiliated

Companies

With respect to subsidiaries and affiliated companies in which Hitachi has a holding, the mission and position of each such company will be clarified. And, determination will be made on a case by case basis, as to whether the holdings in a company will be sold or whether the company will be made a wholly owned subsidiary. Once such a determination has been made, the decision will be implemented on an expedited basis.

Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global electronics companies, with fiscal 2000 (ended March 31, 2001) consolidated sales of 8,417 billion yen ($67.9 billion(a)). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi, Ltd., please visit Hitachi's Web site at http://global.hitachi.com.

Note (a): At an exchange rate of 124 yen to the dollar.