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Reorganization of Motorcycle Operations and Personnel Reshuffle Promoting Manufacturing Innovation by establishing a System Supplier Structure

September. 28, 2001

Yamaha Motor Co., Ltd. will implement the reorganization of Motorcycle Operations and personnel reshuffle, focusing on Manufacturing Innovation as of October 1, 2001, in order to hone its competitive edge in the global motorcycle market. The most noteworthy change is the adoption of a system supplier structure. The current GEM (Global Engineering and Manufacturing) Center of Motorcycle Operations will be reorganized, with its core development, manufacturing and procurement functions integrated into motorcycle part system-based units. Under this new system supplier structure, each organization can develop, manufacture and procure each part system on its own initiative.

With the reorganization - combined with the introduction of competition with outsource parts manufacturers - we aim to implement aggressive process reengineering, while promoting concurrent engineering in the parts production system, thus eliminating the boundaries between development, manufacturing and procurement operations. Each of the system supplier organizations will also play an important role in the operations of motorcycle plants overseas.

Characteristics of System Supplier Structure

1. The current manufacturing organizations, based on parts and processes, will be changed to those based on part systems.

2. The manufacturing system will be changed, from the current parts group-based production, to through-process production.

3. Plants will be reorganized and integrated into the part system-based system supplier structure.

4. In addition to its manufacturing function, each system supplier organization will possess development and procurement functions. Thus, we aim to establish an autonomous, modular operating structure by developing and operating part systems on each system supplier organizationfs own initiative.

Major changes in the reorganization

1. The 6 factories under the GSS (Global System Supplier) Management Group of the GEM Center, as well as the 3 factories under Casting Operations, will be reorganized into 9 system supplier organizations. In accordance with this reform, the current factory general manager positions will be abolished, and instead, system supplier leader positions will be introduced under the new system supplier structure.

*The 6 factories under the GSS Management Group:
Hamakita Factory, Soude Factory, Morimachi Factory, Nakaze Factory, 5th Iwata Factory and 6th Iwata Factory

*The 3 factories under Casting Operations:
2nd Iwata Factory, 3rd Iwata Factory and 4th Iwata Factory

*The 9 system supplier organizations
Engine-related: Engine system supplier, 1st system supplier, 2nd system supplier 3rd system supplier and 4th system supplier
Body-related: Tank system supplier, Exhaust system supplier, Chassis system supplier and Exterior system supplier

2. The Engine Development Department of the PM (Product Management) Group will be integrated with the Engine system supplier, while a part of the body development function of the 1st to 5th PM Divisions will be transferred to the Body-related system supplier organizations.

3. Casting Operations will be discontinued and absorbed into the GSS Management Group.

4. The GSS Promoting Division of the GSS Management Group will be dissolved, and a new Casting Division will be established.

5. The Japan, U.S. and Eur. Business Division of the SCM Center will be divided into the Japan and U.S. Business Supplier Division and the North American Business Division to strengthen competitiveness and profitability in the North American market.

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