Reform of Administrative Operations and Accompanying Personnel Changes

As part of its efforts to hone its competitive edge, Yamaha Motor Co., Ltd. (the Company) will embark on a new and comprehensive reform of its administrative operations, and will reassign personnel in conjunction with the move, effective September 1, 2004. The Company seeks to further enhance the function of its administrative operations and raise its organizational and staff productivity. The new initiative, called SMART*, follows manufacturing reform featuring the SyS (System Supplier) system ― which integrates development, purchasing and manufacturing capabilities ― launched in October 2001.

*SMART stands for Strategic, Measurable, Accountable, Return Max and Timely

The present initiative is not designed to achieve marginal improvements on existing staffing, organizational and operational capabilities, but to effect a vital restructuring. Organizations and functions within the Company, as well as personnel, will be recast in arrangements for optimal administrative operations. The Company believes that these revitalized administrative operations can and must enhance the core competencies of the Yamaha Motor Group in terms of globalization and consolidated management in the medium- and long-term perspective. This, in turn, will drive sustainable growth in the future.

The initiative’s salient feature is the way it streamlines operations by integration and simplification in a systematic approach. Thus, the Company can allocate its human resources to key strategic support functions that need to be strengthened groupwide, on a priority basis. To this end, SMART seeks to reclassify and consolidate functions previously fragmented across existing organizations, and to increase the efficiency of operations. The new organizations created by the initiative will serve to facilitate the efforts of their staff to address the key issues ahead.

The summary of the organizational reform is as follows.

・Previously, the Company’s administrative operations consist of 15 organizations (67 departments), including the Brand Promotion Division, Corporate Planning SG, Public Relations Division, Tokyo Office, Customer Relations Division, CCS Management Division, Administrative Operations (General Affairs Division, Accounting and Finance Division, G-Core Project, Audit Office, Personnel Management and Industrial Relations Division), Legal and Intellectual Property Operations, IT Operations and Logistics Operations.

・Pursuant to the organizational reform, previously fragmented functions will be reclassified based on service recipient clusters and consolidated into six divisions (32 departments) with clearly defined missions.

1) Corporate Planning Division
Corporate Planning Division is charged with planning, promoting and evaluating companywide strategies toward attaining sustainable growth and increased corporate value for the Company. Among other key issues, its strategic mission encompasses management, growth, innovation and corporate governance, all from a globalization and consolidated management medium to long-term perspective. The Corporate Planning Division consists of the First Department and Second Department, and integrates some or all of the companywide management strategy functions of the former Corporate Planning SG, General Affairs Division and Brand Promotion Division.

2) Corporate Communication Division
Building strong relationships with customers and society worldwide to increase customer satisfaction, fulfill the Company’s corporate social responsibilities and raise corporate value is the objective of the Corporate Communication Division. It consists of the Environmental Affairs Department, Sports Promotions Department, Public Relations and Administration Department, Advertising and CRM Department, Customer & Market Information Department and Tokyo Office, and integrates some or all of the customer- or society-related functions of the former CCS Management Division, Public Relations Division, Customer Relations Division, Tokyo Office, General Affairs Division and Personnel Management and Industrial Relations Division.

3) Human Resources Development Division
The Human Resources Development Division serves the employees of the entire Yamaha Motor Group. Its objective is to develop human resources, the source of the Company’s competitive edge in its business operations, and to plan and implement global personnel policies that help create a dynamic corporate culture. The Human Resources Development Division consists of the Global Personnel Department, Employee Relation Department, Human Resources Development Department, Health & Safety Department, and the Secretary Department, and integrates some or all of the human resources-related functions of the former Personnel Management and Industrial Relations Division, General Affairs Division and CCS Management Division.

4) Finance & Logistics Division
Facilitating finance and product logistics for the entire Yamaha Motor Group, the Finance & Logistics Division plans and executes strategies to realize a healthier financial standing and more efficient logistics worldwide. It consists of the Finance Strategy Department, Consolidated Management Support Department, IR & Corporate Finance Department, Financial Auditing Department, Logistics Department, Logistics Planning Department and G-Core Project, and integrates some or all of the asset, product and fund-related functions of the former Corporate Planning SG, General Affairs Division, Accounting and Finance Division, G-Core Project, Legal and Intellectual Property Operations, Audit Office and Logistics Operations.

5) Legal & Intellectual Property Division
The Legal & Intellectual Property Division is responsible for the legal and intellectual properties of entire the Yamaha Motor Group. It works to improve the value of intellectual properties, manages brands and conducts risk management related to product liability and other legal issues, all toward the ultimate objective of raising the Company’s corporate value. The Legal & Intellectual Property Division consists of the Legal Department and Intellectual Property Department, and integrates some or all of the functions of the former Legal and Intellectual Property Operations and Brand Promotion Division.

6) Process & IT Division
The Process & IT Division serves the information technology needs of the entire Yamaha Motor Group by planning and executing IT strategies that promote business process re-engineering and support precise and quick management and business decision-making. The Process & IT Division consists of the IT Strategy Department, Business Solution Department, Engineering & Manufacturing Solution Department and IT Infrastructure Department. Functionally, it is a successor to the former IT Operations.

As part of the effort to address key issues ahead, a “CSR Supervisory Office” is being established. The goal of the Office is to leverage past achievements and increase collaboration in the area of CSR (Corporate Social Responsibility) across the entire the Yamaha Motor Group. Also, a Cross Functional Team (CFT) can be formed whenever necessary to advise the Management Committee on action plans to resolve key companywide or business-specific strategic management issues.

・The basic organizational unit in headquarters administrative operations will be called a Division, and the divisions’ managers will be called Division Managers. Each Division will have sub-departments, whose managers will be called Department Managers or Office General Managers.

・In order to facilitate quick decision-making and a clear definition of the lines of authority, management depth throughout the Company will be standardized to three layers.