GM Release Re Isuzu

FOR RELEASE: October 25, 2002

Isuzu Restructuring

TOKYO – General Motors confirmed today that it had finalized details on agreements with Isuzu Motors Ltd. relating to Isuzu’s previously announced three-year business plan.

In addition to the GM agreements, Isuzu announced that it had reached agreement on broad financial restructuring with its banks including Mizuho Corporate Bank.

GM, Isuzu and the banks expect to finalize all transactions by calendar-year-end.

The principal components of the Isuzu restructuring package include the following:

As announced in August, GM will acquire majority ownership of two Isuzu engine subsidiaries and other specific assets strategic to GM for about Y50 billion (U.S.$420 million). GM will nominate a senior executive as co-representative director and executive vice president of Isuzu to support Isuzu management. Isuzu will retire GM’s existing equity in Isuzu Motors, and GM will purchase new equity for about Y10 billion (U.S.$80 million), representing a 12-percent ownership stake.

Isuzu also reached preliminary agreements with its banks on a broad financial restructuring. This includes: a debt-to-equity swap in which Y100 billion (U.S$833 million) of Isuzu debt would convert to preferred equity; new funding from lenders sufficient to execute the operational plan; and the rollover of certain of Isuzu’s current debt.

A comprehensive operational restructuring under which Isuzu will rationalize under-performing operations, reduce overall employment levels and restructure its sport utility vehicle business in North America.

General Motors participation

Under the restructuring proposal, GM will spend a total of Y60 billion (U.S.$500 million). Of this total expenditure, about Y50 billion (U.S.$420 million) will be used to acquire a majority interest in certain of Isuzu’s diesel engine businesses and complete ownership of Duramax, Circle L 1.7-liter and V-6 diesel engine technologies. This includes an acquisition of a 60-percent interest in Isuzu Motors Polska Sp. Z.O.O (Ispol), Isuzu’s small-displacement diesel engine business based in Poland, and an increase in GM’s equity investment in the U.S.-based DMAX Ltd. heavy-duty diesel engine business from 40 to 60 percent. GM also will acquire a majority interest in a new diesel engine engineering joint venture with Isuzu as well as rights to use various related technologies.

GM, which wrote down the value of its 49 percent investment in Isuzu to zero in the second quarter of 2001, will have its existing equity in the company retired as part of Isuzu’s financial restructuring plan. GM will then purchase about Y10 billion (U.S.$80 million) of new equity in the company, leaving GM with a 12-percent ownership stake in Isuzu Motors.

Finally, GM and Isuzu have agreed to name Basil N. Drossos, Co-Representative Director and Executive Vice President in charge of Finance, Corporate Planning and Human Resources.

Drossos, currently GM AP Vice President of Vehicle Sales, Service and Marketing and with responsibilities for GM in India, brings extensive experience and knowledge of Isuzu to his new assignment, both through his current position and through his years in senior management with GM’s Latin American operations. Drossos will support Isuzu President Yoshinori Ida in assuring the successful implementation of Isuzu’s new three-year business plan.

The implementation of the Isuzu restructuring plan is dependent upon receiving approval from Isuzu’s stockholders and finalization of documents.