Orbital Announces Staff Reductions to Save $2 Million

PERTH, Australia, Jan. 16 /PRNewswire-FirstCall/ -- Orbital Engine Corporation today announced staff reductions to better align its capabilities with future business opportunities.

Thirty-seven technical and support staff have been affected, generating an annualised saving of approximately $2.0 million.

This realignment is in response to weak trading conditions in the half-year ended 31 December 2001 as well as evolving customer requirements. In particular, the demand for activity such as the fabrication and testing of engine prototypes has declined in favour of higher value engineering consultancy and computer-based engineering design.

The latest staff reductions follow an earlier round of cost-cutting measures, implemented in mid 2001 that are generating annual savings of approximately $4.0 million.

The total cost of the latest measures is approximately $1.0 million. All anticipated costs have been taken into account in the results outlook for the half-year ended 31 December 2001 provided to the Australian Stock Exchange on 19th December.

In expressing his concern for the personal impact on employees caused by these restructurings, Peter Cook, Orbital's recently appointed CEO, commented that the Company must be continually committed to cost containment and improved efficiency at all levels of the organization.

Orbital is a leading international developer of engine technologies using direct in-cylinder fuel injection and lean-burn systems for enhanced fuel economy and lower emissions. The company serves the worldwide automotive, marine, recreational and motorcycle markets. Headquartered in Perth, Western Australia, Orbital stock is traded on the Australian Stock Exchange (OEC), the New York Stock Exchange (OE) as well as the Berlin (ORE) and Frankfurt (OREA) Exchanges.