Orbital Announces Board Changes and Major Reorganisation

PERTH, Australia, May 26 Orbital Engine Corporation today announced that following a detailed review of operations by the Board and CEO, Peter Cook, a series of Board, management and operational changes, including a level of staff reductions, have been put in place.

These changes, which were foreshadowed last week, are part of the Company's campaign to be cash neutral next financial year, to be more commercially focused and to reflect the Company's progression from a phase of research and development to one of commercialisation of its air assisted direct injection fuel system. The reorganisation will result in a company of a reduced size and well-equipped to support its commercialisation pipeline.

The Board has determined that a complement of five members is now a more appropriate scale for its own activities and accordingly three long standing Board members, Kim Schlunke, Alan Castleman and Robin Forbes, have retired with immediate effect.

Orbital Chairman Mr Ross Kelly paid tribute to the Board members stating that, "All have contributed significantly to the business and it has been a great pleasure to have served with such a committed Board. I would particularly like to thank former CEO Kim Schlunke who has contributed much to Orbital's technical innovation and getting the first products into market." Mr Schlunke has also resigned from his executive position with Orbital although will be available to complete certain projects for the Company.

Orbital also announced it will strengthen the delivery of its engineering resources with the appointment of Dr Rod Houston to the newly-created position of Director of Engineering. Dr Houston, with 14 years of international industry experience, will focus on advancing and delivering Orbital's technology as well as increasing professional engineering contact with customers.

Ramon Newmann will head Orbital's Automotive division and operate in close proximity to the major customers out of Orbital's small UK office. After several years experience in Europe, Mr Newmann has developed a close working relationship with major customers and suppliers in the automotive sector.

Deana Cesari will head Orbital's Marine and Recreation Division, filling the vacancy created by the appointment of Mark Norman as President of Synerject, Orbital's 50:50 joint venture with Siemens VDO Automotive. Orbital's CFO, Keith Halliwell, will join the Synerject Board. John Beech will take up the position of Commercial Director, Marine and Recreation and will be based out of Orbital's US offices in Virginia, USA. The changes reflect the closer working relationship between the businesses in accessing the non-automotive market and point to a more streamlined operation overall.

Thirty-five staff members, predominantly from engineering but also from administration, finance and management, have accepted redundancies. Orbital retains 140 staff world-wide and is now appropriately sized to meet its forecast level of activity.

Mr Cook said, "I wish to express my appreciation to all staff for their efforts and contribution. The personal impact on the individuals and families directly involved is distressing but an essential part of the steps needed to meet our commitment to shareholders and maintain our focus on, and accountability for, profit in all business areas."

"We must ensure that Orbital has the financial and human resources necessary to convert a number of opportunities available to it in the automotive, marine, recreational and motorcycle markets. The steps we have taken over the past few days were necessary to ensure that we achieve this goal."

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.