Westport Announces Updated Plan, Goals for Fiscal 2004, and Related Business Restructuring

VANCOUVER, April 7 -- Westport Innovations Inc. (TSX: WPT) today announced its updated business plan, its goals for fiscal 2004, and related business restructuring.

As a result of the strategic and operational decisions that have been made through the business planning process, Westport and Cummins Westport will reduce their combined workforce by about 25 employees (or 10%) over the next quarter. Operational cash consumption in fiscal year 2004 will be reduced by at least 30% compared to fiscal year 2003.

Westport and Cummins Westport are also reviewing the structure of the organizations, including senior management positions, to ensure the present capabilities match the business needs moving forward. These changes will take place over the coming quarter.

These changes will result in a total restructuring charge of approximately $1.2 million, all of which will be recognized in Westport's fourth quarter, fiscal 2003 financial statements for the period ended on March 31, 2003.

"Westport and its joint venture, Cummins Westport, are at an important stage of their development as they continue to transform themselves into commercial companies. We are focused on ensuring that the launches of our core engine products in Cummins Westport are on schedule to meet the growing global demand for clean, efficient natural gas engines," said David Demers, Westport's President and Chief Executive Officer. "In addition, we are continuing to aggressively grow the sales of our existing Cummins Westport commercial engines, meet our development commitments with other engine manufacturers, and obtain sources of technology development funding, while managing our businesses in a prudent, disciplined, and sustainable financial manner."

Through the review of the Company's business, management has prioritized the longer-term strategic product development opportunities that it is currently investing in. These include the Cummins Westport QSK H engine program for power generation, the Isuzu program for Japanese delivery trucks and the MAN program for European heavy-duty trucks and buses. These programs are all seen as robust business opportunities and are meeting their program schedule and goals. Recognizing that Westport and its partners have not fully committed the resources necessary to move these programs through commercial launch, management has placed a high priority on obtaining the necessary financial resources to successfully pursue these opportunities. Over the coming year each of these programs will be managed within the financial resources available to them.

"Westport is not immune to the external environment and we must operate our business within the fiscal constraints that exist," said Westport's Chief Operating Officer Michael Gallagher. "We have reviewed our operations for changes and improvements that will enhance our speed and efficiency, mitigate risk, and reduce our cash consumption while maintaining our momentum. We believe that our resources, in combination with the restructuring and focusing of our operations announced today, will be sufficient to fund our activities beyond the commercial introduction of our key engine products in calendar 2004."

Westport's strategy is focused on developing its business through the following three primary objectives:

  -    Manage our transition from a development company to a growing,
       profitable business;
  -    Diversify our markets through expanded geographic coverage, new
       customer segments, new strategic partners, and the launch of both
       new and improved products; and
  -    Expand Westport's technological leadership in the area of clean
       gaseous fuels for engines.

Cummins Westport President Hugh Foden stated, "Our ISX G heavy-duty truck engines are undergoing extensive field-testing today and we see the development of significant market opportunities for this engine. We have chosen to apply additional focus and resources to this program to reduce the normal risk associated with its launch schedule. As a result we will be rescheduling the ISM G engine program to a future date to allow the concentration of effort on the larger ISX G engines. This will also result in significant savings of both labor and materials costs this year."

  Cummins Westport's goals for the fiscal year ending March 31, 2004 are:
  -    Grow sales in North America and China to achieve significant revenue
       growth over fiscal 2003;
  -    Maintain the introduction schedules of new CWI engine products,
       including the B Propane Plus, the 400 horsepower and the 450
       horsepower versions of the ISX G and the L Gas Plus;
  -    Expand international business opportunities in the Americas, Europe
       and Asia; and
  -    Further develop local manufacturing relationships to enable enhanced
       future penetration of the Indian and Chinese engine markets.

John Wall, Vice President, Chief Technical Officer for Cummins Inc., commented, "We are focused on providing our global customers with the very best engines available using diesel or natural gas fuel, and we view the Cummins Westport technology as the best approach for power and efficiency for natural gas engines for both transportation and power generation products. We see significant opportunities for natural gas engines worldwide and, through our global distributor network, we can access growth markets in China and the rest of Asia with Cummins Westport products."

Westport's President and Chief Executive Officer David Demers concluded, "The updated business plan and related actions places Westport on a road to a sustainable future as the pre-eminent supplier of clean gaseous-fueled engines to global markets."

  Westport has scheduled a public conference call for Monday, April 7, 2003
  at 9 am (Pacific Time) to discuss the fiscal 2004 outlook. To access the
  conference call by telephone, please call either 877-211-7911 (Vancouver)
  or 416-405-9310 (Toronto) no later than 8:55 am (Pacific Time) on April
  7. Alternatively, the web cast of the conference call can be accessed
  through the Westport web site at www.westport.com by following the link
  on the investor information menu. Replays will be available in streaming
  audio shortly after the conclusion of the conference call.

Note: Information provided and statements in this news release and on the conference call that are not purely historical are forward-looking statements expressing Westport's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that Westport's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to general economic conditions, business and financing conditions, labor relations, government action, competitor pricing activity, expense volatility and other risks detailed from time to time in the company's filings with regulatory authorities.