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BEI Electronics Division Enters Strategic Agreement With Major European Automotive Systems Supplier

2 September 1997

BEI Electronics Division Enters Strategic Agreement With Major European Automotive Systems Supplier

    SAN FRANCISCO, Sept. 2 -- BEI Electronics, Inc.
announced that its Systron Donner Inertial Division (SDID), a
unit of BEI's Sensors & Systems Company, has entered into a five-year
strategic agreement with a major European automotive systems supplier,
according to Charles Crocker, chairman, president and CEO of BEI Electronics.
    The agreement calls for SDID to develop and supply special BEI GyroChip(R)
devices, implemented as state-of-the-art yaw rate sensors, for automotive
stability systems.  Production shipments for this contract will begin later in
1997 for use in model year 1998 vehicles.  The contract is expected to
generate in excess of $50 million in revenues over the next five years for the
Systron Donner Inertial Division.
   Crocker said, "We regard this contract as strategically important for BEI
Electronics because of its size and the breakthrough into the European
automotive market.  In addition, we believe it validates the investment our
company made in developing our GyroChip family of micromachined quartz sensors
for the commercial market.  With this contract, Sensors & Systems and SDID
have executed the strategy developed four years ago -- to diversify from a
primarily U.S. aerospace and defense business to a global company --
emphasizing a strong presence in commercial markets."
    This is the second major automotive contract for SDID.  The division
currently supplies GyroChip sensors to General Motors for certain 1997 and
1998 Cadillacs and for 1998 Corvettes.  The BEI sensor will be used on a
variety of vehicles by many manufacturers both in Europe and the United
States.
    BEI Electronics, Inc. is a diversified technology based manufacturing
company which operates two principal businesses: 1) BEI Sensors & Systems
Company, an established manufacturer of technically advanced electronic
components and systems used in industrial, automation and automotive,
military, aviation and space systems and 2) BEI Medical Systems Company, an
emerging manufacturer of diagnostic and therapeutic products focused on
gynecology and women's health issues.  On July 2, 1997, the Company announced
its plan to form a new company called BEI Technologies which will principally
operate BEI's sensors and systems business.  The Company plans to distribute
shares in the new company pro-rata to all holders of BEI Electronics, Inc.
common stock.  The distribution is expected to occur at the end of September.
    Except for historical information, this news release may be deemed to
contain forward-looking statements that involve risks and uncertainties,
including timely development, acceptance and pricing of new products; impact
of competitive products and pricing; the ability to manufacture products in
sufficient volume on an efficient and timely basis; general economic
conditions as they affect the Company's customers, as well as other risks
detailed from time to time in the Company's SEC reports, including the report
on Form 10-K for the year ended September 28, 1996, and the registration
statement on Form 10 to be filed by BEI Technologies.

SOURCE  BEI Electronics, Inc.