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TRW Outlook Revised to Negative by S&P

7 October 1998

TRW Outlook Revised to Negative by S&P; Ratings Affirmed

    NEW YORK, Oct. 6 -- Standard & Poor's today affirmed its
single-'A'/'A-1' corporate credit ratings on TRW Inc.  Standard & Poor's also
affirmed its single-'A' senior debt rating and its 'A-1' commercial paper
rating on the company.  The outlook was revised to negative from stable.  The
outlook revision reflects recent comments by TRW's CEO regarding potential
strategic actions the company is considering to enhance shareholder value, and
pricing pressures in the company's automotive business.  The CEO indicated
that TRW might consider splitting its automotive business from its space,
defense, and information technologies business or selling parts of either
business.
    TRW currently provides products and services with a high technology or
engineering content to the automotive, space, and defense markets.  The
automotive segment accounts for about 59% of sales.  Within the automotive
group, TRW produces occupant safety systems, steering and suspension systems,
and other electronic and engine components.  The space and defense business
consists of various satellite and defense systems, space and defense related
electronics, and systems integration and information technologies.  The
automotive business has been experiencing profit pressures during the past
year and is currently being restructured to improve operating performance.
Restructuring actions underway include closing several plants and cutting
staff and overhead expenses.
    The ratings assume that these actions will lead to improved operating
margins during the next two years.  The ratings also incorporate an
expectation that debt leverage will decline over the near to intermediate
term.  Debt levels increased late last year when TRW acquired BDM
International Inc. for close to $1 billion.  Debt to capital, which is
currently in the mid-50% area, is expected to decline to 40% during the next
year or two.

    OUTLOOK: NEGATIVE
    Should the company undertake any actions that would lead to a weakening
of its business or financial profile, ratings may possibly be lowered.  In
addition, continued margin declines in the automotive business could lead to a
ratings review, Standard & Poor's said. -- CreditWire