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Orbital Consolidates US Operations

13 January 1999

Orbital Consolidates US Operations

    PERTH, Western Australia, Jan. 13 -- Orbital Engine
Corporation Ltd. today announced plans to consolidate all US
operations into the Synerject facility at Newport News, Virginia.  This move
will result in closure of the group's manufacturing facility in Tecumseh,
Michigan.  The closure will be a staged process ultimately resulting in the
sale of the facility.
    The Tecumseh plant was purchased by Orbital in 1989 to manufacture
pre-production runs of Orbital's two stroke direct fuel injected engine.  With
commercialization of Orbital's technology well advanced the requirement for a
low volume manufacturing facility no longer exists.  The manufacturing
function is now performed through Synerject, Orbital's joint venture with
Siemens Automotive, or directly by customers such as Texmaco.
    The Tecumseh closure follows the relocation of Orbital's facility in
Saginaw, Michigan to the Synerject site in Newport News, Virginia.  Once the
closure is complete, Orbital will have rationalized all US facilities and
manufacturing expertise into the Siemens high volume plant.  The move is
expected to generate cash in excess of US$6 million and produce ongoing annual
savings.
    Orbital's Chief Executive Officer, Mr. Kim Schlunke, paid tribute to the
remarkable contribution of the staff at Tecumseh in bringing the Orbital
Combustion Process technology into production in both automotive two stroke
and marine engines.  "The Tecumseh facility has been of immense value during
Orbital's path to commercialization.  However, with product now in the market
and the alliances in place with world class manufacturers such as Siemens, it
represents excess capacity, and resources that can be made available for the
growing marine and recreation business and the new opportunities with Texmaco
in Indonesia," said Mr. Schlunke
    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.