AKEBONO REPORT 2011

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AKEBONO REPORT 2011 Akebono Brake Industry Co. Ltd. 5Akebono BrakeFukushima Manufacturing Co. Ltd.Brake linings(for the Japanese market)Akebono BrakeIwatsuki Manufacturing Co. Ltd.Disc brakesDrum brakesBrake components (pistons)Akebono BrakeYamagata Manufacturing Co. Ltd.Disc brake padsBrake liningsMiharu Branch Plant Akebono BrakeIwatsuki Manufacturing Co. Ltd.Akebono BrakeSanyo Manufacturing Co. Ltd.Wheel cylindersDrum brakesDomestic Production Structure(Operations appearing in boldface have been transferred)Reassembling the Domestic Production SystemIn response to the disaster we began transferring somebrake component manufacturing operations to other areas.Previously all drum brake linings were manufactured atFukushima Manufacturing. Now however approximately10% of the total production volume will be transferred toYamagata Manufacturing.Also we are considering transferring the productionof brake components for export already relatively low toregional facilities close to their intended markets for example to North America or to plants in either Indonesia orThailand for items presently exported to Asian markets. Weare striving to increase the manufacturing ratio at overseasplants in order to disperse the manufacturing functionwhile standardizing overseas plants to boost our costcompetitiveness.Furthermore in response to the possibleexpansion of the area of evacuation surrounding theFukushima Daiichi Nuclear Power Station the manufactureof pistons will be transferred from the Miharu Plant toIwatsuki Manufacturing by the end of August 2011.Because the Japanese automotive industry tends to beupstream-intensive the entire industry has been affectedby the earthquake. Also raw material prices have risen further and we anticipate upsets in the cost structure. We arethus shifting toward the standardization of our domesticproduction structure to enhance cost-competitiveness.akebono’s Post-Disaster ResponseImplementation of Seismic Simulation Disaster Drills and Anti-Seismic ReinforcementTOPICSAs part of our risk management efforts we regularly conductseismic simulations to discover and address problems.In our fourth such drill on December 15 2010 wesimulated an earthquake in the high sixes on the Japaneseseismic scale striking Fukushima Prefecture. The result wasextensive damage to facilities and infrastructure leading toproduction disruption and casualties. Based on this weestablished disaster task forces at Fukushima Manufacturing Ai-City headquarters and the Global Head Office setup satellite phones and audio- and teleconference systemsto report on the disaster situation and confirm safety ateach facility. Also the scenario posited that the head ofthe disaster task force was away on business so a seniormanaging executive officer and director was madedeputy head of the disaster task force.Simultaneously Ai-City conducted a disaster drillassuming that a large-scale earthquake had occurredin the Kanto area and all 739 employees moved to anevacuation area following routes broadcast through thein-house public address system.Since 2008 akebono has promoted anti-seismicreinforcement at each facility. Fukushima Manufacturingcompleted the seismic reinforcement work on its buildings including the dormitory on its premises on March10 2011.Simulated disaster task force (Global Head Office) Implementing disaster drill at Ai-City

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