ABC-NACO Enters Into Second Joint Venture in China.

Business Editors

LOMBARD, Ill.--(BUSINESS WIRE)--Aug. 7, 2001

ABC-NACO Inc. (ABCR) announced today that it has entered into an agreement to form an equity joint venture with its Chinese Venture Partner, Zhuzhou Rolling Stock Works in Hunan Province, China for the manufacture and sale of the ABC-NACO Swing Motion(R) design suspension systems and related components to the Chinese market. The Company expects to formalize the joint venture agreement within the next sixty days.

This new joint venture company will be located at the existing steel foundry of Zhuzhou Rolling Stock Works. ABC-NACO will own 40% of the joint venture with the balance owned by its Chinese partner. Based on the outstanding success of Swing Motion design technology in North America, along with the results of the dynamic performance testing in China, Zhuzhou projects that the Swing Motion truck could ultimately be used on 75% of the new freight cars in China. "We believe that the implementation of our advanced technology process at the Zhouzhou foundry combined with the superior performance characteristics of Swing Motion design technology places us in an excellent position for Chinese market penetration." said Vaughn Makary, President and Chief Executive Officer of ABC-NACO.

Prior to production of these advanced suspension systems commencing at the Zhuzhou Rolling Stock Works in China during the next year, Chinese orders for Swing Motion suspensions will be produced by ABC-NACO. An initial order for 300 carsets will be delivered by ABC-NACO to the Chinese market in October 2001; with the potential to supply up to 1,000 carsets in total.

Zhuzhou will be the second equity joint venture that ABC-NACO is involved with in China. Mr. Makary stated, "We have been very successful in our joint venture producing railroad wheels with our Chinese partner Datong Locomotive Works in the Shanxi Province. In a little over two years, the joint venture has about 50% of the total freight car wheel market. We believe the Chinese market has significant potential for our advanced technology products."

ABC-NACO is one of the world's leading suppliers of technologically advanced products to the rail industry. With four technology centers around the world, ABC-NACO holds pre-eminent market positions in the design, engineering and manufacture of high-performance freight car, locomotive and passenger suspension and coupling systems, wheels and mounted wheel sets. The Company also supplies railroad and transit infrastructure products and services and technology-driven specialty track products. It has offices and facilities in the United States, Canada, Mexico, Scotland, Portugal and China.

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, may be deemed to be forward-looking statements that are subject to change based on various factors which may be beyond the control of ABC-NACO Inc. Accordingly, actual results could differ materially from those expressed or implied in any such forward-looking statement. Factors that could affect actual results are described more fully in the Company's Amended Annual Report on Form 10-K for the year ended December 31, 2000, under the captions "Recent Developments" and "Regarding Forward Looking Statements," and other risks described from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.