UCAR Announces Global Restructuring Plan.

DANBURY, Conn.--(BUSINESS WIRE)--Sept. 24, 1998--

Future Cost Savings Expected to Exceed $130 Million Annually

UCAR International Inc. (NYSE: UCR) today announced the adoption of a new Strategic Plan that targets permanent annual cost reductions of $80 million in 1999, $115 million in the year 2000 and $135 million in the year 2001. The Plan includes a one-time, 1998 third quarter non-recurring charge of $150 million (before tax) consisting of $45 million of cash expenditures and $105 million of non-cash asset impairments and write-downs. The new Strategic Plan results from an intensive review and analysis of all aspects of the business led by the Company's recently appointed President and Chief Executive Officer, Gilbert E. Playford. -0-

(Dollars in millions,
 except per share amounts)                    1999      2000         2001
                                            ----      ----         ----
Annual Savings (pre-tax)                     $80      $115         $135
Impact of Projected Savings
 on Earnings per Share (fully
 diluted, after-tax)                           $1.27     $1.86        $2.18

"The corporate strategy for enhancing shareholder value focuses on maximizing cash flow and generating growth in earnings," stated Mr. Playford. "We believe the best ways to achieve our business goal are to strengthen our competitiveness through operating and overhead cost reduction programs and to optimize our margins by plant rationalization.

"The Plan addresses the long-term goal of strengthening UCAR's position as a low-cost supplier to the steel and metals industry and responds to the near-term slowdowns in the global economies that are impacting UCAR's major customers in the electric arc furnace sector of the steel industry. The strategic initiatives of the Plan consist of rationalization of the Company's manufacturing operations, consolidation of administrative functions to reduce overhead and implementation of cost reduction programs to improve plant operating efficiency."

Plant Rationalization

In response to the global market conditions affecting the steel industry in general, and the electric arc furnace sector in particular, the Company has elected to reduce its graphite electrode manufacturing capacity by 30,000 metric tons. The Company believes that the reduction represents approximately four percent of the estimated western world graphite electrode manufacturing capacity and approximately 11 percent of UCAR's capacity. The reduction will be accomplished by permanently closing higher cost operations in Berlin, Germany and Welland, Canada and downsizing operations in Vyazma, Russia.

The Berlin, Germany extrusion facility, acquired by UCAR in February 1997, produces "green" graphite electrodes and employs approximately 70 people. The Welland, Canada facility, acquired by UCAR (then known as National Carbon Company) in 1917, is a fully integrated manufacturer of graphite electrodes with a capacity of 23,000 metric tons. It also manufactures carbon and graphite cathodes and employs approximately 280 people. The Vyazma, Russia facility, which originally employed 1,200 people in early 1997, will have approximately 600 employees when downsizing is completed. Its graphite electrode manufacturing capabilities will be reduced to 10,000 metric tons from 17,000 metric tons. Cathodes will be manufactured at the Company's plant in Columbia, Tennessee. The plant closures and downsizing are expected to generate annual savings of $24 million in 1999 and $33 million in the year 2000 and thereafter, for a one-time cash closure cost of $25 million and a one-time non-cash asset write-down of $91 million. The asset write-down includes an asset impairment for the Company's Russian facility of $61 million associated with the recent economic downturn in that region.

Mr. Playford commented, "The decision to close Welland, which has a 91-year history of operations, and Berlin was extremely difficult. We have an excellent workforce that has been dedicated to producing quality products and services for our customers. However, we believe these actions are necessary to maintain and expand the Company's low-cost supplier strategy. When global economies improve, as they will, we believe electric arc furnace steelmaking should return to its historical long-term compounded annual growth rate of four percent. The Company can incrementally expand the manufacturing capabilities of its many other facilities, when and as required, at a very low capital cost per ton, thereby generating a higher return on investment. For example, new "greenfield" graphite electrode manufacturing capacity currently requires an estimated initial investment of approximately $10,000 per annual ton of capacity while UCAR currently can incrementally expand its many facilities for an additional investment of less than 10 percent of that amount."

Until arrangements can be finalized, the Company will continue to work with local communities and employees during this transition period. The Company intends to offer employees a comprehensive package of severance pay, extended benefits and career planning services.

Consolidation of Administration

The Company will restructure its geographic operations into a cost center structure at all plant and country company locations. This realignment, together with the centralization and consolidation of administrative and financial services, targets additional cost reductions in general and administrative expenses by approximately 15 percent in 1999 and 23 percent in 2000. The consolidation of finance and other administrative functions, including accounting, treasury, information systems, accounts receivable/payable, purchasing and human resources, along with targeted outsourcing, will further eliminate unnecessary or inefficient work. This consolidation includes the centralizing of UCAR's European administrative activities in its Swiss subsidiary, UCAR S.A., and the relocating of its U.S. headquarters from Danbury, Connecticut to Nashville, Tennessee. The new corporate headquarters in Nashville will be centrally located near the Clarksville and Columbia, Tennessee electrode plants and will employ approximately 40 personnel for the worldwide operations.

The administrative cost reduction targets approximately $19 million in 1999 and at least $29 million in the year 2000 for a one-time cash charge of $20 million and a one-time non-cash asset write-down of $14 million. Permanent tax savings from UCAR S.A. are expected to generate $6 million in 1999 and $10 million in the year 2000, and to reduce the effective annual tax rate.

Plant Cost Reduction Programs

Continued focus on UCAR's low-cost supplier strategy has led to the development of more than 100 identified projects to improve plant operating efficiencies. These projects are expected to yield annual savings of approximately $30 million in 1999 and approximately $38 million in the year 2000 and thereafter, after initial capital expenditures of approximately $24 million. These projects relate to such areas as energy conservation, raw material substitution, yield improvement, reduction in labor by automation, maintenance savings and reduction in plant administration.

Asset Sales

The Company has decided to divest or joint venture its graphite specialties business since it is not considered to be in alignment with the Company's new strategic direction. The graphite specialties business generated $113 million in 1997 net sales. If this business is sold, proceeds from this divestment are expected to far exceed the cash cost of the 1998 third quarter write-off and the capital expenditures required to achieve the projected savings. -0-

Summary of Projected Annual Cost Savings
(Dollars in millions)                   1999           2000                  2001
Plant Rationalization                    $24            $33                   $35
Plant Cost Reduction
 & Raw Materials Savings             30             38                    39
Overhead Reduction                     19             29                    32
Interest Savings                      1              5                    17
Tax Savings                              6             10                    12
                               ========      =========             =========
              Total                    $80           $115                  $135
                               ========      =========             =========

Summary of Write-off
(Dollars in millions,
 except per share amount)
                             Cash Costs     Non-Cash Charge         Total

Plant Rationalization
 & Impairment                         $25                 $91                 $116
Overhead Reductions                  20                  14                   34
                           ===========================================
                                 $45                $105                 $150
                           ===========================================

"We expect that these savings will increase UCAR's cost competitiveness and result in greater efficiencies throughout our plants," Mr. Playford concluded. "The cash costs for the plant closures and overhead reductions of $45 million and capital expenditures of $24 million for plant cost reductions are expected to be financed from 1999 savings of $80 million."

Commenting on the 1998 financial performance, Mr. Playford stated, "We expect 1998 earnings per share to be in the range of $2.30 to $2.45, excluding any one-time charges mentioned previously, due to the continuing slowdowns in the global economies, which is lowering demand for steel and also graphite electrodes."

The Company plans to announce third quarter results on October 22, 1998.

UCAR International Inc. is the largest manufacturer of graphite and carbon electrodes in the world, with sales in more than 80 countries and manufacturing facilities on four continents. Graphite electrodes, the Company's principal product, are consumed primarily in the production of steel in electric arc furnaces, the steelmaking technology used by all "mini-mills," and for refining steel in ladle furnaces. The Company is also the leading producer of cathode blocks which are consumed in the production of aluminum. The Company also manufactures GRAFOIL(R) flexible graphite and other graphite and carbon products, as well as cooling systems and components for steelmaking furnaces and other high temperature applications.

NOTE: All cost savings and reductions described in this news release are based on comparisons to estimated amounts using 1998 data. This news release contains forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements include statements about such matters as electric arc furnace ("EAF") steel production, graphite electrode sales and demand, future operational and financial performance of existing and acquired businesses, legal matters, divestiture, joint venture, operating and capital projects, costs, cost savings and reductions, margins, and earnings growth. The Company has no duty to update such statements. Actual future events and circumstances (including future performance, results and trends) could differ materially from those set forth in such statements due to various factors. Such factors include the possibility that announced additions to EAF steel production capacity may not occur or that increased EAF steel production may not result in increased demand or prices for graphite electrodes, the occurrence of unanticipated events or circumstances relating to investigations by antitrust authorities in various jurisdictions or related antitrust lawsuits, securities lawsuits or shareholder derivative lawsuits, the assertion of other claims relating to such investigations or lawsuits or the subject matter thereof, the occurrence of unanticipated events or circumstances relating to recently acquired businesses, the occurrence of unanticipated events or difficulties relating to divestiture, joint venture, operating, capital, global integration and other projects, changes in currency exchange rates, changes in economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission. The statements contained in this news release shall not be deemed to constitute an admission as to any liability in connection with any claim or lawsuit.

For news releases via fax dial 1-800-239-5323. For additional information on UCAR call 1-203-207-7700.