Hitachi turnaround involves new president, split-off
updated 04:10 pm EDT, Mon March 16, 2009
Hitachi replaces president
Hitachi turn around involves new president, company split Hitachi on Monday announced it has named a new president to head up the company's turnaround plan to return to profitability. According to Monday WSJ report, Takashi Kawamura, a 47-year senior at the company who is 69, will replace Kazuo Furukawa in April. At the same time, the company will split up its automotive supply and consumer television operations. About two months ago, Hitachi announced the biggest loss ever among Japanese manufacturing companies and is expected to post a 700 billion yen ($7.1 billion) loss for the year at the end of March. The loss-making businesses will be made into wholly-owned subsidiaries but become independent in July.
Names and other details for the new spun-off companies are not yet known, though they will both have a more evident accountability for making profits. The smaller companies will also be able to make quicker decisions, thereby more efficiently serving their indented markets.
The new automotive company is expected to retain the division's 7,600 workers and annual sales of 280 billion yen ($2.84 billion). The focus of the new company will be on automotive systems for environmental and safety purposes. This includes lithium-ion battery, inverters, motors and related hardware used in hybrid vehicles. Advanced engine technologies that include direct fuel injection, variable valve actuation and other systems will also be focuses.
In the safety field, Hitachi will further development of its outside recognition tech for detecting environment outside of vehicles. The company will also supply braking, steering and suspension hardware. Unprofitable automotive operations will be ceased and plants closed, production outsourced and production lines integrated as alliances, all to reduce costs and make production more efficient.
The consumer TV business will have about 750 workers and account for 160 billion yen ($1.62 billion) in yearly sales. Cost savings will come, among other factors, from sourcing HDTV panels from Panasonic instead of building them in-house. The new company will also aggressively pursue collaborations with partners to enhance profits.
The latest announcement is part of a larger restructuring program introduced at the start of the year that includes eliminating 7,000 jobs and cutting 500 billion yen ($5 billion) in costs.
