High-tech giant Hitachi Ltd. said on March 16 that it was replacing its president and splitting off its consumer electronics and automotive systems businesses as it braces for a massive loss. Hitachi said the revamp would speed up decision making, boost efficiency and enable it to fuse its automotive and electronics technologies.
It named Takashi Kawamura, 69, who currently heads two of its subsidiaries, as its new president, chief executive and chairman. Kawamura is currently chairman of Hitachi Plant Technologies Ltd. and Hitachi Maxwell Ltd. Hitachi said its current president and CEO, Kazuo Furukawa, would become a vice chairman, while chairman Etsuhiko Shoyama would become a director.
"The world and Japanese economies are standing at a significant crossroad, and this unprecedented business environment will continue," Kawamura told a news conference. "No company can run away from the impact," he said. "My mission to revive Hitachi is not easy. We would like to meet our stakeholders' expectations by making swift decisions and taking swift action."
Kawamura said he wanted to focus on the social infrastracture sector, particularly energy generation technologies. "We are going to put more emphasis on nuclear power than ever," he said.
The group will hive off its auto systems business, which makes products including rechargeable lithium-ion batteries, and the consumer electronics arm, which includes flat-panel televisions, into separate companies in July. The two units, which are expected to suffer sizable losses in the year to March, will be wholly owned Hitachi subsidiaries.
The global economic downturn has inflicted heavy damage on the electronics and engineering giant, which is cutting up to 7,000 jobs as it braces for a 700-billion-yen (US$7.1 billion) loss in the year to March.
Hitachi said that it aimed to cut costs by 500 billion yen in the next financial year starting in April, warning that an increase in revenue was "unlikely for the foreseeable future" because of the global economic slowdown.
Copyright Agence France-Presse, 2009