Hitachi to cut $5.1 bn in costs, changes management

Hitachi to cut $5.1 bn in costs, changes management
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First Published: Mon, Mar 16 2009. 12 33 PM IST
Updated: Mon, Mar 16 2009. 12 33 PM IST
Tokyo: Hitachi Ltd said on Monday it would spin off its automotive system and consumer business units and appoint the head of its plant technology firm as president, in a bid to turn around its battered operations.
Hitachi, Japan’s biggest electronics maker, is expecting a loss of ¥700 billion ($7.1 billion) — the biggest ever by a Japanese manufacturer — for the year to 31 March due mainly to its struggling chip operations and a slump in demand for electronics products.
With a target to cut $5.1 billion in costs next business year, the company said Takashi Kawamura, chairman of Hitachi Plant Technologies, will become its president and chairman in April, and current president Kazuo Furukawa will become vice chairman.
Takeo Miyamoto, a senior analyst at Deutsche Securities, took the management shuffle coolly, saying a shift in leadership alone would probably not change Hitachi’s sprawling empire as the global recession damages most of its operations.
“You could say the appointment is an acknowledgement of the importance of heavy industry to Hitachi’s business,” he said.
“But will this change anything? We’re talking about a conglomerate that spans many different kinds of businesses. It’s hard to imagine one person changing things immediately in a group that is pulling in many different directions at once.”
After it spins off the automotive system and consumer businesses in July, Hitachi said it would focus on auto systems related to the environment and safety, while using partnerships for products such as optical disk drives and moble phones.
Ahead of the announcement, Hitachi shares closed up 4.0% at ¥263, outperforming a 1.8% rise in the Nikkei average.
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First Published: Mon, Mar 16 2009. 12 33 PM IST