Hitachi, Ltd. (TSE:6501) today announced that the current Elevator & Escalator Group is to
be reorganized in line with the "i.e.HITACHI Plan," Hitachi's Medium-term Business Plan
aimed at optimizing consolidated capabilities as a solutions-provider. The reorganization, to
be implemented from April 1, will create a new Building Systems Group with the
consolidated capabilities needed to strengthen competitiveness in the core business of
elevators and escalators and to establish itself as a provider of total systems encompassing all
aspects of building management from building security to cleaning and infomation services.
In parallel, sales and technical support operations, currently spread over a number of
Hitachi, Ltd. branch offices and Hitachi Elevator Engineering Co., Ltd., an Elevators &
Escalators Group affiliate, will be consolidated under the Building Systems Group sales
division, while design and manufacturing operations related to elevator and escalator
reconditioning will be consolidated under the Group's Mito Headquarters for Elevator and
Escalator Operations.
In a related move scheduled for July 1, Hitachi plans to consolidate five companies
engaged in elevator and escalator production in Hitachinaka City into a single company called
Hitachi Mito Engineering Co., Ltd.
Since the start of Hitachi's new management system in April 1999, the Elevators &
Escalators Group has been operating as an essentially independent company with
considerably expanded authority it has used to upgrade operations both qualitatively and
structurally. Reforms implemented include the building of an integrated management system
encompassing Hitachi Building Systems Co., Ltd. and other affiliated companies,
reinforcement of the sales and development systems, and the launching of a Group IT
strategy aimed at computerizing sales operations and shifting toward digital factories using
CAD as a central technology in development, design and production.
Under the "i.e.HITACH Plan" introduced in November 1999, the Elevators &
Escalators Group has also put in place a sweeping program for achieving consolidated Group
sales of \300 billion by fiscal 2002. This calls for boosting product competitiveness, early
development of new products and technologies, development of new businesses, and
expansion of overseas operations. One focus of new business development is information
services utilizing Hitachi Building Systems' nationwide network of 320 service stations and
"24-Hour/365-Day" control centers.
The Elevators & Escalators Group markedly reinforced its potential to expand service
operations and information services by acquiring 90% of the outstanding stocks of Seishin
Service Co., Ltd. and a 33.3% share of BRAIN Co., Ltd. in November and December 1999.
Seishin Service has advanced know-how in retail store and other building management and
BRAIN is a leading player in Japan's direct marketing industry, with strong capability in the
area of Internet promotion expected to become the core medium of future telemarketing.
The reorganization calls for restructuring of sales and production systems Hitachi-wide,
including affiliates, and is directed at achieving highly efficient management for enabling the
Group to reestablish itself as a general provider of building products and services.
The new name, Building Systems Group, is intended to symbolize this vision.
Sales and technical support operations now managed by several Hitachi, Ltd. branch
offices and Hitachi Elevator Engineering will be consolidated under the Building Systems
Group sales division.
Design and manufacturing operations related to elevator and escalator reconditioning,
currently handled by Hitachi Elevator Engineering, will be consolidated under the Building
Systems Group's Mito Headquarters for Elevator and Escalator Operations.
Overlapping areas of responsibility will also be eliminated to improve efficiency. For
this, on July 1, Hitachi Elevator Engineering Co., Ltd., Hitachi Mito Engineering Co., Ltd.,
Mito Elevator Products Co., Ltd., HIMEC Service Co., Ltd., and BUILDING TECHNOS
IBARAGI Co., Ltd., all Hitachinaka City-based companies engaged in elevator and escalator
production, will be consolidated into a single company, Hitachi Mito Engineering Co., Ltd.
Following the reorganization, the Building Systems Group will have around 16,000
employees (consolidated basis). Detailed strategies for the planned move into new
information and service businesses are currently under study and will probably involve a shift
of about 300 personnel from the production divisions.
Outline of the Companies
Hitachi Mito Engineering Co., Ltd.
Head Office: 832-2 Horiguchi, Hitachinaka-Shi, Ibaraki, Japan
Establishment: July. 1, 2000
Capital: 330 million yen
(Hitachi, Ltd.: 62.5% ,Hitachi Building Systems Co., Ltd, : 37.5%)
Business: Manufacture and sale of Home elevators and small elevators, quality
assurance of elevators and escalators, participate in all businesses
related to the aboves.
Sale target: 9 Billion yen(for the year ended Mar. 31, 2001)
No. of Employees: 900 at startup
Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global
electronics companies, with fiscal 1998 (ended March 31, 1999) consolidated sales of
7,977 billion yen ($65.9 billion*). The company manufactures and markets a wide range
of products, including computers, semiconductors, consumer products and power and
industrial equipment. For more information on Hitachi, Ltd., please visit Hitachi's Web
site at http://www.hitachi.co.jp.
* At an exchange rate of 121 yen to the dollar.
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