Hitachi Reorganizes to Grow Construction Equipment Business

Three Hitachi excavators parked inside an industrial building
The new business units will be organized around machine size and markets.

Starting April 1, Hitachi Construction Machinery will employ a new business unit system aimed at sustainable growth and accelerating the resolution of customer issues. The new system is based on business units organized by customer type and product size and will integrate design, manufacturing, sales and services.

In the new business unit-based organization, operations will be conducted under a matrix structure supported by functional divisions, such as those responsible for development strategy and quality assurance, as well as corporate divisions responsible for general affairs, finance and legal.

The restructuring has been in the planning stages since September 2018 when the company announced its intention to undergo a major domestic overhaul to strengthen global competitiveness. By incorporating the new operational structure into the company, Hitachi Construction Machinery aims to strengthen the products and services business and expand the solutions business.

Under the plan, five business units will be established.

  • The construction business unit will handle medium and large machinery for general construction sites.
  • The mining business unit will handle ultra-large mining machinery used in the mining and transport of resources such as iron ore.
  • The compact business unit will handle small construction machinery for urban civil engineering work and for the agriculture and forestry industries.
  • The parts and service business unit.
  • The rental and used machine business unit.

Each business unit will be set up under the direct control of the president and CEO, and the president of each business unit will be responsible for the profitability and sustained growth of the business. In addition, a new business-creation unit will be established with the aim of generating and growing new business. The new business-creation unit will strive to expand the solution business by pursuing collaborative creation with other organizations including customers, research institutions, companies and promising start-ups.

The organizational changes associated with the introduction of this business unit system will apply only to Hitachi Construction Machinery. The consolidated business performance results will continue to be reported by business segment (construction machinery business and solution business).

As of April 1, the new organizational chart includes:

  • Kotaro Hirano, president and CEO
  • Construction business unit: Yusuke Kajita, vice president and executive officer
  • Mining business unit: Sonosuke Ishii, senior vice president and executive officer
  • Compact business unit: Ichimura Kazuhiro, president of Hitachi Construction Machinery Tierra
  • Spare parts and service business Unit: Eiji Fukunishi, executive officer
  • Rental and used machine business unit: Hidehiko Matsui, executive officer and CMO
  • New business creation unit: Hideshi Fukumoto, vice president and executive officer

This rollout is one of many organizational changes Hitachi has announced since the company agreed to terminate its joint venture relationship with John Deere in August. Ties between the two companies were officially cut as of February 28, 2022. Going forward, Hitachi will supply Deere with excavators, components and parts under a new OEM supply agreement for the foreseeable future.

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The first Hitachi-built excavator from Tsuchiura Works in Japan arrived on U.S. soil on January 11. Since then, Hitachi has been training its sales personnel in preparation for the launch of the company’s independent sales and service network on March 1.

In addition to excavators, the company has been shipping compact machines, service parts and mining equipment for delivery to dealers across the U.S. and Canada. Hitachi has secured new contracts with small to intermediate dealers throughout North, Central and South America for construction equipment and multi-region dealers for mining equipment.