Foundation: 1910
Headquarters: Chiyoda Ward, Tokyo
President: Toshiaki Higashihara
Executive Summary: Hitachi is a highly diversified company that operates in a wide variety of business segments, including telecommunications, financial services, power systems, electronics, transportation, and digital media. The company’s origins date back to 1910 when founder Namihei Odaira began operating an electrical shop in a copper mine northeast of Tokyo. The name Hitachi is derived from the name of the town where Odaira made his first sale. Namihei repaired the machinery at the mine and began experimenting with his own electrical designs. Later in the year, he produced the first domestically manufactured five horse power electric motor. In fact, this motor was far superior to competing imports in durability and efficiency. Early on, Hitachi focused on heavy electrical equipment and industrial machinery. Hitachi received a large boost in sales after the outbreak of World War I, when a large power company was unable to receive turbines from Germany. Soon after, other industrial companies in the same situation made purchases from the firm. Hitachi began acquiring other companies and became the country’s largest supplier of pumps, blowers, and other mechanical equipment. In 1924, Hitachi built Japan’s first electric train. In the years leading up to and during the Pacific War, Odaira was heavily pressured by the military to produce war materials, much to his dismay. Hitachi struggled to maintain independence and was forced to produce radar and sonar equipment for the Imperial Navy. The company did not manufacture any weapons however. Many of Hitachi’s factories were destroyed in Allied bombing raids, and initially US occupation forces wanted to disband the company completely. Due to these factors, Odaira was removed from leadership of the company. It took three years of negotiations to allow Hitachi to maintain its manufacturing plants. A labor strike in 1950 followed, creating further difficulties for Hitachi’s efforts to rebuild its business. However, the Korean War helped to reinvigorate the company with defense contracts offered by the US military. Odaira’s successor, Chikara Kurata, pushed the company into an era of market expansion, developing technology and making deals with General Electric and RCA. He initiated licensing agreements that allowed Hitachi to compete in the global market. One of the most important decisions made by the company was its investment in computer technology. Its first computer was built in 1957, and this became an important pillar of future business. Later, the company was to become the world’s largest producer of analogue computers, which were pivotal to the scientific research of that era. In the 1960s, Hitachi branched out into consumer goods, establishing their own line of household appliances. From around this time, the company began receiving substantial support from the Ministry of International Trade and Industry to help to narrow the competitive gap between Japan and the United States. In a negative development, the company faced a serious scandal in 1982 in which employees were caught buying technical secrets from IBM, which greatly impacted the firm’s public image. More recently, former Hitachi President Katsushige Mita reorganized the company with increased automation and investment into research and development. Today, Hitachi’s consolidated annual income is in the range of US$90 billion.
