Hitachi to relocate rail division to the UK

[Katada]

http://www.bbc.co.uk/news/business-26657455

Hitachi's transport businesses move to the UK could pave the way for a jobs boost in the future
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Japanese electronics firm Hitachi says it will move its global rail business from Japan to the United Kingdom.

The firm says it hopes the move will help it to expand the rail business to 4,000 workers from the current 2,500.

It plans to increase revenue from 2bn euros to 3bn euros ($4bn; £2.5bn) over the next few years.

Last July, Hitachi won a £1.2bn deal to make the next generation of inter-city trains in Newton Aycliffe, County Durham, where it is building a factory.

That will initially employ 750 workers when it opens next year.

The move is an unusual one for a Japanese company, and puts it geographically nearer to its main train-building rivals, such as Siemens of Germany.

The BBC's industry correspondent, John Moylan, also says it will boost Hitachi's British credentials in the wake of rows over rail contracts being awarded to foreign firms.

'Significant'
In a statement, the Government described the move as a huge vote of confidence in Britain, its workforce and its rail industry.

Hitachi manufactures everything from nuclear power plants to construction machinery to televisions; its rail division is relatively small, employing around 2,500 of Hitachi's 326,000 workers.

"Today's announcement is a significant sign of intent by Hitachi to grow its business in the rail market," said Alistair Dormer, chief executive of the global rail systems business.

"Both the UK and Japan remain important as markets for Hitachi Rail, and with our train factory in the North East of England now under construction, we will work to realise our export potential from the UK, expanding into Europe and emergent markets."

Last quarter, the firm reported profits of 126 billion yen ($1.2bn; £725m) for the three-month period to 31 December 2013.

 

[Johnuk123]

Bombardier will be pleased.

 

[RochdalePioneers]

Suggesting that they are going after European rivals. Isn't that an expensive way to undercut Siemens though? Build a carriage in Japan, ship it by sea and lorry to Heighington to be "built" then another lorry and sea journey to Europe

Sent from my Nexus 7 using Tapatalk

 

[trainplan1]

I imagine that if they are serious about competing long term for European business then it's a smart move to relocate.

Reminds me of how Japanese motorsport companies always suffered the same when trying to compete outside the domestic market. When they relocated or set up European bases it gave them a much easier working relationship and time to respond to demand.

 

[Clip]

Suggesting that they are going after European rivals. Isn't that an expensive way to undercut Siemens though? Build a carriage in Japan, ship it by sea and lorry to Heighington to be "built" then another lorry and sea journey to Europe

Sent from my Nexus 7 using Tapatalk

You could look at it that way and be a bit defeatist or you could look at it in a more positive light and say:

'Wow, if they are going to target more european business then in the future with other orders they could construct even more of the future trains in this country as it would be more cost effective and create even more jobs in the UK and the North East of England'.

All depends on how you look at it and the positive way is surely the best way isnt it?

The move is an unusual one for a Japanese company, and puts it geographically nearer to its main train-building rivals, such as Siemens of Germany.

Poor reporting that, I mean Honda and Nissan havent got any UK operations at all have they :/

 

[WatcherZero]

Car manufacturing is a bit different as a large amount of the costs are import duties and shipping so they do tend to have manufacturing facilities distributed within the different markets.

BBC over eggs the story but What they are doing is basing their global HQ/sales office in the UK while the Japanese Office will continue to manage Japanese operations. It doesnt entail significant jobs transfer.

Hitachi to Strengthen Leadership Team
to Drive Global Business Expansion in the Rail Systems Business

Hitachi to create a Global CEO Post to Oversee Global Strategies

Tokyo, Japan, March, 20, 2014 --- Hitachi, Ltd. (TSE: 6501, "Hitachi") today announced that it will create the post of Global Chief Executive Officer (CEO) as of April 1, 2014 to strengthen the management structure for global business expansion in the rail systems business. Specifically, Hitachi will assign a Global Chief Operating Officer (COO), Global Chief Strategy Officer (CSO) and other executives under the Global CEO to oversee and vigorously develop and advance global strategies for the rail systems business as it aims to drive further business expansion.

Rail systems are a safe and efficient mode of transportation that produces very few CO2 emissions. In the rail systems market, many regions around the world have taken active steps to build new rail systems and extend existing ones, and to introduce faster rail service by upgrading railcars and systems, among other initiatives. The size of the rail systems market was 18 trillion yen on average from 2009 to 2011. Looking ahead, the market is anticipated to increase to 20 trillion yen on average from 2015 to 2017, with steady expansion projected at a compound annual growth rate of 2.6% going forward.

Against this backdrop, Hitachi's rail systems business, which lies at the heart of the Social Innovation Business, has contributed to the development of rail infrastructure in Japan and throughout the rest of the world as Japan's only total railway systems integrator, comprising both a rolling stock systems business and a transport management & control systems business. In recent years, the rail systems business has accelerated global business expansion as part of its growth strategy, receiving orders for the UK Intercity Express Programme (IEP), plus turn-key orders for equipment for an urban railway line construction project in Ho Chi Minh City, Vietnam.

Hitachi will now create the post of Global CEO to further accelerate the globalization of the rail systems business. The Global Management team will further strengthen ties with world-wide networks, customers and partners to aggressively expand Hitachi's rail business world-wide.

Hitachi will appoint Alistair Dormer, Executive Chairman and Chief Executive Officer of Hitachi Rail Europe, as the Global CEO of the rail systems business. Mr. Dormer will also be appointed as a Corporate Officer of Hitachi, Ltd. as of April 1, 2014. Kentaro Masai, who will be appointed President & CEO of Hitachi's Rail Systems Company as of April 1, 2014, will serve as the Global COO with responsibility for strengthening ties with the Japanese Government and Japanese customers. Shinya Mitsudomi, CSO of the Rail Systems Company, will be appointed as the Global CSO. Together, they will provide strong leadership to advance Hitachi's rail systems business.

Alistair Dormer said: "The strengthening of the leadership team of Hitachi's rail systems business offers an exciting opportunity to lead accelerated global growth for the business. With its incredible heritage in technology innovation, Hitachi has been supplying a wide range of international products, services and solutions, and has the capacity to meet the demands of the growing global railway market. We will continue to deliver excellent service to our customer base whilst seeking new markets and opportunities for expansion."

Kentaro Masai said: "We will vigorously push ahead with global business development in the rail systems business, where growth is expected. We will do so by harnessing Hitachi's advanced rail systems technology, developed mainly in Japan over the years, and by further strengthening coordination with networks formed through our overseas businesses. We will also work to expand the rail systems business by bolstering our domestic business base and steadily promoting new business development. Working together with the Global CEO and other executives, I am committed to growing Hitachi's rail systems business into a globally competitive enterprise."

 

[Photohunter71]

It's good news for the UK economy just the same!

 

[Clip]

I never said it would, I said could and in the future. By moving a significant part of their global affiars and sales office to the UK then I really do believe that this could happen.


Sorry, Im being to optimistic I know.

Hold on,

Ok then, this is really rubbish, nothign will come of it, no new jobs, no prospect for new jobs. Just build them all in Japan, its the only way. Stupid Tory government.... blah blah blah.

 

[Xenophon PCDGS]

Shall we see how matters actually develop once the move has been effected and then allowing for time to elapse ?

 

[gordonthemoron]

they should build a factory at Forth Banks

 

[MarkyT]

UK headquarters could be useful for tackling the European market clearly and presumably Hitachi will be very much in favour of UK staying in EU, but the common language could also be useful for them bidding in the USA, assuming planned passenger rail expansion continues.

 

[47802]

While its good in some ways of course it could be balanced the closure of Derby in the long term, maybe even less UK Siemens jobs.

From other articles I've seen this morning most of the bidding seems to be based around UK contracts including HS2 rather than European.

While the level of UK manufacturing might increase now above the proposed sticker plant, a lot of high value stuff will still come from Japan, ok you can say that's no different to Bombardier, but I'm not sure its quite as good as made out.

 

[Mikey C]

While its good in some ways of course it could be balanced the closure of Derby in the long term, maybe even less UK Siemens jobs.

From other articles I've seen this morning most of the bidding seems to be based around UK contracts including HS2 rather than European.

While the level of UK manufacturing might increase now above the proposed sticker plant, a lot of high value stuff will still come from Japan, ok you can say that's no different to Bombardier, but I'm not sure its quite as good as made out.

I can't imagine Derby having a major role even if Bombardier won HS2, Aventra is their bread and butter and with the rolling electrification programme and need to replace all the 1980s DMUs and Mk3 based EMUs over the next 15 years there should be plenty of work for them if they want it.

 

[Clip]

While its good in some ways of course it could be balanced the closure of Derby in the long term, maybe even less UK Siemens jobs.

From other articles I've seen this morning most of the bidding seems to be based around UK contracts including HS2 rather than European.

While the level of UK manufacturing might increase now above the proposed sticker plant, a lot of high value stuff will still come from Japan, ok you can say that's no different to Bombardier, but I'm not sure its quite as good as made out.

But it is all hypothetical from every angle you look at it. It may be amazing it may not be but its a start, thats for sure.

 

[jopsuk]

What they're moving is an administrative HQ of a business sector. What indicates is that they see Europe as a more important growth market for their trains than far east (Korea, Taiwan, China etc) which is interesting in of itself. It doesn't mean they'll definitely build/assemble more in the UK or elsewhere in Europe; with that they'll do whatever makes economic sense (including political factors) to them

 

[Xenophon PCDGS]

What they're moving is an administrative HQ of a business sector. What indicates is that they see Europe as a more important growth market for their trains than far east (Korea, Taiwan, China etc) which is interesting in of itself. It doesn't mean they'll definitely build/assemble more in the UK or elsewhere in Europe; with that they'll do whatever makes economic sense (including political factors) to them

I have emboldened the part of your posting that is the truth of the matter.

One may well draw hypothetical suppositions from what may then ensue, but these will be only personal thoughts of forum members upon this thread.

 

[47802]

I can't imagine Derby having a major role even if Bombardier won HS2, Aventra is their bread and butter and with the rolling electrification programme and need to replace all the 1980s DMUs and Mk3 based EMUs over the next 15 years there should be plenty of work for them if they want it.

Maybe although Hitachi aren't just after HS2 they will after anything else that's going including potential Aventra stuff, as of course will Siemens.

 

[DownSouth]

UK headquarters could be useful for tackling the European market clearly and presumably Hitachi will be very much in favour of UK staying in EU, but the common language could also be useful for them bidding in the USA, assuming planned passenger rail expansion continues.

The language issue hasn't been an obstacle to Japanese companies winning rail contracts in North America previously, they would have offices in New York for that purpose.

 

[user15681]

There are rumors, and I should stress they are only rumors at this moment in time that I've heard personally and seen online, that there may be a follow on order from the 395s for up to 10 units. Certainly would help somewhat with Hitachi being here if it went ahead.

 

[kieron]

I have emboldened the part of your posting that is the truth of the matter.

Are you sure about that? I can see that they've reorganised the management team a bit, but it isn't clear if any jobs will be created or functions transferred as a result of this announcement. Alistair Dormer (for one) was already working in the UK as head of Hitachi Rail Europe. He's definitely got a more impressive sounding job title now, though.

 

[michael769]

Poor reporting that, I mean Honda and Nissan havent got any UK operations at all have they :/

Are they world wide divisional headquarters too?

 

[The Ham]

Even if they only transfer existing staff (and there will very likely be some new staff, probably in the form of secretarial, cleaning, security, etc. for the offices) it will create a boost for the UK economy (although probably not noticeable in the greater scheme of things) in that said staff will need somewhere to live, food to eat, transport to get them about, etc. This then has a knock on effect as those businesses and individuals receive more income, which they then pass on to others (including HMRC) and so on.

Yes nowhere near as much as a major factory opening up, but every little helps. Even just one extra fairly low paid member of staff is one person who has a job who otherwise wouldn't. Which is one less lot of benefits being paid and some extra tax coming in. If you get enough people with a job, it then creates more jobs for others as they need to buy stuff, have services provided, etc.

 

[TheKnightWho]

Even if they only transfer existing staff (and there will very likely be some new staff, probably in the form of secretarial, cleaning, security, etc. for the offices) it will create a boost for the UK economy (although probably not noticeable in the greater scheme of things) in that said staff will need somewhere to live, food to eat, transport to get them about, etc. This then has a knock on effect as those businesses and individuals receive more income, which they then pass on to others (including HMRC) and so on.

Yes nowhere near as much as a major factory opening up, but every little helps. Even just one extra fairly low paid member of staff is one person who has a job who otherwise wouldn't. Which is one less lot of benefits being paid and some extra tax coming in. If you get enough people with a job, it then creates more jobs for others as they need to buy stuff, have services provided, etc.

I suspect that the main advantage is actually its vote of confidence in the British economy, which may (and I stress that) have a knock-on effect on other companies.

But yes, I imagine Hitachi will be quite keen on us staying in the EU if this is their big inroad into the European market.

 

[DownSouth]

Are they world wide divisional headquarters too?

I'm sure if Nissan or Honda saw a business advantage in giving a couple of existing sales office staff new position titles which included the word "global" they wouldn't hesitate for a moment.

 

[SF-02]

I've read too much Private Eye to find these stories too welcoming at first glance. Britain resembles an off shore tax haven in many instances. How much will this benefit the exchequer?

Some jobs might be created but could be a drop in the ocean. Knowing how shoddy the tax system is it might even result in a loss for the UK but the gov are happy for that as it's good PR for them.

 

[Clip]

What they're moving is an administrative HQ of a business sector. What indicates is that they see Europe as a more important growth market for their trains than far east (Korea, Taiwan, China etc) which is interesting in of itself. It doesn't mean they'll definitely build/assemble more in the UK or elsewhere in Europe; with that they'll do whatever makes economic sense (including political factors) to them

I dont think I have said that they would I said they could.

Are they world wide divisional headquarters too?

They could do if they wanted to - just add it on the end of a factory title.

 

[AndrewP]

This is positive as it looks good for UK plc even though it is mainly symbolic.

My hope is that they end up doing what Nissan did with an assembly organisation evolving into full manufacture.

The other thing is that if they can show the UK is a good place for new assembly plants in the UK will other companies follow in the way they did in the automotive industry?

 

[WatcherZero]

Of course means Bombardier/Derby council claim to be the only UK manufacturer then becomes even weaker as they both do manufacturing and they are still run from Germany.

 

[RochdalePioneers]

Hopefully this means Hitachi doing the high value things here - research, bodyshells, electricals. I'd rather have them here than not, but unless the plan changes the new factory doesn't provide that much in the way of benefit. Let's assume they win export contracts - no real impact on trade deficit if all the value in the finished product first has to be imported.

You want Hitachi to really go after European business? A Euro loading gauge line to Teesport from Heighington would be a start

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[455driver]

Poor reporting that, I mean Honda and Nissan havent got any UK operations at all have they :/

How much money did the UK Government give them to set up the factories again?