Hitachi Sees Green Refocus As Path to Profitability

Money-losing Hitachi will focus on ecological businesses including hybrid railways and batteries for green cars in its latest effort to return to profitability, its new president said Tuesday.

The electronics maker must use its sprawling assets in telecommunications and “social infrastructure” such as power systems and data management to expand in businesses that “fuse these two technologies,” including smart grids for cities and energy-efficient data centers, said Hiroaki Nakanishi, who took office April 1.

Nuclear power plants are another possible opportunity, he told reporters. He said details of his strategy will be announced by the end of May.

Tokyo-based Hitachi expects to remain in the red for the fiscal year that ended last month but is trying to cut costs and is raising money by issuing new shares.

“We will come back as a strong Hitachi,” Nakanishi said.

Nakanishi’s appointment in February was part of a managerial shake-up designed to move toward a recovery.

Hitachi, which employs 400,000 people worldwide, has struggled with a bloated work force and a complex corporate structure with an array of subsidiaries. Over the years, it has implemented various turnaround plans with little success.

The company eked out a small profit for the quarter through December 2009 but is forecasting a 210 billion yen ($2.2 billion) loss for the fiscal year ended March 31.

Nakanishi, 64, promised to strengthen the company’s financial base, which he acknowledged is unsatisfactory.

The new president, a Hitachi veteran who joined the company in 1970, has overseen its operations in Europe and the U.S., as well as its power systems, information and data storage businesses.

Nakanishi said Hitachi needs to become stronger as a global company and allow regions more autonomy in decisions on investments and shaping strategy. It also needs to recruit qualified workers in growth regions such as China and the Middle East, he said.

YURI KAGEYAMA, AP Business Writer TOKYO