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Hitachi Splits Off Consumer Group

5/26/2009 10:56:00 AM Eastern

Tokyo — As part of its structural reform plan announced last March, Hitachi said Monday that it will split off its consumer business group July 1 and establish a new wholly owned subsidiary called Hitachi Consumer Electronics Co.

Shutoku Watanabe, current Hitachi business group president and CEO, will serve as the new company’s president and representative director.

Hitachi said the split was made due to the continued challenging business environment for consumer electronics products, which has forced Hitachi to “convert to a low-risk operating structure and improve earnings.”

These efforts have included “sourcing glass panel components used in plasma TVs from outside the Hitachi group and rightsizing the workforce since the previous fiscal year,” the company said.

Hitachi said the corporate split will result in stronger ties with Hitachi group companies responsible for externally sourcing, selling and providing services for home appliances, as Hitachi seeks to put in place a market-oriented business structure that is more responsive in supplying products matching customer needs.

Hitachi said the new company will allow faster decision making, which will particularly strengthen B to B businesses, such as commercial-use LCD projectors.

“Moreover, by also making full use of cooperation with partners, [Hitachi] aims to quickly establish a stable, high-profit business structure,” the company said in a statement.

As a simple corporate split, the action will not require shareholder approvals under Article 805 of Japanese corporate law, Hitachi said.

The split will not impact consolidated operating results because the new company is being established as a wholly owned consolidated subsidiary of Hitachi, Hitachi said.

Revenues from the company being split off were approximately $2.2 billion (210 billion yen) on an unconsolidated basis as of March 31, 2009.

In addition to Watanable, executive officers of the new Hitachi Consumer Electronics will include: Teizo Fujii, currently chief information officer and executive VP, becomes executive managing director; Takeo Yamada, currently consumer business group solutions business division general manager, becomes executive managing director; Kenichi Yoshitake, currently strategic sales and marketing division general manager, becomes board director; Tetsuo Shigekuni, currently human resources and administration general manager, becomes board director; Terada Masao, currently finance and accounting general manager, becomes board director; Takashi Miyoshi, currently Hitachi LTD executive VP and executive officer, becomes part-time board member; Kazuhiro Tachibana, currently Hitachi Appliances executive VP and director, becomes part-time board director; Hiroyuki Mizukami, currently consumer electronics laboratory chief technical officer/general manager, becomes part-time board director; Yasushi Fujita, currently Hitachi Communications Technologies corporate auditor, becomes corporate auditor. Fumitaka Ito, currently consumer business group strategy planning and development general manager, becomes part-time corporate auditor; and Masatoshi Kato, currently Hitachi Appliances board director and finance management division general manager, becomes part-time corporate auditor.

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