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Throwback Thursday – The History of Hitachi

Throwback Thursday – The History of Hitachi
By Bill Dickson October 22, 2015 9413 Views

It’s a brand that’s been around since the early 1920s…investing in a number of different industries. In the late 1940s, this conglomerate invested into power tools which has turned from a regional corporate power to an internationally known entity. Its brand is known not only in the power tools industry, but automotive, defense, power systems and a range of other sectors. This time, the staff from Tool Parts Direct takes a look at the history of Hitachi on this edition of Throwback Thursday.

The Founder and Beginning

Namihei Odaira

Before the founding of the company, founder Namihei Odaira was born on January 15th, 1874. He was born in the Tochigi Prefecture near Tokyo. In 1900, Odaira graduated from the University of Tokyo in 1900. After he graduated, Odaira became an engineer for a local power plant. He moved on to several other power companies, gaining more knowledge and experience as he went.

In 1906, he joined the Kuhura Mining Company as its chief section engineer. His duties were to insure that the company had a steady supply of electricity and maintaining the company’s machinery. During that time, Odaira and his cohorts began working on the five horsepower electric motor. Under the watchful eye of the mining company, Hitachi was founded by Odaira in 1910.

The Build Up and Fall

Despite Odaira’s early success, other Japanese companies were hesitant to buy his motors. Many companies still imported motors from the USA and Europe. Odaira’s luck changed at the start of World War I in 1914. During the war, many European companies could not sell motors to Japanese companies in order to help with their own war effort. Odaira took advantage of this opening and created a 10,000-horsepower generator in just five months. One major power company was impressed with his work and ordered more equipment. At the same time, Hitachi began building up its interior industrial capabilities.

Early Hitachi Factory in the 1920s

Armed with his newfound success, Odaira incorporated his company in 1920. In honor of a nearby town and his first sale, Odaira named his corporation Hitachi which means ‘rising sun.’ Odaira’s success increased during the inter-war years. During the 1920s, Hitachi grew to meet Japan’s growing industrial expectations. Hitachi also diversified its products to become the nation’s leading manufacturer in pumps, blowers and other industrial equipment. Hitachi also became one of Japan’s first corporations who to build and supply itself without outside help.

As prosperous as the 1920s was for the company, the 1930s were the opposite. When the military took over the Japanese government in the 1930s, changes were made to Hitachi. While Odaira tried to maintain his corporate independence, Hitachi was eventually forced to make war material before World War II. Odaira was successful preventing Hitachi from manufacturing actual weapons.

The fall of Japan after World War II devastated the nation. Hitachi was no different and many of their facilities were destroyed during Allied air raids. In 1946, American occupation forces tried to break up Hitachi altogether and Odaira was removed from power. After three years of negotiations, Hitachi was allowed to remain intact, but had to shut down 19 factories. The cost of the shutdown and other difficulties nearly brought the company down in 1950.

The Postwar Boom

Hitachi TV Assembly Line

Chikara Kurata replaced Odaira in the 1950s and began to expand the company beyond Japan. Knowing that electronics would play a big role in the future, Kurata sent engineers and students to study with American electronics companies. He also created technology exchanges with RCA and General Electric. During the 1960s, Hitachi began to create consumer goods ranging from household appliances to stereo sound systems. Hitachi also became involved in computer research…becoming one of the leading companies in the world in regards to computer statistical data.

Despite making gains in the computer industry, International Business Machines (IBM) continued to set the industry standard. Japan’s Ministry of International Trade made a commitment to narrow the gap between the two corporate giants. Both Japan and the US continue compete in computer research to this day.

Restructuring in the 1980s

Hitachi Super Computer

Hitachi experienced some setbacks in the 1980s, forcing it to adapt to its new circumstances. Hitachi beefed up its marketing department to increase its brand awareness. This, along with other adverse circumstances, caused their profits to dip. Hitachi also fell behind other tech companies who were providing more modern tech.

Hitachi President Katsushige Mita adopted a strategy in the mid-1980s to make his company more competitive. The company reorganized by reducing labor expenses while automating other tasks in the company. It also helped the Hitachi bought a controlling interest in National Advanced Systems, an American provider of computer mainframes. This helped stabilize Hitachi’s Situation.

Despite the recent stabilization, Hitachi continued to struggle.

Restructuring and the Future

Hitachi eventually realized it had to work with other companies in order to make themselves competitive once again. It the late 1980s and early 1990s, Hitachi negotiated deals with Texas Instruments, Hewlett-Packard Corporation and even its main rival IBM. In fact, Hitachi even began selling IBM laptops under its name in 1991. Sales remained flat and company higher ups decided to focus from heavy industrial equipment to information systems. Officials also decided to reorganize some divisions into autonomous operations in meet customer demand over production requirements. Pay freezes were instituted.

Photo Courtesy of Hitachi

This helped Hitachi make modest growth into a modern global economy. Today, Hitachi is a respected brand and provides products ranging from tools to supercomputers. As time moves on, it’s certain that Hitachi will continue to provide excellent services to its customers and clients into the future.

Jul 28, 2015 9:22:09 PM

References: http://www.hitachi.com/corporate/about/history/