Hitachi Ltd., which posted a record profit last fiscal year, appointed its first non-Japanese outside directors, who pledged to help the company cut costs and boost profitability.
“It’s important to set the organization stretch targets,” George Buckley, one of the new directors and a former chief executive officer of 3M Co., told reporters in Tokyo today. “There are wonderful profits to be made in the parts and service business.”
The maker of nuclear reactors, train cars and air- conditioners plans to cut costs by 5 percent within five years and widen its profit margin as it competes with Siemens AG and General Electric Co. (GE:US) The Tokyo-based company has predicted a 16 percent increase in operating profit this year, helped by a rebound in its power systems business.
“Hitachi needs to find low-cost suppliers and not do everything in-house,” Philip Yeo, the second non-Japanese outside director, said. “If you don’t grow globally you’re going to have a problem due to costs.”
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