Hitachi rail systems moving to UK

Hitachi rail systems is moving to the UK from Japan, the Japanese electronics giant that made the first bullet train announced today. Its global headquarters will be in London and main factory in the north of England.

Hitachi rail systems currently employs 2,500 workers in Japan. The company says it plans to increase its workforce to 4,000 after moving to the United Kingdom. Revenues should increase to €3 billion ($4 billion) from its current €2 billion.

In July, 2013, Hitachi won a deal worth £1.2 billion ($1.98 billion, €1.44 billion) to build the next generation of inter-city trains in Newton Aycliffe, County Durham, England. It is in Newton Aycliffe where the company is building its plant.

The Newton Aycliffe factory will employ 750 workers at first when it opens in 2015. Hitachi’s rail systems will be headquartered in London.

Unusual move for a Japanese company

Moving its core production facilities from Japan to the UK is an unusual move for a Japanese firm. Europe is a major market for trains, and the UK is close to Hitachi’s main rival in train building, Siemens in Germany.

Hitachi made the high-speed Javelin trains that run through the county of Ken to into London’s St. Pancras station. The Japanese conglomerate says it aims to bid for contracts on HS2 – the high-speed railway plan between London, the English Midlands, NW England, Yorkshire, and possible NE England and the Central Best of Scotland too.

Alistair Dormer Global CEO of Hitachi rail systems

Hitachi announced that it will appoint Alistair Dormer as Executive Chairman and Chief Executive Officer of Hitachi Rail Europe, as the Global CEO of the rail systems business. Dormer will also become a Corporate Officer of Hitachi Ltd.

Kentaro Masai will be appointed CEO & President of Hitachi’s Rail Systems Company and will serve as the Global Chief Operating Officer, tasked with strengthening ties with the Japanese government and Japanese customers.

Mr. 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.”

Mr. 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.”

Hitachi rail system’s main market in terms of revenue is Japan, followed by Taiwan and then the UK. The UK should move to second spot because of the Intercity Express Programme.

Hitachi says UK should stay in EU

According to Mr. Dormer, Hitachi would prefer the UK to remain in the European Union. In 2017 there is likely to be a decisive referendum on UK membership.

The Financial Times quoted Mr. Dormer, who said regarding the European Union:

“We are investing a lot of money in the UK, in our factory and we would be concerned about any trade barriers or additional hurdles to dealing with Europe.”

Hitachi’s two main rivals, Siemens and Bombardier, have lobbied against the Japanese company’s right to bid in the European market.

They argue that as Japan is closed to foreign bidders it is unfair for the country to expect Europe not to do the same.

Hitachi has recently pre-qualified for two contracts in Germany after failing in a previous bid. The current bid involves a signaling contract and the provision of rolling stock.

The company has also bid for a contract to provide Sweden’s rail network with traffic control systems.

The UK’s Secretary of State for Transport, Patrick McLoughlin described Hitachi’s decision as “an incredible vote of confidence in a growing Britain that is exporting more and making great things once again. Nothing says that better than the company that built the first bullet train putting its HQ here to sell abroad, alongside a new factory and new jobs in northern England. This is just the sort of growth we want to see more of as we invest in rail and build HS2.”