Hitachi and Mitsubishi sitting in a tree…
STEVE CHIOTKAIS: Shares of Japanese companies Hitachi and Mitsubishi Heavy Industries surged today after reports surfaced that the two companies were planning to merge. Now even though the two firms have shrugged off a possible deal, the merger would be Japan’s biggest. Ever. And the two would create one of the world’s largest companies.
Marketplace’s Asia Bureau Chief Rob Schmitz reports.
ROB SCHMITZ: Japanese companies like Toyota, Honda, Sony, and Panasonic have become household brands throughout the world.
But when’s the last time you bought something from Hitachi or Mitsubishi Heavy Industries
TAKEO MIYAMOTO: They care more about domestic market than overseas.
That’s Deutsce Securities’ Takeo Miyamoto. These two companies have helped build Japan’s transmission grid, railways, and its nuclear power plants. Now with Japan’s economy on the skids, Miyamoto says these two giant companies will need to start looking outside Japan for profits.
MIYAMOTO: Better to merge and become larger, so that they will have enough resources to compete against large competitors in the global market.
That global market used to be packed with the likes of GE, Bechtel, Fluor-big American firms.
But more low-cost Chinese engineering firms will now make it more difficult for a super-company like this to thrive.
In Shanghai, I’m Rob Schmitz for Marketplace.
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