The merger, the closure of Adachi, and consolidation at Tsuchiura (1974)

Land in Tokyo, a factory in Ibaraki

The weight of the decision to close Adachi shows in the fact that the proceeds from the site became the main source of funds for the ¥13.5 billion relocation investment. A company that had posted recurring losses two terms running had no capacity to build a new integrated plant on its own; only by letting go of land in Tokyo and stacking the equipment back up in Ibaraki could the production system be remade at all. Since metropolitan industrial-siting law was blocking even capacity investment, the option of staying at Adachi was thin from the beginning.

Consolidation did not, however, make the company stable. Demand cooled after the oil crisis, operating rates fell, and recurring losses returned in the March 1976 and March 1977 terms — a structure concentrated in a single plant also takes the swings of demand directly. Even so, a line-up narrowed to excavation machinery and integrated production at Tsuchiura left behind the foothold of ¥121.9 billion in sales in the March 1981 term and the top share in hydraulic excavators. That the company handed down a decision to discard and a decision to concentrate within a few years of each other is what defined its outline.