Pushing vending machines, motor applications and volume manufacturing out of the parent (2001)

Seven years spent moving volume production outside

The test for what stayed inside the parent was whether development and assembly could put a price on it. The 800 people who moved to Shibaura Densan at a transfer price of $24.7M (¥3bn) became employees of a company whose new part-owner, Nidec president Nagamori Shigenobu, was describing how he would take sales calls from twenty a month to a hundred and twenty. Vending-machine sales and service went to Shibaura Jihanki, set up in 1993; manufacturing at the Obama plant went to Shibaura EMS. Businesses of quite different character that had been sharing money and people inside one company were, over seven years, sorted out along corporate boundaries.

Not everything pushed outside left the group, however. Vending machines stayed in the consolidated accounts as the distribution-equipment segment, still earning $60.2M (¥7bn) of sales and $8.6M (¥1bn) of operating profit in the year to March 2006. Shibaura Densan, by contrast — founded in October 1998 with a 40% stake — was annotated in that same year’s corporate history as having no remaining capital relationship. Within a single programme of divestment there were things held on to and things let go, and the difference may have owed less to the original design than to conditions at the destination.