Building an overseas network, beginning with the US subsidiary (1980)

The network of a company that follows

There is little sense, in Hirose Electric’s overseas expansion, of a company going abroad to build a market of its own. The reason for leaving always lay on the customer’s side: it put sales companies where the set makers had gone, and plants where volume production had gone. From the American subsidiary of 1980 to the Indian one of 2016, the sequence of sites laid down over thirty-six years maps almost exactly onto where Japan’s electrical industry moved its manufacturing. Precisely because it committed to following, it seems to have wasted little time deciding where to go.

The network of cooperating factories that produced its high domestic margins, however, did not travel with it. In Malaysia it chose automated lines and some 400 directly employed workers — the opposite of how it built at Miyako. Even in 2015, when overseas sales had reached about 70% of the total, tangible fixed assets stood at $171.3M (¥21bn) in Japan against $124.8M (¥15bn) in Asia; more than half remained at home. The places where the company sells have spread across the world, while the machinery by which it earns has stayed where it was, in Tohoku.