Acquiring Nissan’s aerospace business and turning to aviation and space (2000)

The active move at the start of a concentration “left over”

IHI’s concentration on aero-engines is often later described as a structure “left over by elimination” after it cut away shipbuilding and its non-focus businesses. Yet trace its beginning, and there stood clearly active decisions: the aggressive investment in aviation in 1998 and the acquisition of Nissan’s business in 2000. In the period as shipbuilding thinned, the choice to sort the businesses to defend from those to grow, and to draw resources and technology toward aerospace with its high barriers to entry, reveals — rather than passivity — a will to pick out the next pillar for itself.

Yet leaning on a single pillar also deepens the wound when that pillar shakes. The portfolio thickened around civil engines and space became the foreshadowing of the largest loss in the company’s history, in the year ended March 2024, brought on by a problem with aero-engine parts. The decision to actively pick out the next pillar and the risk born of dependence on the pillar so chosen are the front and back of one and the same decision. The question of how far concentration can be intentionally controlled remains with the company even now, a quarter-century on.