AKEBONO REPORT 2018

41/50

1 Rebuilding North American operationsAs a result of taking measures to rebuild North American operations, in fiscal 2017, operating profit improved by about JPY4.8 billion to JPY1.5 billion, returning to profitability. Despite achieving positive results, such as restoring profitability, sales are expected to decline for several years due to the withdrawal from sedan model by a customer and losing business opportunities for subsequent models because of production problems. Nevertheless, we will continue our efforts to optimize the production 2 Establishing global networks based on product-based business units (BUs)While improving each product’s profitability, we have launched five business units (BUs) responsible for marketing, product development, production and sales in various fields with the aim of strengthening our global competitiveness. Although the transition to the BU structure is still in progress, we are taking various Measure 1:Measure 2:Measure 3:• Initiatives to optimize the production system continue• Emergence of challenges due to implementation of North American-led reformsBusiness Units (BU)HP BU Foundation BUInfrastructure and Mobility (AIMS) BUFriction Material BU Aftermarket BU including marketing, R&D, production, BUStart-upHP (High performance) disc brakesDisc brakes, drum brakes and other mechanical partsProducts for industrial machinery, rolling stock, and sensorsBrake pads, lining and other friction materialsAftermarket productsHQ functionMain ProductsNext generation product development, new material and technology development for new area, new business model developmentRestore customer trustRestore profitabilityAKEBONO REPORT 2018 40Restructuring of the company foundationStrengthened cost managementImprovement in productivityStrengthen North American management and implement fundamental organizational reformsOptimize sales and purchase pricesReinforce our foundation and return to the basics of safety, quality, and deliverycooperation Back to the basics of a being a manufacturing company based on Japanese Monozukuri and stronger cooperation with Japan Ensure stable profits through further improvement of North American operationssystem. Challenges caused by the implementation of major reforms led by U.S. management have also emerged, and therefore I believe we have entered a reform phase that cannot be dealt with by local management alone. To achieve growth, we will go back to the basics of a being manufacturing company based on Japanese Monozukuri (manufacturing excellence), further strengthening cooperation between Japan and the United States. We work to further improve North American operations.measures aimed at completing the transition by the end of fiscal 2018 as originally planned. The current major challenges include promoting efficient collaboration between BUs and headquarter functions, as well as BUs and overseas operations, but we will work on these to achieve the midterm business plan.January 2016January 2016April 2016October 2016October 2016Business operation by products sales and profit management