John Deere and Hitachi Construction Machinery have announced to end their 33-year joint venture to manufacture excavators for the North and South American market, in a move that seeks to unlock new business opportunities for both companies.
The JV was set up in 1988 to co-produce excavators in North Carolina before it expanded to include the production of forestry swing machines and a joint marketing across America. The dissolution, which goes into effect on February 28, 2022, will see Deere acquiring the joint venture plants in Kernersville, N.C., Indaiatuba, Brazil, and Langley, British Columbia.
The company will also acquire the intellectual property license to continue manufacturing Deere-branded excavators indefinitely. Both acquisitions will cost $275 million.
Deere will produce self-branded excavators at the plants but will cease manufacture of Hitachi excavators. On the other hand, Hitachi will produce all of its excavators, wheel loaders and mining equipment in Japan and then export them to the Americas.
John Stone, president of construction & forestry division and power systems said: “John Deere will build on our legacy of quality and productivity and accelerate development of industry-leading technology and machinery”.
Supply agreement
Deere will enter into a “long-term supply agreement with Hitachi to source and produce the current products at existing locations,” the company’s said in a statement.
On its part, Hitachi – one of the world’s top-selling excavator manufacturers – will introduce new products in America, which will feature “cutting-edge technologies that increase efficiency and safety while lowering total cost of ownership.”
Advanced hydraulic and safety systems, “internet of things” services and telematics are some of the key technologies that Hitachi plans to introduce into the Americas.
Hitachi Construction Machinery America CEO Alan Quinn said his company will operate as a wholly owned subsidiary of the Japan-based Hitachi Construction Machinery. It will retain its regional headquarters in Newnan, Georgia, where it plans add 75 to 80 employees for positions ranging from sales, marketing, distribution, and dealer service.
