John Deere and Hitachi Construction Machinery to End Joint Venture; Deere to Acquire Factories

John Deere this week announced it has agreed with Hitachi Construction Machinery to end the Deere-Hitachi joint venture manufacturing and marketing agreements. John Deere and Hitachi will enter into new license and supply agreements, which will enable John Deere to continue to source, manufacture, and distribute the current lineup of Deere-branded excavators in the Americas.

As a result of the new agreements, the following changes will go into effect on Feb. 28, 2022, contingent upon regulatory approval.

• John Deere will acquire the Deere-Hitachi joint-venture factories in Kernersville, N.C.; Indaiatuba, Brazil; and Langley, British Columbia, Canada.
• John Deere will continue to manufacture Deere-branded construction and forestry excavators currently produced at the three Deere-Hitachi factories. These locations will discontinue production of Hitachi-branded excavators. John Deere will continue to offer a full portfolio of excavators through a supply agreement with Hitachi.
• John Deere's marketing arrangement for Hitachi-branded construction excavators and mining equipment in the Americas will end; Hitachi will assume distribution and support for these products.

"For many years, John Deere and Hitachi enjoyed a mutually successful partnership in the Americas," said John Stone, president, John Deere Construction & Forestry Division and Power Systems. "As we turn the page to a new chapter of Deere-designed excavators, we remain committed to supporting our customers of today and tomorrow. Looking to the future, John Deere will build on our legacy of quality and productivity and accelerate development of industry-leading technology and machinery that answers the fundamental need for smarter, safer, and more sustainable construction so our customers can shape tomorrow's world."

John Deere and Hitachi began a supply relationship in the early 1960s; then in 1988 the companies started the Deere-Hitachi manufacturing joint venture to produce excavators in Kernersville, N.C. In 1998, Deere-Hitachi expanded the relationship to include the production of forestry swing machines at Deere-Hitachi Specialty Products in Langley, B.C. In 2001, John Deere and Hitachi combined their marketing and distribution efforts in the Americas. In 2011, excavator manufacturing was expanded with the addition of the Deere-Hitachi Brazil factory in Indaiatuba, Brazil.

The agreement is subject to the receipt of certain required regulatory approvals as well as certain other customary closing conditions.

Also, HCM is announcing that HCMA will assume all product and service operations for the Americas in Spring 2022. HCMA will continue to be a wholly owned subsidiary of the Hitachi Construction Machinery Group.

HCMA is planning to add more than 60 new local positions to strengthen its North American headquarters in Newnan, Ga.

Masaaki Hirose, chairman and HCM executive officer, will continue to be responsible for HCMA. Alan Quinn, who currently serves as CEO, will continue in the same role.

“HCM, through HCMA, will be able to better determine its own destiny in the Americas with its own business strategies, improved products and services, and updated technologies, all provided through a revamped and strengthened distribution network,” Quinn said.

HCMA said that beginning spring of 2022, HCMA will introduce new equipment to the Americas with cutting-edge technologies that increase efficiency and safety while lowering total cost of ownership. The company plans to differentiate itself through the product capabilities of these new machines, including the latest in hydraulic systems, innovative “uptime” and IoT services, and advanced safety features. It will also assess the potential for completely new products that meet the needs of the Americas markets.