March 16 (Bloomberg) -- Hitachi Ltd. will replace its president and separate two businesses after the Japanese company forecast a record loss.

Takashi Kawamura, 69, will assume Kazuo Furukawa’s role starting April 1, the Tokyo-based company said today. Hitachi plans to separate its automotive systems and consumer units on July 1 and reduce costs by 500 billion yen ($5.1 billion) in the 12 months ending March 31, 2010.

The overhaul adds to job cuts of as many as 7,000 positions at Hitachi after the company in January forecast it will post a record 700 billion yen loss in the year ending March 31. Electronics companies worldwide, Sony Corp. and have been forced to cut jobs and investments to cope with the global recession.

Kawamura currently serves as chairman at Hitachi Maxell Ltd., a unit making rechargeable batteries and compact discs, and Hitachi Plant Technologies Ltd., which produces water-treatment systems and industrial machinery, the company said.

Revenue at the company’s automotive systems group, comprising lithium-ion batteries, inverters and small-size motors, will total 280 billion yen next fiscal year, Hitachi said, equivalent to about 2.8 percent of total sales forecast for this year. The new company will employ about 2,700 workers, it said.

Sales at the consumer operations division, including plasma televisions, liquid-crystal displays for industrial use and mobile phones, will total about 160 billion yen next fiscal year, Hitachi said, or 1.6 percent of overall fiscal 2008 revenue. The unit will employ 750 workers.

Third-Biggest Revenue

Since Namihei Odaira founded Hitachi in 1910 as a repair shop that made electric motors, the company has expanded into businesses ranging from consumer electronics to chemical products to heavy machinery and nuclear reactors. By March 31, 2008, Hitachi’s 11.2 trillion yen in annual revenue ranked third among Japan’s publicly traded companies after Toyota Motor Corp. and Honda Motor Co., according to data compiled by Bloomberg.

The stock climbed 4 percent to close at 263 yen on the Tokyo Stock Exchange, before the company made the announcement. The benchmark Nikkei 225 Stock Average gained 1.8 percent. Hitachi shares have lost 24 percent this year, after dropping 59 percent in 2008.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

Last Updated: March 16, 2009 03:42 EDT