Jiji Press OSAKA (Jiji Press) — After overcoming past crises by adapting to changing business environments, electronics maker Panasonic Corp. marked its 100th anniversary last Wednesday.
The company was launched by the late Konosuke Matsushita, a legendary corporate manager in Japan, with his wife and his brother-in-law, Toshio Iue, who later founded Sanyo Electric Co., now a Panasonic unit.
In 2008, the company changed its name from Matsushita Electric Industrial Co. Panasonic has grown to be a giant corporate group with over 270,000 workers.
Moving with the times
“We’ve continued business while adapting to different times,” said Akio Tanii, Panasonic’s fourth president, who took the wheel for seven years from 1986.
The company’s history started on March 7, 1918, when Konosuke Matsushita established Matsushita Electric Housewares Manufacturing Works at his home in the city of Osaka.
The company launched a two-way socket that allowed lighting and electric equipment to be used simultaneously in the 1912-1926 Taisho era, when there was only one electric outlet in many houses.
The product proved a big hit.
The founder believed in the importance of business contributing to society. One of his corporate philosophies was to provide products as plentifully and inexpensively as tap water in order to eliminate poverty.
After World War II, Japan’s high economic growth period began in the 1950s, when black-and-white television sets, laundry machines and refrigerators were the three must-have home appliances for the public.
Matsushita helped the spread of home appliances in the period by operating National home appliance shops, now Panasonic shops. The number of such shops peaked at some 27,000 in 1983.
Bumps in the road
The collapse of the information technology bubble in 2001 dealt a huge blow to Matsushita.
In the year to March 2002, Matsushita plunged into a consolidated net loss of some ¥430 billion.
Then President Kunio Nakamura turned around the business by cutting over 10,000 jobs, despite the founder’s pledge to protect employment.
Matsushita stumbled again later, this time in the flat TV business.
The company invested a total of some ¥600 billion in its plasma TV business to compete with companies strong in liquid crystal screen production, including Sharp Corp., but lost heavily. Investments included a plant in the city of Amagasaki, Hyogo Prefecture.
The increasing presence of South Korean makers, including Samsung Electronics Co., eroded TV prices and Matsushita’s profits.
Matsushita incurred consecutive group net losses of more than ¥700 billion in the years to March 2012 and to March 2013.
“One business will not be enough for the next 10 and 20 years, much less 100 years,” Kazuhiro Tsuga, who became Panasonic president in June 2012.
Under Tsuga, Panasonic withdrew from loss-making operations, switched to high value-added products for home appliances, and aimed to make auto-related operations one of its profit pillars.
The company turned around its business in the year through March 2014, posting some ¥120 billion in consolidated net profit.
Growing Chinese, South Korean and Taiwanese manufacturers allow Japanese households to purchase low-priced home appliances, such as TVs, personal computers and laundry machines.
Japanese electronics makers have lost their former big presence in these market segments.
They now focus on the production of high-function products, including the three must-have home appliances for double-income families — robot cleaning-machines, fully automated laundry and drying machines, and dishwashers — aiming for bigger profitability from high-priced items that sell well.
Amid the spread of electronic and autonomous vehicles, they have also put efforts into in-vehicle equipment.
Stepped-up efforts to put electric features into vehicles are removing the barrier between electronics makers and automakers.
In December last year, Panasonic and Toyota Motor Corp. announced their agreement to team up on vehicle batteries.
But a delay in mass production of the new model of major U.S. electric vehicle maker Tesla Inc., a U.S. partner of Panasonic, has affected the Japanese company’s battery supply.