1 00:00:04,400 --> 00:00:07,760 Speaker 1: Welcome to tex Stuff, a production from I Heart Radio. 2 00:00:12,240 --> 00:00:15,520 Speaker 1: Hey there, and welcome to tech Stuff. I'm your host, 3 00:00:15,720 --> 00:00:19,400 Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio 4 00:00:19,440 --> 00:00:22,599 Speaker 1: and I love all things tech. And welcome to the 5 00:00:22,760 --> 00:00:27,240 Speaker 1: third and and final, at least for now episode in 6 00:00:27,280 --> 00:00:30,920 Speaker 1: our series about the history of Pana Sonic a k a. 7 00:00:31,360 --> 00:00:36,400 Speaker 1: The Mattsushida Electrical Industrial Company. At the end of our 8 00:00:36,479 --> 00:00:41,120 Speaker 1: last episode, I talked about how Konosuke Matsushida, who founded 9 00:00:41,159 --> 00:00:45,879 Speaker 1: the company in nineteen eighteen, retired as chairman of the 10 00:00:45,920 --> 00:00:49,560 Speaker 1: company in nineteen seventy three. He stepped into a more 11 00:00:49,680 --> 00:00:54,920 Speaker 1: informal executive advisory role at that time. Now, I say that, 12 00:00:55,600 --> 00:01:00,320 Speaker 1: but executive advisors in Japan can exert and any formous 13 00:01:00,360 --> 00:01:04,080 Speaker 1: amount of control over companies even after they have officially 14 00:01:04,160 --> 00:01:07,399 Speaker 1: stepped out of leadership roles. More on that as we 15 00:01:07,440 --> 00:01:11,360 Speaker 1: go on. We also heard about allegations that Panasonic, along 16 00:01:11,400 --> 00:01:15,759 Speaker 1: with several other major electronics companies in Japan, had practiced 17 00:01:15,959 --> 00:01:20,520 Speaker 1: price fixing, both in Japan domestically, where the companies would 18 00:01:20,520 --> 00:01:24,040 Speaker 1: sell products at a premium, and in the US market, 19 00:01:24,319 --> 00:01:27,760 Speaker 1: where these same companies would sell products at a loss 20 00:01:27,959 --> 00:01:31,319 Speaker 1: in order to undercut American electronics companies and kind of 21 00:01:31,880 --> 00:01:35,400 Speaker 1: gain the market in the US. So while the company 22 00:01:35,440 --> 00:01:37,600 Speaker 1: history has a lot of positive elements, there are at 23 00:01:37,640 --> 00:01:41,280 Speaker 1: least a few smudges that warrant investigation. We'll talk about 24 00:01:41,280 --> 00:01:44,160 Speaker 1: a few more of those in this episode, but we 25 00:01:44,280 --> 00:01:49,920 Speaker 1: pick up in ninety three. Masaharu Matsushida, Kanasuke's son in law, 26 00:01:50,720 --> 00:01:52,760 Speaker 1: is still the president of the company at that time, 27 00:01:52,880 --> 00:01:57,880 Speaker 1: and uh Arataro Takahashi is chairman. Takahashi had played an 28 00:01:57,880 --> 00:02:02,560 Speaker 1: important role in establishing matsushi It's relationship with the Dutch 29 00:02:02,600 --> 00:02:08,080 Speaker 1: electronics company Phillips, and Phillips had really helped the Japanese 30 00:02:08,160 --> 00:02:11,840 Speaker 1: company get up to speed on the consumer electronics industry. Essentially, 31 00:02:12,080 --> 00:02:17,960 Speaker 1: Phillips was providing the technical know how and Matsushida was 32 00:02:18,320 --> 00:02:21,040 Speaker 1: providing the access to the Japanese market, and it was 33 00:02:21,080 --> 00:02:26,639 Speaker 1: a beneficial relationship. Phillips had retained a nearly thirty five 34 00:02:26,680 --> 00:02:31,399 Speaker 1: percent stake in the company as a result. Uh and 35 00:02:31,600 --> 00:02:36,480 Speaker 1: Takahashi was instrumental in getting that to happen. It's interesting 36 00:02:36,520 --> 00:02:41,280 Speaker 1: to see that he became the chairman while Masaharu remained president, 37 00:02:41,480 --> 00:02:44,919 Speaker 1: because typically it wouldn't work that way. So we need 38 00:02:44,919 --> 00:02:49,640 Speaker 1: to consider how Japanese businesses typically handle succession, and this 39 00:02:49,720 --> 00:02:52,320 Speaker 1: will become even more important as we go on in 40 00:02:52,360 --> 00:02:56,320 Speaker 1: this episode. Now, it's not that different from the way 41 00:02:56,560 --> 00:03:00,400 Speaker 1: many other companies handle succession, particularly those that tend to 42 00:03:00,440 --> 00:03:03,400 Speaker 1: look within the company itself as opposed to bringing in 43 00:03:03,440 --> 00:03:07,440 Speaker 1: a leader from some other company. In Japanese companies, it's 44 00:03:07,480 --> 00:03:10,600 Speaker 1: typical for a president to move to a chairman position 45 00:03:10,720 --> 00:03:14,560 Speaker 1: when the previous chairman retires, and it's not unusual for 46 00:03:14,600 --> 00:03:17,320 Speaker 1: a chairman to take on one of those informal executive 47 00:03:17,320 --> 00:03:20,640 Speaker 1: advisor roles on the board, so even when they're gone, 48 00:03:21,040 --> 00:03:24,079 Speaker 1: they aren't really gone, or as Red Letter Media likes 49 00:03:24,120 --> 00:03:29,240 Speaker 1: to say, nobody has ever really gone. Normally, one of 50 00:03:29,240 --> 00:03:32,680 Speaker 1: the most senior level executive vice presidents of the company 51 00:03:32,720 --> 00:03:36,520 Speaker 1: will then assume the role of president, and so seniority 52 00:03:36,600 --> 00:03:42,240 Speaker 1: plays a massively important part in succession in Japanese businesses, 53 00:03:42,520 --> 00:03:45,960 Speaker 1: as well as in wages. Typically, though, we learned there's 54 00:03:45,960 --> 00:03:48,520 Speaker 1: also a tendency for control of a company to remain 55 00:03:48,640 --> 00:03:51,640 Speaker 1: within a family, which could be another way that an 56 00:03:51,640 --> 00:03:55,360 Speaker 1: outgoing executive keeps one hand on the steering wheel even 57 00:03:55,400 --> 00:03:59,840 Speaker 1: after they've officially retired. Takahashi certainly had been around a 58 00:04:00,040 --> 00:04:02,520 Speaker 1: long time. He had worked at the company since the 59 00:04:02,600 --> 00:04:05,680 Speaker 1: nineteen thirties, and he played such an important role in 60 00:04:05,720 --> 00:04:09,040 Speaker 1: getting that relationship with Phillips established, But in this case 61 00:04:09,280 --> 00:04:12,840 Speaker 1: he sort of leap frogg massa Haru. I couldn't find 62 00:04:12,920 --> 00:04:16,120 Speaker 1: much information on what was going on at the executive 63 00:04:16,200 --> 00:04:20,640 Speaker 1: level at this time, but my assumption is that Konasuke 64 00:04:20,800 --> 00:04:24,000 Speaker 1: felt that Massaharu was best left in the president position 65 00:04:24,480 --> 00:04:27,960 Speaker 1: for a little while longer, and that he would move 66 00:04:28,040 --> 00:04:30,839 Speaker 1: up to chairman in the future. And perhaps there wasn't 67 00:04:31,080 --> 00:04:34,120 Speaker 1: someone that impressed Konosuke enough to step into the role 68 00:04:34,240 --> 00:04:39,359 Speaker 1: of president, so he won Masaharu to remain there. Because again, 69 00:04:39,400 --> 00:04:42,599 Speaker 1: while he was officially retired, Konosuke was still very much 70 00:04:42,600 --> 00:04:45,080 Speaker 1: involved with the operations of the company that he had 71 00:04:45,080 --> 00:04:49,440 Speaker 1: founded way back in nineteen eighteen. One of Kanasuke's directives 72 00:04:49,800 --> 00:04:53,760 Speaker 1: was having a profound impact upon the company and really 73 00:04:53,800 --> 00:04:56,920 Speaker 1: on the electronics industry in Japan in general, and that 74 00:04:57,040 --> 00:05:00,160 Speaker 1: was his goal of getting wages in Japan close sor 75 00:05:00,240 --> 00:05:04,040 Speaker 1: to what US companies paid their employees over here. And 76 00:05:04,080 --> 00:05:08,279 Speaker 1: this wasn't just an altruistic desire to reward employees, but 77 00:05:08,360 --> 00:05:12,360 Speaker 1: to encourage productivity and to be more competitive for skilled 78 00:05:12,400 --> 00:05:16,839 Speaker 1: and educated workers in an increasingly competitive industry. But it 79 00:05:16,880 --> 00:05:20,520 Speaker 1: also meant things had to change. From a production standpoint. 80 00:05:21,200 --> 00:05:24,920 Speaker 1: Raising wages would mean increasing the cost of doing business, 81 00:05:25,200 --> 00:05:28,599 Speaker 1: which would impact profits. So one of the things the 82 00:05:28,640 --> 00:05:32,600 Speaker 1: company focused on was streamlining processes as much as possible, 83 00:05:32,880 --> 00:05:37,240 Speaker 1: making them more efficient and economic. This included automating processes 84 00:05:37,279 --> 00:05:39,600 Speaker 1: whenever it made sense to do so, and the end 85 00:05:39,640 --> 00:05:43,760 Speaker 1: result was that by the nineteen seventies, Matsushido was one of, 86 00:05:43,880 --> 00:05:47,280 Speaker 1: if not the most efficient large company in Japan, even 87 00:05:47,320 --> 00:05:51,560 Speaker 1: over companies like Toyota. By nineteen seventy one, wages at 88 00:05:51,560 --> 00:05:55,919 Speaker 1: Matsushida were comparable to those in West Germany, and you know, 89 00:05:55,960 --> 00:05:58,600 Speaker 1: if you're young, you might not know that there used 90 00:05:58,640 --> 00:06:02,120 Speaker 1: to be an East and a West Germany. By nineteen 91 00:06:02,160 --> 00:06:06,720 Speaker 1: seventy two, just before Kanasuke would retire, the wages were 92 00:06:06,720 --> 00:06:10,040 Speaker 1: actually pretty close to what employees were doing in comparable 93 00:06:10,160 --> 00:06:13,520 Speaker 1: jobs in the United States. While this was happening, an 94 00:06:13,520 --> 00:06:17,200 Speaker 1: external crisis made things more complicated for the company. In 95 00:06:17,240 --> 00:06:20,760 Speaker 1: the autumn of nineteen seventy three, when a coalition of 96 00:06:20,800 --> 00:06:25,320 Speaker 1: Arabic forces launched a surprise attack on Israeli forces. It 97 00:06:25,640 --> 00:06:29,480 Speaker 1: created the yam Kapoor War. It took place during Yom Kippur, 98 00:06:29,520 --> 00:06:33,479 Speaker 1: a Jewish holiday, and sometimes it's called the yam Kappur War. 99 00:06:33,640 --> 00:06:36,800 Speaker 1: Sometimes it's called the Ramadan War. It was also coinciding 100 00:06:36,800 --> 00:06:39,960 Speaker 1: with the Muslim holy month of Ramadan. And this war 101 00:06:40,080 --> 00:06:43,320 Speaker 1: only lasted a few weeks, but the world was drawn 102 00:06:43,320 --> 00:06:47,440 Speaker 1: into it because of various alliances, including the Soviet Union 103 00:06:47,920 --> 00:06:50,239 Speaker 1: on one side in the United States on the other side. 104 00:06:50,400 --> 00:06:53,520 Speaker 1: And the complexities of that conflict are well beyond the 105 00:06:53,560 --> 00:06:56,600 Speaker 1: scope of this show, but the effects on industry are 106 00:06:56,680 --> 00:06:59,039 Speaker 1: what I hope to focus on. It does play a 107 00:06:59,120 --> 00:07:01,880 Speaker 1: part in techno oology. At the end of the war, 108 00:07:02,080 --> 00:07:06,479 Speaker 1: a coalition of Arab countries decided upon an oil embargo 109 00:07:06,520 --> 00:07:09,800 Speaker 1: against the US and other nations, and this led to 110 00:07:09,880 --> 00:07:14,640 Speaker 1: a global energy crisis. As oil production slowed down. Japan 111 00:07:14,800 --> 00:07:17,360 Speaker 1: was not immune to this crisis. The cost of raw 112 00:07:17,440 --> 00:07:20,840 Speaker 1: materials increased, as did the cost of shipping stuff from 113 00:07:20,920 --> 00:07:24,240 Speaker 1: one place to another. I mean that oil embargo was 114 00:07:24,280 --> 00:07:26,880 Speaker 1: going to have an impact on fuel prices, which would 115 00:07:26,920 --> 00:07:29,200 Speaker 1: make it more expensive to ship things, which meant that 116 00:07:29,240 --> 00:07:31,360 Speaker 1: you had to charge more for your products, and you 117 00:07:31,400 --> 00:07:36,760 Speaker 1: see how this becomes a ripple effect, and Mattsushida was 118 00:07:36,880 --> 00:07:39,080 Speaker 1: trying to be as strategic as it could be to 119 00:07:39,200 --> 00:07:41,920 Speaker 1: limit the effect that the crisis would have on sales figures. 120 00:07:42,160 --> 00:07:45,120 Speaker 1: But even so, the company posted a decrease in profits 121 00:07:45,160 --> 00:07:49,960 Speaker 1: in nineteen seventy four compared to nineteen seventy three. It 122 00:07:50,200 --> 00:07:53,760 Speaker 1: also had more sales during that time, but it wasn't 123 00:07:54,080 --> 00:07:56,880 Speaker 1: profiting as much. Even though it was selling more, it 124 00:07:57,000 --> 00:08:01,000 Speaker 1: was making less money, and both sales and profit would 125 00:08:01,000 --> 00:08:04,640 Speaker 1: be on the decline in nineteen seventy five. One product 126 00:08:04,720 --> 00:08:08,680 Speaker 1: the company introduced in nineteen would fail to get traction 127 00:08:08,720 --> 00:08:11,440 Speaker 1: in the market at all. So in the nineteen seventies 128 00:08:11,480 --> 00:08:13,880 Speaker 1: a few companies were battling it out to create the 129 00:08:13,960 --> 00:08:18,800 Speaker 1: definitive home entertainment media playback device, and this took a 130 00:08:18,800 --> 00:08:21,320 Speaker 1: lot of different forms, all of which were in some 131 00:08:21,440 --> 00:08:24,200 Speaker 1: level of competition against each other. Some of them were 132 00:08:24,240 --> 00:08:27,120 Speaker 1: playback only devices, like you would have to go out 133 00:08:27,160 --> 00:08:30,520 Speaker 1: and purchase a movie or TV show or rent one 134 00:08:30,960 --> 00:08:34,320 Speaker 1: and play it on a device. So the Capacitance Electronic disc, 135 00:08:34,400 --> 00:08:36,720 Speaker 1: which was made by our c A, was one of 136 00:08:36,720 --> 00:08:38,920 Speaker 1: those types of devices. I actually have one of those 137 00:08:39,200 --> 00:08:42,520 Speaker 1: literally at my feet right now, an old CD player, 138 00:08:42,840 --> 00:08:46,079 Speaker 1: the laser disc player from m C. A Disco vision 139 00:08:46,120 --> 00:08:49,000 Speaker 1: would also be another one, But I want to talk 140 00:08:49,040 --> 00:08:53,760 Speaker 1: about VCRs. So VCRs, or video cassette recorders, are one 141 00:08:53,760 --> 00:08:56,800 Speaker 1: of those technologies that had a huge impact on how 142 00:08:56,840 --> 00:08:59,839 Speaker 1: we consume entertainment, and I might do an episode of 143 00:09:00,000 --> 00:09:02,959 Speaker 1: out that in the near future about how the development 144 00:09:03,040 --> 00:09:06,760 Speaker 1: of the VCR changed entertainment itself. And there were a 145 00:09:06,760 --> 00:09:10,320 Speaker 1: few formats that all did the same general thing, but 146 00:09:10,440 --> 00:09:15,240 Speaker 1: with different approaches. Generally speaking, these machines used magnetic storage, 147 00:09:15,520 --> 00:09:18,760 Speaker 1: much as audio tape had. In order to store video 148 00:09:18,840 --> 00:09:22,520 Speaker 1: and audio information, a VCR has at the very least 149 00:09:22,559 --> 00:09:25,440 Speaker 1: an electro magnet that acts as a reading head, and 150 00:09:25,520 --> 00:09:29,760 Speaker 1: as tape moves below this reading head, the tape induces 151 00:09:29,800 --> 00:09:32,439 Speaker 1: a current to flow through that electro magnet because of 152 00:09:32,480 --> 00:09:35,040 Speaker 1: the magnetic particles that are in the tape, and that 153 00:09:35,080 --> 00:09:37,959 Speaker 1: flows through the VCR, and that current is a signal 154 00:09:38,080 --> 00:09:42,600 Speaker 1: it's meaningful, it can be decoded, and that decoded information 155 00:09:42,640 --> 00:09:45,960 Speaker 1: can be sent to a television and potentially an additional 156 00:09:45,960 --> 00:09:49,040 Speaker 1: sound system as well, and that will play the media 157 00:09:49,240 --> 00:09:52,160 Speaker 1: that is stored on the tape. Most VCRs also had 158 00:09:52,200 --> 00:09:55,880 Speaker 1: the capability to write to a blank tape or record 159 00:09:55,960 --> 00:09:59,240 Speaker 1: over an unprotected tape, and that meant this whole process 160 00:09:59,280 --> 00:10:02,240 Speaker 1: could be reversed and the electro magnet would generate a 161 00:10:02,240 --> 00:10:05,559 Speaker 1: magnetic field, and the magnetic field would be recorded onto 162 00:10:05,640 --> 00:10:08,960 Speaker 1: the plastic tape that passes by during the recording process. 163 00:10:09,559 --> 00:10:12,280 Speaker 1: I'm sure most of you have heard about the format 164 00:10:12,280 --> 00:10:16,199 Speaker 1: war that raged between Sony's Beta max format and j 165 00:10:16,400 --> 00:10:20,040 Speaker 1: v C S VHS format. But while those two would 166 00:10:20,040 --> 00:10:23,520 Speaker 1: be the primary candidates for home theater systems, there were 167 00:10:23,559 --> 00:10:27,440 Speaker 1: other formats that entered the fray, including one from Matt 168 00:10:27,480 --> 00:10:32,520 Speaker 1: Sushida slash Pana Sonic, and that format was called v X. 169 00:10:33,120 --> 00:10:37,719 Speaker 1: Matt Sushida only introduced a couple of models of VCR 170 00:10:37,800 --> 00:10:41,320 Speaker 1: that used the v X format. The version released in 171 00:10:41,320 --> 00:10:45,679 Speaker 1: North America was called the Quasar VR one thousand, also 172 00:10:45,760 --> 00:10:50,240 Speaker 1: known as the Great Time Machine. The v X format 173 00:10:50,600 --> 00:10:53,920 Speaker 1: used tapes that were kind of in a cassette form factor. 174 00:10:54,280 --> 00:10:57,559 Speaker 1: They were larger than VHS tapes twice as thick really, 175 00:10:58,120 --> 00:11:02,960 Speaker 1: and they would slide into the player lenkwise rather than widthwise, 176 00:11:03,000 --> 00:11:05,880 Speaker 1: the way a typical VCR works, and it was marketed 177 00:11:05,880 --> 00:11:07,760 Speaker 1: as the great time machine because you could set a 178 00:11:07,840 --> 00:11:11,079 Speaker 1: timer on the VCR and tape content off the television 179 00:11:11,080 --> 00:11:13,559 Speaker 1: and then watch it whenever you wanted to. So this 180 00:11:13,600 --> 00:11:17,760 Speaker 1: is an early example of time shifting. I've watched videos 181 00:11:17,800 --> 00:11:21,320 Speaker 1: of this technology and action, and it's pretty clunky stuff. 182 00:11:21,559 --> 00:11:24,960 Speaker 1: The tapes take up a lot of space. Uh. And 183 00:11:25,080 --> 00:11:27,920 Speaker 1: ultimately the format just didn't take off, and Matt Sushida 184 00:11:28,000 --> 00:11:31,680 Speaker 1: slash Panasonic discontinued the players a couple of years later. 185 00:11:31,960 --> 00:11:34,840 Speaker 1: It was clear that either Beta Max or VHS was 186 00:11:34,840 --> 00:11:37,520 Speaker 1: going to win out in that war. Now here's a 187 00:11:37,600 --> 00:11:40,600 Speaker 1: kind of crazy part of this story. I mean, sure, 188 00:11:40,640 --> 00:11:44,000 Speaker 1: a company introduces a new format and it doesn't pan out. 189 00:11:44,120 --> 00:11:47,240 Speaker 1: That's not unusual. We've seen it in other formats like 190 00:11:47,520 --> 00:11:52,000 Speaker 1: HD DVD versus Blu Ray. But what is unusual in 191 00:11:52,000 --> 00:11:55,440 Speaker 1: this case is that Matt Soshida slash Pana Sonic had 192 00:11:55,520 --> 00:11:59,720 Speaker 1: a majority stake in the Victor Company of Japan also 193 00:11:59,760 --> 00:12:03,320 Speaker 1: known as j v C, also known as the company 194 00:12:03,360 --> 00:12:07,120 Speaker 1: behind the VHS format, which actually won the format war. 195 00:12:07,679 --> 00:12:11,080 Speaker 1: So JVC started off as a Japanese subsidiary to the 196 00:12:11,240 --> 00:12:14,800 Speaker 1: Victor Talking Machine company that was a US based company 197 00:12:14,800 --> 00:12:18,920 Speaker 1: that manufactured phonographs and later became a record label. For 198 00:12:18,960 --> 00:12:21,880 Speaker 1: a while, j v C was actually part of our 199 00:12:21,960 --> 00:12:26,360 Speaker 1: c A, which had purchased Victor and that came along 200 00:12:26,400 --> 00:12:29,319 Speaker 1: with it. But during World War Two, the Japanese part 201 00:12:29,320 --> 00:12:31,600 Speaker 1: of the company split away from the rest of Victor 202 00:12:32,000 --> 00:12:35,240 Speaker 1: and it became its own entity. In nineteen fifty three, 203 00:12:35,559 --> 00:12:39,160 Speaker 1: Matt Sushida purchased a majority stake in that company, and 204 00:12:39,200 --> 00:12:43,680 Speaker 1: so JVC was effectively a subsidiary of Matt Sushida. Now 205 00:12:43,720 --> 00:12:47,640 Speaker 1: this means that the parent company, Matt Sushida, was putting 206 00:12:47,679 --> 00:12:51,480 Speaker 1: forward a competing product against one from a company that 207 00:12:51,520 --> 00:12:55,720 Speaker 1: Matt Sushida also owned, and also that format lost because 208 00:12:55,800 --> 00:12:59,960 Speaker 1: ultimately the VHS format would win over VX and more 209 00:13:00,080 --> 00:13:04,160 Speaker 1: noteworthy opponents like Sony's Betamax. JVC would remain part of 210 00:13:04,200 --> 00:13:09,480 Speaker 1: the Matsushida slash Panasonic empire until the two thousand's. As 211 00:13:09,520 --> 00:13:13,480 Speaker 1: for the VHS style of VCR, Panasonic would develop and 212 00:13:13,520 --> 00:13:17,120 Speaker 1: sell those to great effect. The VX system not so much, 213 00:13:17,160 --> 00:13:20,880 Speaker 1: but VHS that one worked like a treat. In nineteen 214 00:13:20,920 --> 00:13:24,560 Speaker 1: seventy seven, the company released a brand of VCRs called 215 00:13:24,760 --> 00:13:29,160 Speaker 1: mac Lord Masaharu Matsushida, who had traveled to the US 216 00:13:29,240 --> 00:13:34,040 Speaker 1: and form agreements with various consumer electronics companies for VCR components. 217 00:13:34,120 --> 00:13:36,839 Speaker 1: And this was the dawn of the home theater era, 218 00:13:37,120 --> 00:13:39,640 Speaker 1: and so many things would change because of that, including 219 00:13:39,679 --> 00:13:43,920 Speaker 1: the entertainment industry and the rise of the video rental business. 220 00:13:43,960 --> 00:13:47,440 Speaker 1: But more than a format failure, the tumultuous events and 221 00:13:47,480 --> 00:13:51,160 Speaker 1: the global consequences were likely a big burden for the 222 00:13:51,200 --> 00:13:54,679 Speaker 1: executive team at Matsoshida. So perhaps it's not a huge 223 00:13:54,679 --> 00:13:58,240 Speaker 1: surprise that in nineteen seventy seven, just four years after 224 00:13:58,320 --> 00:14:02,120 Speaker 1: becoming chairman, Takaha she announced his retirement. And this is 225 00:14:02,120 --> 00:14:06,800 Speaker 1: where we get another exception to the typical Japanese success plan. Konosuke, 226 00:14:07,200 --> 00:14:10,360 Speaker 1: in his eighties and technically retired but still very much 227 00:14:10,440 --> 00:14:13,560 Speaker 1: calling high level shots, decided that his son in law 228 00:14:13,600 --> 00:14:17,160 Speaker 1: would become the new chairman, but an unlikely candidate would 229 00:14:17,200 --> 00:14:21,480 Speaker 1: become the next president of the company. That candidate was 230 00:14:21,720 --> 00:14:27,520 Speaker 1: Toshihiko Yamashita. He had been part of Matsushida's air conditioning division, 231 00:14:27,880 --> 00:14:31,960 Speaker 1: so he was a cool guy, I'm sorry before he 232 00:14:32,160 --> 00:14:35,760 Speaker 1: came into that role. The division, the air conditioning division 233 00:14:36,000 --> 00:14:39,360 Speaker 1: was struggling, but under Yamashita, it turned around and it 234 00:14:39,400 --> 00:14:43,240 Speaker 1: became the number one brand in the market in Japan. Now, 235 00:14:43,280 --> 00:14:47,240 Speaker 1: out of the twenty six director level executives at Matt 236 00:14:47,240 --> 00:14:51,040 Speaker 1: Sushida at the time, he was number twenty five in seniority. 237 00:14:51,080 --> 00:14:54,040 Speaker 1: There was only one other director who was more junior 238 00:14:54,080 --> 00:14:57,960 Speaker 1: than he. In other words, while he showed initiative and leadership, 239 00:14:58,080 --> 00:15:00,760 Speaker 1: typically you would not expect him to be a candidate 240 00:15:00,840 --> 00:15:04,000 Speaker 1: for the president of the company. That role would usually 241 00:15:04,000 --> 00:15:07,600 Speaker 1: go to someone who had much more seniority than he did. 242 00:15:08,000 --> 00:15:13,080 Speaker 1: But on January tenth, nineteen seventy seven, Konosuke Matsushita called 243 00:15:13,200 --> 00:15:16,560 Speaker 1: Yamashita into his office. Kona Suke was eighty two years 244 00:15:16,600 --> 00:15:19,400 Speaker 1: old at this point and he had been retired from 245 00:15:19,440 --> 00:15:22,680 Speaker 1: Matt Sushida for four years, but he was clearly still 246 00:15:23,040 --> 00:15:25,840 Speaker 1: calling or at least influencing, the shots at the company. 247 00:15:26,160 --> 00:15:29,240 Speaker 1: Yamashita wrote in his autobiography that he had no idea 248 00:15:29,320 --> 00:15:30,880 Speaker 1: what the meeting was going to be about. He was 249 00:15:30,880 --> 00:15:33,400 Speaker 1: actually really nervous about it, and he says that when 250 00:15:33,480 --> 00:15:37,080 Speaker 1: Kona Suke offered him the position of president, no one 251 00:15:37,280 --> 00:15:41,560 Speaker 1: was more surprised than Yamashita himself. But is that true. 252 00:15:42,080 --> 00:15:45,520 Speaker 1: We'll find out when we come back after these brief messages. 253 00:15:53,320 --> 00:15:56,120 Speaker 1: So that last bit that I mentioned before the break, 254 00:15:56,160 --> 00:15:59,120 Speaker 1: that Yamashita was the most surprised when it came to 255 00:15:59,240 --> 00:16:01,600 Speaker 1: the fact that Kona Suke had decided to offer him 256 00:16:01,640 --> 00:16:04,840 Speaker 1: the position of president of the company, that's actually debatable. 257 00:16:05,320 --> 00:16:08,920 Speaker 1: When news broke that Yamashita would become president and Masa 258 00:16:09,080 --> 00:16:13,200 Speaker 1: Haru would become the next chairman, the press pounced on 259 00:16:13,400 --> 00:16:16,760 Speaker 1: this and they called it the Yamashita Leap, which was 260 00:16:16,840 --> 00:16:21,240 Speaker 1: a sly reference to a different Yamashita. Haru Hiu Yamashita. 261 00:16:21,280 --> 00:16:23,400 Speaker 1: He was a gymnast who won a gold medal in 262 00:16:23,480 --> 00:16:27,560 Speaker 1: the nineteen sixty four Olympics. More than a few analysts 263 00:16:27,720 --> 00:16:30,640 Speaker 1: predicted that this would turn out to be a bad move, 264 00:16:30,760 --> 00:16:34,400 Speaker 1: that Yamashita was not senior level enough to really be 265 00:16:34,600 --> 00:16:37,960 Speaker 1: the proper leader. As Barakona Suke, he saw that the 266 00:16:38,000 --> 00:16:42,600 Speaker 1: company he founded had grown into a really enormous organization, 267 00:16:43,080 --> 00:16:46,000 Speaker 1: and he had also seen that other companies that went 268 00:16:46,080 --> 00:16:49,760 Speaker 1: through this process often struggled or they would even collapse 269 00:16:49,920 --> 00:16:52,760 Speaker 1: under their own weight. Even companies in the United States 270 00:16:52,960 --> 00:16:56,200 Speaker 1: where he had been so impressed during his tours, he 271 00:16:56,320 --> 00:16:58,800 Speaker 1: wanted to learn from the mistakes of others and avoid 272 00:16:58,840 --> 00:17:02,560 Speaker 1: the problems that often come along with explosive growth. Together, 273 00:17:02,880 --> 00:17:05,440 Speaker 1: he and Yamasheeta identified that the company had really just 274 00:17:05,640 --> 00:17:09,359 Speaker 1: grown too complacent. That while the electronics market in Japan 275 00:17:09,720 --> 00:17:13,280 Speaker 1: was different than years past, the lagging sales could not 276 00:17:13,560 --> 00:17:19,360 Speaker 1: all be blamed on market saturation or maturity, or economic recession. Rather, 277 00:17:19,440 --> 00:17:22,880 Speaker 1: they concluded that the company itself just wasn't innovating enough 278 00:17:23,040 --> 00:17:26,560 Speaker 1: or listening to customers as much as it should. Yamasheeta 279 00:17:26,760 --> 00:17:30,760 Speaker 1: definitely shook things up. He felt that the managerial levels 280 00:17:30,800 --> 00:17:33,159 Speaker 1: in the company were overlapping too much, and so he 281 00:17:33,200 --> 00:17:38,680 Speaker 1: actually eliminated an entire management level in order to remove redundancy. 282 00:17:39,119 --> 00:17:42,720 Speaker 1: He also encouraged employees who felt stagnant to switch to 283 00:17:42,840 --> 00:17:46,560 Speaker 1: a different division and thus bring new perspectives and approaches 284 00:17:46,640 --> 00:17:50,320 Speaker 1: to their new coworkers. He also gained a reputation for 285 00:17:50,400 --> 00:17:54,320 Speaker 1: trusting the divisional business decisions to the executive management teams 286 00:17:54,440 --> 00:17:57,719 Speaker 1: at the head of each division. He would only occasionally 287 00:17:57,840 --> 00:18:01,040 Speaker 1: step in himself and direct things, and when you did 288 00:18:01,160 --> 00:18:04,520 Speaker 1: step in, it could be more than a little disruptive. So, 289 00:18:04,600 --> 00:18:08,560 Speaker 1: for example, there was a time when Yamashita essentially made 290 00:18:08,600 --> 00:18:11,480 Speaker 1: a promise to our c A that Panasonic would create 291 00:18:11,600 --> 00:18:15,359 Speaker 1: a four hour long VHS tape, and at the time, 292 00:18:15,520 --> 00:18:19,040 Speaker 1: the internal teams at Matsushida had not yet even made 293 00:18:19,160 --> 00:18:22,240 Speaker 1: a two hour tape. But a promise is a promise, 294 00:18:22,440 --> 00:18:26,280 Speaker 1: and so their teams got to work feverishly tackling engineering 295 00:18:26,400 --> 00:18:29,639 Speaker 1: challenges and ultimately producing the four hour tape, and that 296 00:18:29,720 --> 00:18:31,800 Speaker 1: would go on to be one of the big successes 297 00:18:31,880 --> 00:18:35,359 Speaker 1: for the company at this time because customers loved having 298 00:18:35,440 --> 00:18:38,840 Speaker 1: that much tape to be able to record stuff. While 299 00:18:38,880 --> 00:18:42,320 Speaker 1: matt Sushida slash Panasonic was briefly in the business of 300 00:18:42,400 --> 00:18:46,720 Speaker 1: designing mainframe computers in the nineteen sixties, that environment was 301 00:18:46,800 --> 00:18:49,399 Speaker 1: a little too competitive and Kona Suke had decided to 302 00:18:49,520 --> 00:18:53,480 Speaker 1: withdraw from the computer industry. Yamasheeda took another look at 303 00:18:53,480 --> 00:18:55,879 Speaker 1: the field and decided that the main frame business was 304 00:18:55,960 --> 00:18:58,760 Speaker 1: still too competitive and it was also starting to peter out. 305 00:18:58,800 --> 00:19:02,000 Speaker 1: There was a transition moving toward many computers and then 306 00:19:02,080 --> 00:19:05,520 Speaker 1: micro computers, and so he decided that the company should 307 00:19:05,600 --> 00:19:08,720 Speaker 1: still be in the business, but not in mainframes. He 308 00:19:08,760 --> 00:19:12,480 Speaker 1: wanted to get into the semiconductor business. One of the 309 00:19:12,560 --> 00:19:16,760 Speaker 1: big procedural changes that happened under Yamashida's leadership was in 310 00:19:16,840 --> 00:19:20,360 Speaker 1: the way that the company would lay out its plans. 311 00:19:21,200 --> 00:19:25,280 Speaker 1: Had been creating year long plans for the company, but 312 00:19:25,560 --> 00:19:28,760 Speaker 1: they were finding that the volatility and markets, and the 313 00:19:28,920 --> 00:19:33,239 Speaker 1: various challenges and trade agreements for international trade, as well 314 00:19:33,320 --> 00:19:38,240 Speaker 1: as the fluctuations and currency value often meant that a 315 00:19:38,359 --> 00:19:42,800 Speaker 1: year long plan could easily be disruptive by a few changes. 316 00:19:43,040 --> 00:19:45,680 Speaker 1: It just was too hard to stay on track. He 317 00:19:45,720 --> 00:19:49,560 Speaker 1: gets sidetracked too quickly. So instead, Yamashida and his team 318 00:19:49,960 --> 00:19:53,119 Speaker 1: laid out a three year plan, and that gave them 319 00:19:53,240 --> 00:19:56,159 Speaker 1: enough room to allow for some volatility. Things could go 320 00:19:56,200 --> 00:19:59,600 Speaker 1: a little you know, Las Vegas crazy style for a while. 321 00:20:00,160 --> 00:20:02,800 Speaker 1: Then they could settle down. And if you have three 322 00:20:02,960 --> 00:20:05,720 Speaker 1: years to achieve a goal, even if it's a more 323 00:20:05,760 --> 00:20:09,480 Speaker 1: ambitious goal than a year long goal, and it gave 324 00:20:09,560 --> 00:20:12,200 Speaker 1: you more of a chance for success. This was all 325 00:20:12,359 --> 00:20:16,119 Speaker 1: in an attempt to be more proactive rather than reactive. 326 00:20:16,520 --> 00:20:18,359 Speaker 1: And the reason I bring this up is that we 327 00:20:18,440 --> 00:20:23,399 Speaker 1: often see tech companies, and honestly companies in all industries 328 00:20:23,920 --> 00:20:29,560 Speaker 1: give a fanatical dedication toward short term gains, and sometimes 329 00:20:29,800 --> 00:20:33,280 Speaker 1: that's at the cost of long term success. You could argue, 330 00:20:33,640 --> 00:20:36,760 Speaker 1: and I certainly have argued, that this is kind of 331 00:20:36,880 --> 00:20:40,280 Speaker 1: tied with the business strategy of catering all your decisions 332 00:20:40,320 --> 00:20:44,680 Speaker 1: in some way around returning value to shareholders, which is 333 00:20:44,720 --> 00:20:47,480 Speaker 1: a strategy I'm not terribly fond of because it frequently 334 00:20:48,000 --> 00:20:51,280 Speaker 1: isn't great for anyone in the long term, and it 335 00:20:51,400 --> 00:20:55,480 Speaker 1: really feeds into stuff like speculation, which is not generally 336 00:20:55,520 --> 00:20:59,399 Speaker 1: a good thing. In two, Panasonic was one of the 337 00:20:59,600 --> 00:21:03,159 Speaker 1: first companies to develop a compact disc player. Now, the 338 00:21:03,280 --> 00:21:05,520 Speaker 1: history of the CD actually dates all the way back 339 00:21:05,520 --> 00:21:08,560 Speaker 1: to the nineteen sixties, and mostly in the nineteen seventies. 340 00:21:09,000 --> 00:21:13,080 Speaker 1: Sony and Phillips were both independently developing this technology in 341 00:21:13,240 --> 00:21:17,240 Speaker 1: the seventies, but then ultimately they would join forces Vultron 342 00:21:17,440 --> 00:21:20,600 Speaker 1: style in order to further refine the technology and to 343 00:21:20,800 --> 00:21:23,920 Speaker 1: establish standards. That would be important as it would help 344 00:21:24,000 --> 00:21:28,359 Speaker 1: sidestep the issue of competing and incompatible formats on the market. 345 00:21:28,840 --> 00:21:31,680 Speaker 1: That's something that tends to be a great frustration to 346 00:21:31,760 --> 00:21:35,160 Speaker 1: consumers because there's nothing like going out and buying something 347 00:21:35,280 --> 00:21:37,760 Speaker 1: that's going to run on some form of media player 348 00:21:38,280 --> 00:21:40,920 Speaker 1: and find out that, oh, the media player you have 349 00:21:41,560 --> 00:21:45,040 Speaker 1: isn't compatible with the media you bought. That's a terrible 350 00:21:45,160 --> 00:21:48,040 Speaker 1: feeling and it does happen, so they wanted to get 351 00:21:48,080 --> 00:21:51,520 Speaker 1: around that. So once again, Panasonic did not have a 352 00:21:51,680 --> 00:21:55,080 Speaker 1: leadership role in the development of this technology, but the 353 00:21:55,160 --> 00:21:58,000 Speaker 1: company was able to build out a CD player and 354 00:21:58,119 --> 00:22:01,120 Speaker 1: launch it in two when player has first started hitting 355 00:22:01,160 --> 00:22:05,040 Speaker 1: the market. However, this does mean I should probably talk 356 00:22:05,200 --> 00:22:08,440 Speaker 1: a bit about how compact discs work, since I've done 357 00:22:08,480 --> 00:22:11,639 Speaker 1: that for magnetic storage in this series. And if you 358 00:22:11,760 --> 00:22:16,760 Speaker 1: look at a standard one sided compact disc, you'll likely 359 00:22:16,880 --> 00:22:19,920 Speaker 1: see some sort of label on one side and the 360 00:22:20,000 --> 00:22:22,800 Speaker 1: other side will be really shiny, almost like a mirror, 361 00:22:23,440 --> 00:22:25,760 Speaker 1: and you put the disc in a player label side 362 00:22:25,840 --> 00:22:29,280 Speaker 1: up or a CD drive and then the magic happens. 363 00:22:29,359 --> 00:22:32,800 Speaker 1: But how is the data actually stored on the disk. Well, 364 00:22:32,840 --> 00:22:36,040 Speaker 1: in this case, this is not a magnetic system. It's 365 00:22:36,040 --> 00:22:39,320 Speaker 1: an optical system. That means that this is a system 366 00:22:39,359 --> 00:22:42,960 Speaker 1: that uses light and optics like mirrors and lenses to 367 00:22:43,280 --> 00:22:48,240 Speaker 1: encode and decode information. It's also a digital format, not 368 00:22:48,560 --> 00:22:52,359 Speaker 1: an analog format. So let's start by talking about a 369 00:22:52,400 --> 00:22:56,280 Speaker 1: blank CD as nothing stored on that glossy side. When 370 00:22:56,320 --> 00:22:59,680 Speaker 1: a machine writes to c D, it uses a powerful 371 00:22:59,760 --> 00:23:04,000 Speaker 1: lazy or to carve out tiny indentations in a spiral 372 00:23:04,359 --> 00:23:07,600 Speaker 1: on that c D. The spiral actually starts near the 373 00:23:07,760 --> 00:23:09,840 Speaker 1: center of the c D, So this is kind of 374 00:23:10,000 --> 00:23:12,800 Speaker 1: the opposite of how a vinyl record works, where you 375 00:23:12,840 --> 00:23:15,639 Speaker 1: would set a needle toward the outer edge of the 376 00:23:15,720 --> 00:23:19,400 Speaker 1: record and the needle would spiral inward. So what you're 377 00:23:19,480 --> 00:23:22,119 Speaker 1: left with are if you were to look at this 378 00:23:22,240 --> 00:23:26,840 Speaker 1: under a microscope, you'd see a series of reflective surfaces 379 00:23:27,040 --> 00:23:30,960 Speaker 1: on that CD as well as some little bumps, and 380 00:23:31,640 --> 00:23:35,680 Speaker 1: those represent ones and zeros, respectively. A reflective segment is 381 00:23:35,720 --> 00:23:39,200 Speaker 1: called a land that would be a one, and a 382 00:23:39,359 --> 00:23:42,040 Speaker 1: bump is called a pit that would be a zero. 383 00:23:42,119 --> 00:23:43,960 Speaker 1: So why is a bump called a pit? Well, it 384 00:23:44,000 --> 00:23:45,720 Speaker 1: all depends on how you're looking at the c D. 385 00:23:46,280 --> 00:23:48,879 Speaker 1: You look at the CD one way, you're looking at bumps. 386 00:23:49,240 --> 00:23:51,119 Speaker 1: You turn the c D and you look at it 387 00:23:51,160 --> 00:23:55,119 Speaker 1: a different way. You're looking at pits. And this is 388 00:23:55,240 --> 00:24:00,400 Speaker 1: binary information ones and zeros, So that's a binary unit. 389 00:24:01,000 --> 00:24:03,680 Speaker 1: You can think of this like a series of light switches, 390 00:24:03,760 --> 00:24:06,399 Speaker 1: where one is a switch in the on position. And 391 00:24:06,600 --> 00:24:10,399 Speaker 1: zeros in the switch in an off position. Using lots 392 00:24:10,480 --> 00:24:13,639 Speaker 1: of bits, like millions of them, you can describe all 393 00:24:13,680 --> 00:24:17,159 Speaker 1: sorts of stuff, including audio. So this brings us to 394 00:24:17,359 --> 00:24:21,720 Speaker 1: digital versus analog, and analog recording is a record of 395 00:24:21,800 --> 00:24:26,000 Speaker 1: a continuous input signal, but a digital recording is more 396 00:24:26,119 --> 00:24:30,320 Speaker 1: like a very detailed description of an original input. So 397 00:24:30,440 --> 00:24:32,440 Speaker 1: in a way, we can think of an analogy in 398 00:24:32,520 --> 00:24:36,680 Speaker 1: which an analog signal is a script from a play. 399 00:24:36,960 --> 00:24:40,080 Speaker 1: It's got all the stage directions in it, character and descriptions, 400 00:24:40,160 --> 00:24:43,879 Speaker 1: it's got all the dialogue in it. Everything's in the script, 401 00:24:44,480 --> 00:24:48,399 Speaker 1: But a digital signal is more like someone goes to 402 00:24:48,520 --> 00:24:52,000 Speaker 1: the play and takes very detailed notes of everything they 403 00:24:52,119 --> 00:24:55,560 Speaker 1: see and hear, and so they create as best a 404 00:24:55,640 --> 00:24:59,439 Speaker 1: description of the play as they possibly can. So digital 405 00:24:59,520 --> 00:25:04,119 Speaker 1: recording describe stuff like audio by breaking it down, So 406 00:25:04,320 --> 00:25:06,560 Speaker 1: they might break it down into things like pitch and 407 00:25:06,800 --> 00:25:12,160 Speaker 1: loudness and other values that can be expressed as bits. Moreover, 408 00:25:12,640 --> 00:25:15,200 Speaker 1: there's also a concert we have to talk about called 409 00:25:15,280 --> 00:25:19,879 Speaker 1: a sample rate. This describes how frequently every second the 410 00:25:19,960 --> 00:25:23,560 Speaker 1: system is analyzing this signal in an effort to describe it. 411 00:25:23,840 --> 00:25:27,080 Speaker 1: Higher sample rates require a lot more data, but they 412 00:25:27,160 --> 00:25:31,359 Speaker 1: also result in a more faithful representation of the original sound. 413 00:25:31,840 --> 00:25:34,480 Speaker 1: So to go back to our play analogy, let's say 414 00:25:34,480 --> 00:25:37,960 Speaker 1: we've got two digital like observers, so this is two 415 00:25:38,080 --> 00:25:41,800 Speaker 1: note takers. But our two note takers aren't able to 416 00:25:41,920 --> 00:25:44,480 Speaker 1: just sit in the theater the whole time. They actually 417 00:25:44,560 --> 00:25:47,040 Speaker 1: have to duck in and out. So one of the 418 00:25:47,200 --> 00:25:50,880 Speaker 1: two observers is allowed to jump in every thirty seconds 419 00:25:50,960 --> 00:25:52,800 Speaker 1: and they can stick around for a few seconds and 420 00:25:52,920 --> 00:25:54,440 Speaker 1: jot down all the notes, and then they have to 421 00:25:54,840 --> 00:25:57,560 Speaker 1: duck back out until the next thirty seconds comes around. 422 00:25:58,240 --> 00:26:01,560 Speaker 1: The other one can only go win every five minutes 423 00:26:02,000 --> 00:26:04,239 Speaker 1: for a few seconds at a time and take very 424 00:26:04,560 --> 00:26:06,400 Speaker 1: detailed notes, but then they have to leave and wait 425 00:26:06,480 --> 00:26:10,680 Speaker 1: another five minutes. At the end of this very strange experience, 426 00:26:11,080 --> 00:26:14,440 Speaker 1: the one who ducked in more frequently will probably have 427 00:26:14,680 --> 00:26:17,200 Speaker 1: a better understanding of what was going on in the 428 00:26:17,280 --> 00:26:20,119 Speaker 1: play from moment to moment. And that's kind of like 429 00:26:20,640 --> 00:26:24,720 Speaker 1: sample rates. The more frequently you sample, the more accurate 430 00:26:24,960 --> 00:26:29,800 Speaker 1: the copy is to the original, you know, performance. When 431 00:26:29,840 --> 00:26:32,840 Speaker 1: you put a CD into a player, the player uses 432 00:26:32,920 --> 00:26:35,680 Speaker 1: a laser to read the c D. This is not 433 00:26:35,880 --> 00:26:38,040 Speaker 1: as powerful a laser as the one that was used 434 00:26:38,080 --> 00:26:39,920 Speaker 1: to write to the c D in the first place. 435 00:26:40,359 --> 00:26:43,000 Speaker 1: And you need a laser because you have to focus 436 00:26:43,560 --> 00:26:46,640 Speaker 1: a very fine beam of light to pick up these 437 00:26:46,800 --> 00:26:51,480 Speaker 1: pits and lands on the c D. A sensor registers 438 00:26:51,600 --> 00:26:54,600 Speaker 1: the zeros and ones, and the Dakota takes the information 439 00:26:54,720 --> 00:26:57,760 Speaker 1: and turns it into something meaningful that can be sent to, 440 00:26:58,280 --> 00:27:02,199 Speaker 1: you know, amplifiers and speakers. So CDs are very different 441 00:27:02,520 --> 00:27:05,760 Speaker 1: from stuff like magnetic tape. They also are not affected 442 00:27:05,840 --> 00:27:09,919 Speaker 1: by magnets, whereas you can wipe out recording on tape 443 00:27:10,000 --> 00:27:12,360 Speaker 1: if you bring that tape too close to a really 444 00:27:12,440 --> 00:27:17,400 Speaker 1: powerful magnet. However, because CDs rely on light, it means 445 00:27:17,520 --> 00:27:20,600 Speaker 1: that if you get any scratches or dirt or smudges 446 00:27:21,200 --> 00:27:24,040 Speaker 1: on the reflective side of a c D, it causes 447 00:27:24,119 --> 00:27:27,480 Speaker 1: problems because the laser won't be able to effectively read 448 00:27:27,560 --> 00:27:30,800 Speaker 1: those pits and lands on that side of the disk. 449 00:27:31,560 --> 00:27:33,480 Speaker 1: There's a lot more I could go into, such as 450 00:27:33,520 --> 00:27:37,000 Speaker 1: how rewrite herble CDs work, but we're gonna leave off 451 00:27:37,080 --> 00:27:39,000 Speaker 1: of this for now and carry on with our history. 452 00:27:39,680 --> 00:27:43,520 Speaker 1: CD players were really expensive when they first debuted. In fact, 453 00:27:43,640 --> 00:27:46,800 Speaker 1: I didn't get my first CD player until maybe the 454 00:27:46,960 --> 00:27:50,320 Speaker 1: early nineteen nineties, and even then it was a little 455 00:27:50,480 --> 00:27:54,920 Speaker 1: portable CD player unit. But eventually the CD would overtake 456 00:27:55,000 --> 00:27:59,040 Speaker 1: and largely replace other formats like cassette tapes and vinyl records, 457 00:27:59,440 --> 00:28:03,280 Speaker 1: and it all would launch endless arguments among audio files 458 00:28:03,359 --> 00:28:06,879 Speaker 1: about whether a digital recording can ever match the fidelity 459 00:28:07,000 --> 00:28:09,919 Speaker 1: of an analog recording, and I'll just back away from 460 00:28:09,960 --> 00:28:14,119 Speaker 1: that particular hornets nest. By the mid nineteen eighties, international 461 00:28:14,240 --> 00:28:18,439 Speaker 1: trade agreements were putting the squeeze on Japan. Yamashida agreed 462 00:28:18,480 --> 00:28:22,400 Speaker 1: to resign his position as president, becoming an executive advisor, 463 00:28:22,720 --> 00:28:24,760 Speaker 1: and the new president of the company was a man 464 00:28:24,840 --> 00:28:27,720 Speaker 1: who had played a fundamental part in the most recent 465 00:28:27,840 --> 00:28:32,280 Speaker 1: three year strategic planning phase. His name was Akio Tony. 466 00:28:33,040 --> 00:28:36,159 Speaker 1: Tani defined four areas that the company would focus on 467 00:28:36,400 --> 00:28:42,560 Speaker 1: semiconductors the next generation and audio visual electronics, automated manufacturing equipment, 468 00:28:42,880 --> 00:28:46,840 Speaker 1: and communications equipment like cell phones and stuff. He also 469 00:28:46,920 --> 00:28:51,040 Speaker 1: expanded the sales department and he specialized them, and in 470 00:28:51,880 --> 00:28:56,200 Speaker 1: seven he introduced a concept to the company called human Electronics, 471 00:28:56,680 --> 00:28:58,560 Speaker 1: which I thought at first met they were going to 472 00:28:58,680 --> 00:29:02,320 Speaker 1: make cyborgs, and I got really excited, but no. What 473 00:29:02,480 --> 00:29:05,400 Speaker 1: he meant by that was a product design process that 474 00:29:05,440 --> 00:29:08,280 Speaker 1: would pay more attention to what people needed and wanted 475 00:29:08,760 --> 00:29:11,720 Speaker 1: and less on being flashy or throwing in features just 476 00:29:11,960 --> 00:29:16,120 Speaker 1: to have them included in the product. In seven, the 477 00:29:16,200 --> 00:29:19,840 Speaker 1: company established its first manufacturing facility in China. The new 478 00:29:19,920 --> 00:29:23,720 Speaker 1: facility would make CRT s or cathode ray tubes. These 479 00:29:23,760 --> 00:29:26,520 Speaker 1: were used in television's at the time, though it wouldn't 480 00:29:26,560 --> 00:29:28,800 Speaker 1: be much longer before the industry would kind of move 481 00:29:28,840 --> 00:29:33,080 Speaker 1: away from CRT television's toward other options like l C 482 00:29:33,240 --> 00:29:37,160 Speaker 1: D s and plasma TVs. Also in night seven, Tani 483 00:29:37,240 --> 00:29:41,000 Speaker 1: announced that the Matt Sushida Electrical Industrial Company and the 484 00:29:41,040 --> 00:29:45,800 Speaker 1: Matt Sushida Electric Trading Company, which technically were two separate entities, 485 00:29:46,160 --> 00:29:48,880 Speaker 1: would consolidate in a merger. And this was all part 486 00:29:48,920 --> 00:29:51,840 Speaker 1: of the strategy to step up the international sales in 487 00:29:51,880 --> 00:29:54,000 Speaker 1: the company, and part of this was to try and 488 00:29:54,080 --> 00:29:58,959 Speaker 1: overcome increasingly challenging obstacles that came with intense trade disagreements 489 00:29:59,000 --> 00:30:03,320 Speaker 1: between Japan and other nations. Japanese companies, as a general rule, 490 00:30:03,680 --> 00:30:07,239 Speaker 1: we're finding it challenging to export goods, and so they 491 00:30:07,280 --> 00:30:10,840 Speaker 1: began to establish branches in other countries where they could 492 00:30:10,880 --> 00:30:14,560 Speaker 1: have manufacturing facilities and sales teams there who worked on 493 00:30:14,640 --> 00:30:17,040 Speaker 1: a more local level that would get around some of 494 00:30:17,080 --> 00:30:21,920 Speaker 1: those pesky trade obstacles. All right, we're gonna blast through 495 00:30:22,080 --> 00:30:25,680 Speaker 1: the rest of the history of this company very very shortly, 496 00:30:25,920 --> 00:30:38,440 Speaker 1: but first let's take another quick break. On April nine, 497 00:30:38,760 --> 00:30:43,920 Speaker 1: Kona Suke Matsushida, the founder of Matsushida slash Panasonic, passed 498 00:30:43,960 --> 00:30:47,720 Speaker 1: away at the age of ninety four. Even after his 499 00:30:47,840 --> 00:30:50,840 Speaker 1: retirement in the nineteen seventies, he had continued to play 500 00:30:50,920 --> 00:30:53,600 Speaker 1: an important role in directing the course of the company 501 00:30:53,680 --> 00:30:56,960 Speaker 1: he had founded. He had a rather lauded reputation in 502 00:30:57,040 --> 00:31:00,320 Speaker 1: the company and in Japan. Though we can't nor the 503 00:31:00,400 --> 00:31:02,640 Speaker 1: fact that his company also got involved in some fairly 504 00:31:02,760 --> 00:31:07,720 Speaker 1: questionable activities involving price fixing and unfair competitive practices. Still, 505 00:31:08,160 --> 00:31:13,160 Speaker 1: he legitimately established a global company from extremely humble beginnings, 506 00:31:13,320 --> 00:31:17,400 Speaker 1: so you can't ignore that in nineteen nine, matts Ashida 507 00:31:17,480 --> 00:31:21,760 Speaker 1: slash Panasonic made what in retrospect you could call a 508 00:31:22,000 --> 00:31:26,240 Speaker 1: bone headed mistake. The company, eager to keep up with 509 00:31:26,400 --> 00:31:30,040 Speaker 1: their major competitor, Sony sort of the Darth Vader, to 510 00:31:30,160 --> 00:31:35,160 Speaker 1: panasonicx Luke Skywalker decided to get into the content business 511 00:31:35,320 --> 00:31:40,800 Speaker 1: the entertainment industry. Sony had acquired Columbia Pictures Entertainment in 512 00:31:40,920 --> 00:31:44,720 Speaker 1: nine and fun fact, that company had previously been owned 513 00:31:44,920 --> 00:31:49,960 Speaker 1: by Coca Cola. Because companies are weird. The movie business 514 00:31:50,280 --> 00:31:53,840 Speaker 1: is super weird, and there was this crazy idea of 515 00:31:54,040 --> 00:31:59,320 Speaker 1: synergy that really made more sense and concept than an execution. 516 00:31:59,480 --> 00:32:03,720 Speaker 1: But to keep up with Sony, Panasonic went and acquired 517 00:32:03,800 --> 00:32:07,760 Speaker 1: a different entertainment company, m c A. M c A 518 00:32:08,240 --> 00:32:12,600 Speaker 1: and I mean the company, not the Beastie Boy started 519 00:32:12,640 --> 00:32:15,840 Speaker 1: out as the Music Corporation of America that had been 520 00:32:15,920 --> 00:32:20,400 Speaker 1: founded in nineteen twenty four. Over the years, uh it 521 00:32:20,640 --> 00:32:22,800 Speaker 1: changed a great deal. When it first started, it was 522 00:32:22,880 --> 00:32:26,360 Speaker 1: a talent agency, but by it had become a fully 523 00:32:26,440 --> 00:32:31,440 Speaker 1: fledged entertainment company complete with movie and music and television studios. 524 00:32:32,080 --> 00:32:35,120 Speaker 1: In fact, it was the owner of Universal Studios. The 525 00:32:35,280 --> 00:32:38,560 Speaker 1: deal amounted to somewhere between six point six and seven 526 00:32:38,640 --> 00:32:42,160 Speaker 1: point five billion dollars. It all depends on which source 527 00:32:42,240 --> 00:32:47,040 Speaker 1: you're looking at. The love affair between Matsushida and Hollywood 528 00:32:47,600 --> 00:32:50,760 Speaker 1: didn't last very long. In fact, you could cynically joke 529 00:32:50,880 --> 00:32:53,560 Speaker 1: that it was on par for Hollywood marriages in general. 530 00:32:54,040 --> 00:32:57,720 Speaker 1: Mattsshida would sell off eighty percent of its steak in 531 00:32:57,920 --> 00:33:01,360 Speaker 1: m c A just five years years after the acquisition. 532 00:33:03,400 --> 00:33:08,640 Speaker 1: And here's another crazy thing. Seagram was the buyer. Yeah, Seagram, 533 00:33:08,920 --> 00:33:12,880 Speaker 1: the whiskey company. Seagram would turn around in two thousand 534 00:33:13,160 --> 00:33:16,880 Speaker 1: and sell off its stake to Vivendi, and then Vivendi 535 00:33:16,920 --> 00:33:20,160 Speaker 1: would ultimately purchase the remaining interest in m c A 536 00:33:20,560 --> 00:33:23,920 Speaker 1: that was still held by Matt Sushida in two thousand six. 537 00:33:24,480 --> 00:33:28,200 Speaker 1: So ultimately two thousand six is when Matt Sushida completely 538 00:33:28,320 --> 00:33:31,880 Speaker 1: got out of the entertainment industry business. Now, the time 539 00:33:31,960 --> 00:33:35,640 Speaker 1: that Matt Sushida owned m c A was turbulent. There 540 00:33:35,680 --> 00:33:39,640 Speaker 1: were stories of executive level disputes, and the company struggled 541 00:33:39,680 --> 00:33:43,480 Speaker 1: with low profits. The movie business was far more volatile 542 00:33:43,720 --> 00:33:47,880 Speaker 1: than the electronics company had anticipated, and it certainly was 543 00:33:47,960 --> 00:33:50,640 Speaker 1: more volatile than they cared for, and it was a 544 00:33:50,720 --> 00:33:52,920 Speaker 1: really a bad fit from the start. It pointed to 545 00:33:53,000 --> 00:33:57,520 Speaker 1: the danger of diversifying your business without real strategy behind 546 00:33:57,680 --> 00:34:01,560 Speaker 1: the diversification. It's it's one thing to make sure you're 547 00:34:01,640 --> 00:34:05,840 Speaker 1: not completely dependent upon one business, but it's another to 548 00:34:05,960 --> 00:34:09,560 Speaker 1: just grab any business that happens to be nearby, and 549 00:34:09,880 --> 00:34:14,640 Speaker 1: ultimately Mattsoshida paid for this. Upon selling their steak, the 550 00:34:14,719 --> 00:34:19,319 Speaker 1: company brought in five five billion yen, but it had 551 00:34:19,400 --> 00:34:24,759 Speaker 1: purchased m c A for eight hundred fifty billion yen, 552 00:34:25,400 --> 00:34:27,799 Speaker 1: and the value of m c A actually went up 553 00:34:28,280 --> 00:34:31,080 Speaker 1: during its tenure as part of Matt Sushida if you 554 00:34:31,160 --> 00:34:34,240 Speaker 1: look at it from a dollar value, but the value 555 00:34:34,280 --> 00:34:37,279 Speaker 1: of the yen changed dramatically in that same span of time, 556 00:34:37,560 --> 00:34:41,880 Speaker 1: so overall it became a loss, but back to very quickly. 557 00:34:42,200 --> 00:34:46,080 Speaker 1: That's also when Panasonic released the panic Com Pro note 558 00:34:46,520 --> 00:34:50,319 Speaker 1: This was the first notebook computer Panasonic ever released. If 559 00:34:50,360 --> 00:34:51,919 Speaker 1: you look at a picture of the thing, it's really 560 00:34:52,080 --> 00:34:54,719 Speaker 1: chunky looking. It's one of those big laptops that you 561 00:34:54,760 --> 00:34:57,560 Speaker 1: probably wouldn't actually want to have on your lap. Panasonic 562 00:34:57,680 --> 00:35:00,200 Speaker 1: also introduced a cellular phone called the mo of a 563 00:35:00,360 --> 00:35:04,520 Speaker 1: P the following year, and a rewriteable optical disc recorder 564 00:35:04,800 --> 00:35:07,000 Speaker 1: that this was more of an industrial thing, not a 565 00:35:07,440 --> 00:35:13,000 Speaker 1: home electronics thing. That also came out in ninety three. 566 00:35:13,520 --> 00:35:17,719 Speaker 1: After many decades of partnership Matt Sushida and Phillips, the 567 00:35:17,840 --> 00:35:22,240 Speaker 1: Dutch electronics company called it quits. Panasonic purchased the stake 568 00:35:22,400 --> 00:35:27,120 Speaker 1: that Phillips owned in Mattsshida Electronics Corporation, which was again 569 00:35:27,320 --> 00:35:30,360 Speaker 1: about thirty five percent of the ownership of the company, 570 00:35:30,640 --> 00:35:33,440 Speaker 1: and they did it for a hundred eighty five billion yen. 571 00:35:33,960 --> 00:35:37,640 Speaker 1: The two companies did agree to a cross patent licensing deal, 572 00:35:38,160 --> 00:35:41,239 Speaker 1: so it's not like there were hard feelings. Also, this 573 00:35:41,400 --> 00:35:45,960 Speaker 1: gets into how Panasonic is more nebulous than as a 574 00:35:46,080 --> 00:35:49,279 Speaker 1: single entity. It's really a lot of different companies that 575 00:35:49,400 --> 00:35:52,800 Speaker 1: are all related to one another, some having ownership and 576 00:35:52,920 --> 00:35:55,600 Speaker 1: other companies in the group. But the more I looked 577 00:35:55,640 --> 00:35:58,040 Speaker 1: into it so I could try and explain it, though 578 00:35:58,160 --> 00:36:00,279 Speaker 1: more I was convinced that I'm just not had out 579 00:36:00,320 --> 00:36:03,320 Speaker 1: for that level of madness. It's why I really like 580 00:36:03,440 --> 00:36:07,799 Speaker 1: describing technology. Technology either works or it doesn't work. There's 581 00:36:07,800 --> 00:36:10,920 Speaker 1: not a lot of ambiguity there. Corporate structures and governance 582 00:36:11,000 --> 00:36:13,520 Speaker 1: though that stuff, I mean, you might as well call 583 00:36:13,560 --> 00:36:17,279 Speaker 1: it magic to me. Anyway. Japan was going through an 584 00:36:17,360 --> 00:36:21,640 Speaker 1: economic recession in ninety three and Panasonic was hurting. President 585 00:36:21,719 --> 00:36:27,080 Speaker 1: Audio Tani facing pressure with Panasonic's poor performance, particularly from 586 00:36:27,280 --> 00:36:31,200 Speaker 1: Chairman Masaharu Matsushida, who is still in charge of that point, 587 00:36:31,280 --> 00:36:34,640 Speaker 1: This is by the way uh Konoski's son in law, 588 00:36:35,560 --> 00:36:39,000 Speaker 1: so Tani would resign his position and his replacement was 589 00:36:39,120 --> 00:36:44,200 Speaker 1: Yoichi Morishita. And Morishida, unlike his predecessors, was not someone 590 00:36:44,640 --> 00:36:47,800 Speaker 1: that had studied under Konosuke. He he was not a 591 00:36:49,239 --> 00:36:52,239 Speaker 1: candidate that had been groomed by the founder. He would 592 00:36:52,280 --> 00:36:54,719 Speaker 1: go through the process of trying to shed some of 593 00:36:54,800 --> 00:36:59,240 Speaker 1: the bloat that the Matsushida Company had accumulated, including selling 594 00:36:59,320 --> 00:37:04,000 Speaker 1: off that stake in m C a in. During his tenure, 595 00:37:04,320 --> 00:37:07,200 Speaker 1: the company also got into the business of digital television 596 00:37:07,280 --> 00:37:12,399 Speaker 1: sets and DVD players, navigation systems, plasma TVs, which would 597 00:37:12,440 --> 00:37:14,880 Speaker 1: kind of come back to haunt them, and more. The 598 00:37:14,960 --> 00:37:18,120 Speaker 1: Panasonic brand became more popular in the US, though the 599 00:37:18,160 --> 00:37:21,480 Speaker 1: company had not yet launched a defining technology the way 600 00:37:21,560 --> 00:37:24,360 Speaker 1: Sony had done was say the Walkman. A lot of 601 00:37:24,640 --> 00:37:28,520 Speaker 1: Morishida's work was in course corrections and attempts to return 602 00:37:28,560 --> 00:37:32,440 Speaker 1: to profitability. In Japan, it was still a struggle. In 603 00:37:32,640 --> 00:37:37,680 Speaker 1: nineteen nine, for example, the company's operating profit fell eighteen percent, 604 00:37:37,840 --> 00:37:41,520 Speaker 1: which is not good. We get another big change in 605 00:37:41,680 --> 00:37:47,560 Speaker 1: leadership in two thousand, Chairman Masaharu Matsushida retired that essentially 606 00:37:47,800 --> 00:37:52,879 Speaker 1: ended the Matsoshida domination of the company. Yoichi Motorshita would 607 00:37:52,880 --> 00:37:55,320 Speaker 1: become the new chairman of the company, and there was 608 00:37:55,640 --> 00:38:00,360 Speaker 1: talk originally of Konosuke's grandson, Masayuki Matsushita takeing over the 609 00:38:00,360 --> 00:38:03,520 Speaker 1: position of president, but the board of directors had concerns 610 00:38:03,600 --> 00:38:07,320 Speaker 1: that perhaps Masayuki lacked the leadership qualities that they wanted, 611 00:38:07,960 --> 00:38:09,799 Speaker 1: and that maybe it was a better idea to move 612 00:38:09,840 --> 00:38:13,640 Speaker 1: away from the Matsushida dynasty, so instead they chose the 613 00:38:13,760 --> 00:38:18,759 Speaker 1: former CEO of Matsushida Electric Corporation of America, Kunio Nakamota. 614 00:38:19,440 --> 00:38:23,880 Speaker 1: Nakamotora had a huge challenge. At this point, Matsushida slash 615 00:38:23,920 --> 00:38:28,640 Speaker 1: Panasonic had become truly gargantuan in Japan alone. The company 616 00:38:28,719 --> 00:38:32,120 Speaker 1: had one hundred forty divisions, and like a lot of 617 00:38:32,200 --> 00:38:36,239 Speaker 1: bigger companies grown haphazardly, there was a lot of redundancy. 618 00:38:36,600 --> 00:38:40,120 Speaker 1: There was a lot of bureaucracy. It was becoming increasingly difficult, 619 00:38:40,200 --> 00:38:43,279 Speaker 1: if not impossible, to operate the company in a nimble way, 620 00:38:43,719 --> 00:38:46,400 Speaker 1: so he needed to simplify things quite a bit. He 621 00:38:46,520 --> 00:38:50,280 Speaker 1: also made some controversial decisions within the company. For example, 622 00:38:50,400 --> 00:38:53,800 Speaker 1: he pulled design decisions away from engineering teams and he 623 00:38:53,920 --> 00:38:56,400 Speaker 1: gave them to marketing teams. And the idea was that 624 00:38:56,600 --> 00:39:00,280 Speaker 1: engineers were reluctant to jump onto new things or apt 625 00:39:00,360 --> 00:39:03,600 Speaker 1: to current trends. They were more comfortable doing things the 626 00:39:03,640 --> 00:39:06,640 Speaker 1: way they had done them, whereas the marketing team knew 627 00:39:06,680 --> 00:39:09,719 Speaker 1: what customers were looking for. And I feel a little 628 00:39:09,800 --> 00:39:12,839 Speaker 1: conflicted about this because I've seen what can happen when 629 00:39:12,920 --> 00:39:16,560 Speaker 1: marketing teams have a lot of say and things that 630 00:39:16,719 --> 00:39:20,960 Speaker 1: does not always go well. But at the time, Matsushida 631 00:39:21,080 --> 00:39:24,279 Speaker 1: was really starting to lag behind other electronics companies, so 632 00:39:24,600 --> 00:39:29,000 Speaker 1: it was probably a needed change there. Under Nakamura, more 633 00:39:29,239 --> 00:39:34,439 Speaker 1: younger executives and more women executives got opportunities. Nakamura said 634 00:39:34,520 --> 00:39:37,359 Speaker 1: that he wanted to reward performance and hard work over 635 00:39:37,440 --> 00:39:40,759 Speaker 1: stuff like seniority or title. At the same time, he 636 00:39:40,920 --> 00:39:44,080 Speaker 1: made some pretty drastic cuts to the company. He oversaw 637 00:39:44,160 --> 00:39:47,399 Speaker 1: the closing of thirty factories in Japan, which was nearly 638 00:39:47,480 --> 00:39:50,680 Speaker 1: a quarter of all the company's production facilities there. He 639 00:39:50,920 --> 00:39:55,600 Speaker 1: oversaw layoffs, some thirteen thousand layoffs, and he sold off 640 00:39:55,640 --> 00:39:58,160 Speaker 1: a lot of company assets that he saw as being 641 00:39:58,520 --> 00:40:01,560 Speaker 1: kind of unnecessary and di acting and this was all 642 00:40:01,640 --> 00:40:05,560 Speaker 1: within his first year as president. The electronics market was 643 00:40:05,680 --> 00:40:08,400 Speaker 1: not doing so hot at the time, and even with 644 00:40:08,600 --> 00:40:11,640 Speaker 1: all those changes, Nakamura was kind of swimming against a 645 00:40:11,840 --> 00:40:14,719 Speaker 1: very strong current. He pushed the company to get into 646 00:40:14,800 --> 00:40:18,239 Speaker 1: more service industries kind of offset the declining demand for 647 00:40:18,440 --> 00:40:21,520 Speaker 1: physical products. But by two thousand two, the company had 648 00:40:21,520 --> 00:40:26,520 Speaker 1: posted its first actual loss, not just a fall in profits, 649 00:40:26,560 --> 00:40:30,319 Speaker 1: but I mean an actual loss, Like the company lost money, 650 00:40:30,360 --> 00:40:32,319 Speaker 1: and it was a doozy. It's not a little bit 651 00:40:32,360 --> 00:40:37,399 Speaker 1: of money. It was three point four billion dollars. Nakamura, however, 652 00:40:37,560 --> 00:40:40,520 Speaker 1: just kept making changes. He spun off five group companies 653 00:40:40,600 --> 00:40:44,800 Speaker 1: to become full subsidiaries. Panasonic would retain ownership of the companies, 654 00:40:44,880 --> 00:40:47,600 Speaker 1: but they would be able to operate much more independently. 655 00:40:48,080 --> 00:40:51,560 Speaker 1: By two thousand three, the extensive changes were starting to 656 00:40:51,640 --> 00:40:55,040 Speaker 1: show results, with Panasonic gaming the lead as the largest 657 00:40:55,160 --> 00:40:59,640 Speaker 1: consumer electronics company. Profits went from having a total loss 658 00:40:59,680 --> 00:41:04,080 Speaker 1: into thousand two to a seven hundred seventeen million dollar 659 00:41:04,200 --> 00:41:08,520 Speaker 1: profit in two thousand three. Several divisions became leaders in 660 00:41:08,640 --> 00:41:13,160 Speaker 1: the market, including Panasonic Thin Plasma Television's Boy. That was 661 00:41:14,560 --> 00:41:17,120 Speaker 1: a great victory for the time, but they would come 662 00:41:17,160 --> 00:41:19,440 Speaker 1: back to bite them. In two thousand six, we get 663 00:41:19,480 --> 00:41:22,680 Speaker 1: another change. Nakamura would become the chairman of the company, 664 00:41:23,080 --> 00:41:25,960 Speaker 1: you know, once again moving from president to chairman, and 665 00:41:26,200 --> 00:41:30,600 Speaker 1: Fumio Altsuba, former managing director, would become the new president 666 00:41:30,719 --> 00:41:34,759 Speaker 1: of the company. That same year, Matsushida planned to spin 667 00:41:34,840 --> 00:41:39,399 Speaker 1: off JVC. They sold it to Kinwood Corporation. That would 668 00:41:39,440 --> 00:41:42,279 Speaker 1: take about two years for it to complete, and the 669 00:41:42,360 --> 00:41:45,520 Speaker 1: company once again came under scrutiny along with several other 670 00:41:45,600 --> 00:41:49,520 Speaker 1: electronics companies, and not just in Japan, there were other 671 00:41:49,600 --> 00:41:51,959 Speaker 1: ones as well. But the charge was that a large 672 00:41:52,080 --> 00:41:55,080 Speaker 1: number of these companies, Panasonic included, we're part of a 673 00:41:55,200 --> 00:41:58,600 Speaker 1: cartel that was controlling the price of liquid crystal displays 674 00:41:58,680 --> 00:42:01,239 Speaker 1: or l c d s. So not that different from 675 00:42:01,520 --> 00:42:04,480 Speaker 1: previous charges that have been leveled against Panasonic back in 676 00:42:04,560 --> 00:42:09,440 Speaker 1: the nineteen sixties. The European Union would find Panasonic guilty 677 00:42:09,520 --> 00:42:13,320 Speaker 1: of this and along with five other firms, the companies 678 00:42:13,400 --> 00:42:16,240 Speaker 1: were ordered to pay a very large fine. The total 679 00:42:16,360 --> 00:42:21,120 Speaker 1: fine was around one point nine billion dollars, but Panasonics 680 00:42:21,360 --> 00:42:24,400 Speaker 1: share was a relatively small one fifty seven and a 681 00:42:24,520 --> 00:42:29,640 Speaker 1: half million euros. And in two thousand eight we finally 682 00:42:29,719 --> 00:42:32,920 Speaker 1: get to the moment where Matt Sushida officially changed its 683 00:42:33,040 --> 00:42:36,640 Speaker 1: name to Panasonic, and the company was no longer under 684 00:42:36,680 --> 00:42:39,160 Speaker 1: the direction of the Mattsshida family for the most part, 685 00:42:39,280 --> 00:42:41,800 Speaker 1: and the Panasonic brand was far better known in the 686 00:42:41,920 --> 00:42:45,360 Speaker 1: United States than Matt Sushida was, so it made sense. 687 00:42:45,719 --> 00:42:50,200 Speaker 1: In two thousand nine, Panasonic acquired Sanyo Electric Company, turning 688 00:42:50,239 --> 00:42:52,680 Speaker 1: it into a subsidiary. And if you've been listening to 689 00:42:52,800 --> 00:42:56,080 Speaker 1: this series from the beginning, you might remember that Sanio 690 00:42:56,320 --> 00:43:00,719 Speaker 1: was actually founded by Konosuke Matsushida's brother in law, uh 691 00:43:01,040 --> 00:43:04,279 Speaker 1: He had worked for the Matsushida company, but then left 692 00:43:04,360 --> 00:43:07,440 Speaker 1: the company after the US government began to get involved 693 00:43:07,560 --> 00:43:11,840 Speaker 1: after World War Two. For decades, Sano had actually competed 694 00:43:12,040 --> 00:43:15,359 Speaker 1: in some of the same markets as Panasonic, but now 695 00:43:15,520 --> 00:43:19,719 Speaker 1: the two companies were coming together. While Panasonic built upon 696 00:43:19,840 --> 00:43:23,160 Speaker 1: its name recognition, it also was making big cuts. In 697 00:43:23,200 --> 00:43:25,880 Speaker 1: two thousand eleven, the company announced it would cut around 698 00:43:26,120 --> 00:43:31,160 Speaker 1: forty thousand jobs in an effort to eliminate redundancy, improve efficiency, 699 00:43:31,760 --> 00:43:34,120 Speaker 1: and to deal with some massive losses that were once 700 00:43:34,160 --> 00:43:37,880 Speaker 1: again mounting. In two thousand twelve, Otsubo stepped up to 701 00:43:38,040 --> 00:43:42,160 Speaker 1: the position of chairman and Nakamura would become an executive advisor, 702 00:43:42,480 --> 00:43:46,320 Speaker 1: and the new president of the company was Katsuhira Suga, 703 00:43:47,280 --> 00:43:49,720 Speaker 1: and he actually remains the president of the company today, 704 00:43:50,239 --> 00:43:53,840 Speaker 1: although Otsuba would not be chairman for very long in 705 00:43:54,800 --> 00:43:59,560 Speaker 1: he was replaced by Shusaku Naga, and Shusaku is still 706 00:44:00,080 --> 00:44:03,160 Speaker 1: and to this day. Panasonic has had to deal with 707 00:44:03,360 --> 00:44:06,920 Speaker 1: more than a few instances of allegations that the company 708 00:44:07,000 --> 00:44:11,520 Speaker 1: has been engaged in price fixing, collusion, and corruption over 709 00:44:11,560 --> 00:44:15,120 Speaker 1: the last few years. The avionics division has been under 710 00:44:15,160 --> 00:44:19,080 Speaker 1: scrutiny for that, the Automotive Systems Corporation with under scrutiny 711 00:44:19,160 --> 00:44:22,640 Speaker 1: for that, and the company has had a few cases 712 00:44:22,680 --> 00:44:25,560 Speaker 1: pop up that point to it attempting to fix the 713 00:44:25,719 --> 00:44:28,520 Speaker 1: game in one way or another. Whether or not that 714 00:44:28,920 --> 00:44:32,240 Speaker 1: was the knowledge of the top levels of the company 715 00:44:32,680 --> 00:44:35,560 Speaker 1: is another matter, but certainly divisions of the company have 716 00:44:35,760 --> 00:44:38,439 Speaker 1: come under suspicion a few times in the past few years. 717 00:44:38,760 --> 00:44:41,600 Speaker 1: In addition, the story that tends to go with each 718 00:44:41,719 --> 00:44:46,160 Speaker 1: incoming president is how that president is charged with saving 719 00:44:46,320 --> 00:44:50,120 Speaker 1: Pana Sonic. It's interesting to hear how each president comes 720 00:44:50,160 --> 00:44:52,360 Speaker 1: in and they're supposed to try and save the company 721 00:44:53,080 --> 00:44:55,880 Speaker 1: that's not a great narrative. You would prefer to build 722 00:44:56,000 --> 00:44:58,520 Speaker 1: on success rather than have to be known as someone 723 00:44:58,560 --> 00:45:00,920 Speaker 1: who's correcting the course of a compan the one of 724 00:45:01,000 --> 00:45:05,400 Speaker 1: Suga's priorities was getting Panasonic out of producing plasma televisions. 725 00:45:05,920 --> 00:45:08,040 Speaker 1: That was an example of him saving the company because 726 00:45:08,560 --> 00:45:10,880 Speaker 1: consumers had already moved on they were more interested in 727 00:45:11,080 --> 00:45:13,080 Speaker 1: l C D t vs, l E ED t vs. 728 00:45:13,600 --> 00:45:18,960 Speaker 1: But Panasonic had invested billions of dollars in producing plasma sets, 729 00:45:19,280 --> 00:45:21,719 Speaker 1: so this was not an easy decision. But it was 730 00:45:21,800 --> 00:45:24,520 Speaker 1: clear that trying to sell plasma sets in the world 731 00:45:24,560 --> 00:45:28,600 Speaker 1: that just wasn't interested in them was ultimately a losing proposition, 732 00:45:29,200 --> 00:45:32,120 Speaker 1: and Suga really did have a tough job ahead of him. 733 00:45:32,200 --> 00:45:35,200 Speaker 1: The year before he became president, Panasonic had posted a 734 00:45:35,440 --> 00:45:40,200 Speaker 1: monumental loss of nine point eight billion dollars. Now, to 735 00:45:40,320 --> 00:45:44,320 Speaker 1: be fair, Panasonic wasn't the only Japanese electronics company to 736 00:45:44,480 --> 00:45:48,120 Speaker 1: post massive losses around that time. Others were doing the same, 737 00:45:48,239 --> 00:45:51,959 Speaker 1: like Sony, and that has led to a conversation about 738 00:45:52,000 --> 00:45:55,920 Speaker 1: whether or not Japanese companies in general are too reliant 739 00:45:56,040 --> 00:46:01,200 Speaker 1: upon tradition and they're not capable of responding more quickly 740 00:46:01,520 --> 00:46:04,960 Speaker 1: to a changing market. But honestly, that's a discussion that 741 00:46:05,000 --> 00:46:09,200 Speaker 1: would require more investigation in a few future episode. Maybe 742 00:46:10,280 --> 00:46:13,239 Speaker 1: the thing to remember now is that Panasonic is a 743 00:46:13,400 --> 00:46:17,600 Speaker 1: truly huge company with lots of divisions, only a few 744 00:46:17,680 --> 00:46:21,239 Speaker 1: of which are related to consumer electronics. So people like 745 00:46:21,400 --> 00:46:24,120 Speaker 1: me who associate Panasonic with that we're only seeing a 746 00:46:24,160 --> 00:46:27,040 Speaker 1: small slice of the overall company. All of this grew 747 00:46:27,080 --> 00:46:30,359 Speaker 1: out of the work of a humble electrician who made 748 00:46:30,480 --> 00:46:35,200 Speaker 1: light sockets out of a little office that was in 749 00:46:35,760 --> 00:46:40,880 Speaker 1: a dirt floor building back in That to me is 750 00:46:40,960 --> 00:46:45,319 Speaker 1: truly phenomenal, and that wraps up the Panasonic story so far. 751 00:46:46,400 --> 00:46:48,200 Speaker 1: There are a lot of elements I didn't go into 752 00:46:48,280 --> 00:46:51,480 Speaker 1: deep detail about. Obviously, if I had, we would have 753 00:46:51,640 --> 00:46:54,919 Speaker 1: been stretching onto like seven or eight episodes. But I'll 754 00:46:55,000 --> 00:46:58,880 Speaker 1: probably have future episodes that look into stuff that relate 755 00:46:59,000 --> 00:47:03,160 Speaker 1: back to these, whether they're directly about Panasonic or Panasonic 756 00:47:03,480 --> 00:47:07,000 Speaker 1: plays a part in the story that remains to be seen. 757 00:47:07,640 --> 00:47:10,320 Speaker 1: But in the meantime, if you guys have suggestions for 758 00:47:10,440 --> 00:47:13,480 Speaker 1: future topics I should cover in tech stuff, whether it's 759 00:47:13,520 --> 00:47:17,720 Speaker 1: a technology, a trend in tech company, a person, whatever 760 00:47:17,800 --> 00:47:19,719 Speaker 1: it may be, if it's related to tech let me know. 761 00:47:20,320 --> 00:47:23,720 Speaker 1: Reach out on Twitter. The handle is tech stuff hs 762 00:47:23,920 --> 00:47:32,879 Speaker 1: W and I'll talk to you again really soon. Text 763 00:47:32,880 --> 00:47:36,319 Speaker 1: Stuff is an I Heart Radio production. For more podcasts 764 00:47:36,360 --> 00:47:39,120 Speaker 1: from my Heart Radio, visit the i Heart Radio app, 765 00:47:39,280 --> 00:47:42,400 Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.