Work in progress / Matsushita changes gears : A pillar of Japan Inc. finally turns around
Japanese corporations are changing. They are slashing costs, reducing debt and cutting payrolls to make their organizational structures lighter, speedier and more responsive to market changes.
Matsushita Electric Industrial, one of the quintessential Japanese corporate names, arrived late to the party, having only recently completed a thorough restructuring plan under the leadership of its president, Kunio Nakamura, who took the helm at the company in 2000. But a close look at the profound changes that have taken place inside one of the stodgiest of the stodgy Japanese electronics manufacturers points to a new potential in the 86-year-old company.
It also raises hope, some analysts said, for many of its corporate peers that are struggling to come out of a decade-old funk.
In a clear sign of a turnaround, Matsushita, maker of Panasonic brand products, posted a group net profit of ¥42 billion, or $381 million, for the year that ended in March on the strength of sales of DVD players, plasma displays and digital cameras. The results were especially promising when compared with the losses it incurred in the previous two years: ¥431 billion in the 12 months through March 2002 and ¥19 billion in March 2003.
The company, founded in 1918 by the entrepreneur Konosuke Matsushita, grew to become Japan's biggest home electronics maker during the decades of rapid economic expansion that followed World War II. But like most of its competitors in electronics manufacturing, the company, with annual sales of ¥7 trillion, sank into the doldrums after toughing it out through the 1990s.
The period of stagnation persisted longer for Matsushita than for most of its manufacturing rivals, perhaps because it was the leader in the domestic market. Companies like Nissan, which was near bankruptcy, had to rebuild or die. Mounting losses forced electronics companies like NEC, Toshiba and Fujitsu...