Matsushita Electric Works, Ltd. History
Telephone: (06) 908-1131
Fax: (06) 908-7053
Incorporated: 1935 as Matsushita Electric Industrial
Sales: ¥1.07 trillion (US$8.29 billion)
Stock Exchanges: Osaka
SICs: 2499 Wood Products, Nec; 3641 Electric Lamp Bulbs and Tubes; 3645 Residential Electric Lighting Fixtures; 3699 Electrical Machinery, Equipment, and Supplies, Nec
Matsushita Electric Works (MEW) is the industrial counterpart of the better-known Matsushita Electric Industrial Co., Ltd. (MEI), makers of consumer electronic products under brand names including Panasonic and National. MEW's six operating divisions manufacture a wide variety of electrical, lighting, and building products in relative anonymity, with most observers assuming incorrectly that MEW is a subsidiary of MEI. While MEI retains 28 percent of MEW's stock, the latter operates independently, and its mix of products is probably closer to the original interests of Konosuke Matsushita, the charismatic founder and builder of the Matsushita business group.
Konosuke Matsushita was born in 1894 to a farming family. When his father was ruined by commodities speculation, Matsushita, who was nine years old at the time, went to work in a bicycle shop. He became interested in the growing number of uses for electricity in Japan, and worked for several years in an Osaka light bulb factory. In 1918, at the age of 23, Matsushita founded his own company in Osaka to manufacture electric plugs.
Matsushita's company survived its difficult first years and soon was benefiting from the robust economy of the 1920s. He added bicycle lights and electric heaters to his product line and aggressively cultivated clients in Japan's complex network of retailers, usually unwilling to do business with smaller, independent suppliers. Despite the onset of the Depression in 1929, Matsushita continued to add products to his catalog--radio sets and dry batteries in 1931 and electric motors four years later. Matsushita delivered his products more cheaply than other suppliers, using volume and efficiency to keep his costs low. He also built a reputation as a generous and fair employer, able to inspire loyalty and hard work among employees. His popularity continued unabated until his death in 1989 at the age of 94.
On December 15, 1935, Matsushita incorporated his growing business as Matsushita Denki Sangyo--or Matsushita Electric Industrial--the name later applied solely to the consumer products group. The company prospered during World War II, when the Japanese economy required both innovative technology and maximum production from all manufacturers.
Matsushita and other Japanese industrialists eventually watched their factories destroyed and the Japanese economy reorganized according to the plans of General Douglas MacArthur and his occupying officials. Like many other business leaders, Konosuke Matsushita was marked for early retirement by the Allies for his support of the Japanese war effort, but a threatened strike on the part of loyal trade unions convinced the occupation authorities otherwise: Matsushita remained as chairman.
It was at this point, when many of the country's largest conglomerates were being broken into smaller pieces by the authorities, that Matsushita was forced to spin off Matsushita Electric Works, to produce industrial complements to MEI's consumer products. In 1947 Masaharu Niwa was named president of the new company, which concentrated on wiring devices for both residential and commercial structures. Given Japan's massive demand for new construction, MEW needed only to survive the first few chaotic postwar years in order to win a virtually unlimited market for its basic products. With Konosuke Matsushita backing MEW by means of his substantial equity holdings, the young company was soon prospering.
In 1951 MEW was listed on the Osaka Stock Exchange, an indication of its need for fresh capital to fund further growth. The following year the company introduced a line of fluorescent lighting fixtures, the beginning of its extensive involvement in lighting systems of all kinds. As the Japanese economy picked up steam during the mid-1950s, MEW continued to add a variety of products to its collection, most of them related to the construction industry but some aimed at the growing consumer markets usually handled by its sister company. In 1953, for example, MEW introduced electric hair dryers and shavers, creating an appliance division to which a healthy portion of the company's sales can be attributed. More typical was its 1958 offering of plastic gutters for the residential housing market, a market for which MEW would eventually develop scores of products ranging from kitchen and bath fixtures to exterior siding.
In the 1960s the Japanese economy came into its own as a global industrial leader. Both of Konosuke Matsushita's creations grew at a prodigious pace, and MEW further strengthened its position in industrial electrical components. Not as dependent on international sales as its parent, MEW waited until the 1970s before making substantial overseas investments. In 1974 it established MS-Relais GmbH in West Germany to manufacture electric relays for sale in Europe, a market that became very important for MEW. Also in 1974, MEW ventured for the first time into the U.S. market with the establishment of Aromat Corporation. Since then, MEW has increasingly emphasized local production rather than export, adding other plants in Taiwan and Thailand as well as sales corporations in seven countries. To support these growing international facilities, MEW created a Dutch finance company, Matsushita Electric Works Netherlands.
In 1977, after serving for 30 years as the company's president, Masaharu Niwa was elected chairman of MEW. Zenichi Kozaki became president, while the 82-year-old Konosuke Matsushita remained a very active director and executive advisor. Matsushita had by this time become something of a prophet of Japanese business methods, authoring nearly 50 books promoting "the peace and happiness of society through business." MEW became active in the growing high-technology electronics field when it added an electronics and plastic materials group. Along with another addition, the automation controls group, this electronics initiative gave MEW a foothold in a segment of an industry certain to benefit from Japan's always-advancing technological expertise.
The majority of the company's business, however, remained basic lighting, wiring, and building-material products, which together have accounted for approximately 75 percent of corporate revenue. With the death of Konosuke Matsushita in 1989, MEW in a sense launched into a new era, though the venerable Masaharu Niwa remained as honorary chairman until his death in January of 1992. Still 28 percent owned by its sister company, MEW remained firmly in the Matsushita group, though the company had demonstrated its ability to develop and market an increasingly wide array of high-tech and consumer goods on its own.
MEW's strides in these areas continued into the 1990s as the company set new sales records--for fiscal year 1991 the figure reached just over ¥1 trillion, up 4.5 percent over 1990. While lighting sales remained about the same, and automation controls recorded a 6.8 percent drop, substantial improvement was recorded in home appliances and building projects, which experienced increases of 12 and 8 percent, respectively. In addition, net income hit a record ¥34.8 billion.
Since fixtures and appliances account for more than three-fourths of MEW's product line, the company naturally turned to large showrooms as sales venues; in 1991 there were 47 such showrooms scattered throughout Japan. With an eye toward the company's future, MEW also invested in projects that would pave the way for good contractor relations and technological advancements. Among these was the NAiS Techno Plaza in Tokyo, which provided a place for architects, contractors, and other building professionals to highlight their services. The company also operated 21 research-and-development laboratories--to which 4.2 percent of MEW's expenditures were apportioned--and a sales and marketing computer network called SIS (Strategic Information System) that was largest in use by any Japanese manufacturer. In the construction arena, MEW joined with other companies in the development of large housing units, factory automation, and communications networks. In addition, MEW entered into a joint venture with Mitsui and Co. and the Kinden Corporation to participate in the "intelligent," or automated-service building market. MEW has also won awards for its systems and designs, including two for its fire alarm systems.
Overseas operations, at 6.2 percent of total sales, continued to grow. Matsushita Electronic Materials Inc. was established in Forest Grove City, Oregon, to manufacture multi-layer printed circuit-board materials. On the other U.S. coast, in New Jersey, Aromat Corporation made automation-control components like those manufactured for the European market by MS-Relais.
With the support of its sister company, as well as its growing presence in foreign markets--38 manufacturing and sales operations in 17 countries--Matsushita Electric Works, Ltd. should soon enjoy much greater recognition.
Principal Subsidiaries: National Wood Products Co., Ltd.; Meiji National Co., Ltd.; Matsushita Gaiso Kenzai Co., Ltd.; Kitakyushu Matsushita Electric Works, Ltd.; Tatsuno Matsushita Electric Works, Ltd.; Obihiro Matsushita Electric Works, Ltd.; Mohka Matsushita Electric Works, Ltd.; NTP Co., Ltd.; Oki Denki Bohsai Co., Ltd.; National Electric Clock Co., Ltd.; Owari Matsushita Electric Works, Ltd.; Aromat Corporation (U.S.A.); Aromat Canada Inc.; SDS-Relais AG (Germany); SDS-Relais (Schweiz) AG (Switzerland); SDS-Relais Austria Ges.mbH; SDS-Relais Limited (U.K.); SDS-Relais Italia S.R.L. (Italy); SDS-Relais France SARL; MS-Relais GmbH (Germany); Matsushita Electric Works (Thailand) Ltd.; NPL Taiwan Co., Ltd.
Source: International Directory of Company Histories, Vol. 7. St. James Press, 1993.