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1 August 1984

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JPRS-JAR-84-012

1 August 1984

JAPAN REPORT

CONTENTS

POLITICAL AND SOCIOLOGICAL

Separation of Premiership From LDP Presidency Discussed

(SENTAKU, May 84) 1

Abe Says Sanctions Against North Still in Force

(YONHAP, 5 Jul 84) 7

ECONOMIC

Changes in Labor Force, Productivity Analyzed

(RODOSEISANSEI NO JITTAI, 1983) 9

Influence of Robots, Automation

Labor Productivity

Personnel, Power in Matsushita Electric Industrial Co

(Masanori Atsuda, et al.; ZAIKAI TENBO, Jan 84) 44

Briefs

Expanding Economy Reported 118

Spending Cutback Call Rejected 118

Plans for New Investments Minister 119

-a - [III - ASIA - 111]
POLITICAL AND SOCIOLOGICAL

SEPARATION OF PREMIERSHIP FROM LDP PRESIDENCY DISCUSSED

Tokyo SENTAKU in Japanese /.ay 84 pp 48-50

[Unattributed article: "Emerging New Idea on 'Separation of the Premiership

From the Presidency': Things That Will Come in the Wake of Nikaido's Vice

Presidency"]

[Text] "Unless something unusual happens, I think it is better for Mr Nakasone

to continue being Prime Minister. There is an 80 to 90 percent chance of

Nakasone's being reelected," said Masumi Ezaki, acting chairman of the Tanaka

faction group (the Thursday Club), without hesitation in his lecture to the

Domestic and Foreign Affairs Investigation Committee on 19 April.

Apparently this came as a surprise to 50 percent of the audience, but to the

other half it was what they had expected.

Prior to this, on 30 March, the former prime minister, Tanaka also made a speech

of greeting to the Thursday Club, suggesting his "support for Nakasone." He

did not clarify his position regarding Nakasone's reelection, but that was

enough to put strong restraints on the intentions of factions outside the mainstream, proving that the "Tanakasone" structure was still alive and well.

In the intervening period, Nikaido had become LDP vice president.

It is said that Ezaki's statement was tacitly approved by Tanaka. Even though

he is acting chairman, he could not have used the expression "80 to 90 percent"

without knowing that Tanaka was not against it. It is probably safe to say

that at this point there is tacit agreement between Tanaka and Ezaki about

"the basic strategy of supporting Nakasone." "There are many things that we

don't like about Nakasone. But if we keep eliminating other candidates one by

one, Nakasone is the only one left"—this is how a Tanaka aide explained it.

However, what will they do if what Ezaki calls "something unusual" actually

happens? The Komoto faction staff is still hoping for such an emergency,

saying, "It was even said that Zenko Suzuki would not fail to be reelected, but

he simply wasn't." Obviously there is a discrepancy between the hopes of

groups outside the mainstream and objective reality, but if we begin to imagine

cases of emergency, we could consider numerous possibilities.
Separation of Premiership From LDP Presidency Already in Effect

At present, a plan is being pursued by factions within and outside the mainstream. Its direct purpose is to come up with a compromise proposal in case

Nakasone should not be reelected, but in the background there is an idea of

restructuring the "conservative system, and it is deep rooted. It is also

intertwined with concern over whether the reconstruction of the political

circles should be promoted or should be stopped.

If we take some of these thought patterns and construct a hypothesis, the idea

of separating the premiership from the LDP presidency seems to come to the

fore.

The idea of separation between premiership and LDP presidency is both old and

new. Many times, whenever competing factions have had almost equal powers

and it has been difficult to select a prime minister, this method has been

reconsidered.

During the process of the unification of the conservatives in 1955, Ichiro

Hatoyama and Takatora Ogata fought against each other for the seat of LDP

president. Neither the Liberal Party nor the Democratic Party would concede,

and in the end the new party adopted the alternating presidency system. The

presidency alternated among Hatoyama, Ogata, Takeyoshi Ogata and Tomomutsu Ono.

Since Hatoyama was prime minister, there was an abnormal case of premierpresidency separation.

Later, toward the end of the Yoshida government, that same Hatoyama advocated

the complete separation of the premiership and the LDP presidency and urged

Yoshida to resign as LDP president.

A recent example occurred in the fall of 1982, when, during manipulations to

decide who should succeed Suzuki, the plan of "Nakasone for prime minister" and

"Fukuda for LDP president" was on the verge of being approved. But Nakasone

was fiercely against it, so they had to plunge into the primary election. Prior

to that stage, there was also talk of "Nakasone for prime minister" and "Komoto

for LDP president."

If the separation between premiership and LDP presidency is to be pursued in

the present situation, there are two possibilities to consider. One would be

if Nakasone is reelected, and the other if he is defeated by a new administration.

As for the first case, the Tanaka faction sees Nakasone as prime minister and

Nikaido as LDP vice president as a fait accompli and that all there is left

to do is to clarify the division of responsibilities. Regarding the issue of

Nikaido as vice president, Tanaka first proposed the idea last fall at his

meeting with Nakasone, and some say that Nakasone is merely fulfilling the

promise he made at the time. In order to recover from the damage, done him by

his trial, Tanaka tried to maintain his influence in the party by supporting

Nikaido. Although Nikaido had once emphatically refused to accept the post

of vice president, he later bitterly accused Nakasone of delaying his appointment. His attitude corresponds exactly to the words that Tanaka confided to his
aide. The separation between premiership and LDP presidency with Nikaido as

vice president, in fact, was the plan conceived by Tanaka himself. With the

reelection of Nakasone, Nikaido will remain vice president. Then, the separation between premiership and LDP presidency will actually be brought into

effect. No unreasonable attempt such as trying to make Nikaido LDP president

will be made.

However, should factions outside the mainstream not be satisfied and intraparty conflict occur, there is a chance that Komoto might become LDP president

even if the same idea of separation between premiership and LDP presidency is

to be sought. So, the question is" "Is it the Tanaka faction or the nonmainstream factions that will reign in the LDP?" But the answer is obvious, if

seen in terms of their powers.

The real problem would be in the second case; that is, should Nakasone not be

reelected.

It is believed that the Tanaka faction and the Suzuki faction, which have strong

conservative mainstream consciousness, and the Fukuda faction, which asserts

that it is "the conservative proper" (former Prime Minister Fukuda's words),

might plot large-scale negotiations. In this case, too, the idea of the premiership-LDP presidency separation is not excluded.

Should something happen,like the government being irrevocably bad or both mainstream groups, the Tanaka faction and the Suzuki faction, withdrawing their

support, or the nonmainstream groups' attempting to establish a new party,

and Nakasone's retreat becomes inevitable, the LDP will definitely move toward

building a unified posture, for a while putting aside differences between mainstream and nonmainstream groups. The factions which would serve as the core

of such a move would be those of Tanaka, Suzuki and Fukuda. Thus, a cooperative

movement, like the concerted efforts that were made to "depose Miki" would

be born within the party.

However, there is no right candidate for both for the premiership and the

LDP presidency.

The Proposal, "Miyazawa for Prime Minsiter, Nikaido for President"

The Suzuki faction will of course support Kiichi Miyazawa, but with Miyazawa,

who lacks experience in party operations, it will probably be difficult to get

support from the entire party. The Fukuda faction will support Shintaro Abe,

but it is still uncertain whether the Tanaka faction leans toward an Abe administration, and Fukuda is probably not too keen on that idea because he fears

losing his position as faction leader. As for the Tanaka faction, it is impossible to support Takeshita, and, in view of unfavorable public opinion,

Nikaido administration also seems impossible unless "something unusual" actually

happens. The only other possibility is Toshio Komoto who is regarded as a

tributary of the Takeo Miki group.

"If one thinks of the administration having the same person for both posts of

prime minister and LDP president, one cannot think of a proper candidate. If
we think of the possibility of separating the premiership from the LDP presidency then there could be more variety of possibilities." A hypothesis to be

drawn from such thinking is Miyazawa for prime minister, Nikaido for LDP

president, and Abe for secretary general. This is a plan to construct the

administration with each of the three mainstream factions of Tanaka, Suzuki and

Fukuda giving a little, and to try to reconsolidate the conservative base.

The Suzuki faction wishes, if possible to gain real administrative power, using

their traditional power of the Kochi-kai. But they would have to make one concession by letting go of the prime minister's seat. The Tanaka faction could

get to be in charge of the party operation, but would have to make a concession

by approving Miyazawa as LDP leader, a plan which Tanaka himself would not like

to support. As for the Fukuda faction, even though they could materialize an

Abe administration, they would have to be satisfied with being in the third

position among the three factions. Furthermore, having an LDP president from

the Tanaka faction would be the same as tacitly approving "Tanaka's rule,"

which is a concession to them, too.

It is said that there was a meeting between Tanaka and Suzuki in Tokyo recently.

The content of their secret consultation was not disclosed, but it is not hard

to imagine that the possibility of Nakasone's reelection, the possible future

of the Miyazawa administration" and the treatment of Nikaido must have been

discussed. If Suzuki agrees upon the idea of Nikaido as LDP leader in order to

have a Miyazawa administration, the idea of the new separation between premiership and LDP presidency can be supported by Tanaka and Suzuki, too.

Behind this plot, there are also other factors such as the evaluation of the

coalition government with the New Liberal Club which is a factor for political

reorganization, or the LDP's attitude toward the Democratic Socialist Party's

attempt to be included in the coalition.

The political operation by LDP's coalition with the New Liberal Club produced

some merits such as the passage of the budget draft without amendments, but the

anti-Tanaka" attitude of Togawa, minister of home affairs and Yohei Kono is

still unchanged and the Tanaka faction still regards them with bitterness.

Shin Kanemaru, the chairman of the Executive Council, and some others have expressed their displeasure explicitly. Since one cabinet member's post is given

to the New Liberal Club, there is dissatisfaction among the Suzuki and Fukuda

factions. Frankly speaking, the LDP must feel strongly about that it does not

want outsiders peeking behind the scenes of its power.

They, especially the Tanaka faction, wish to recover from this state in the

next general election and to regain the conservative one-party system. The

senior staff of the Fukuda faction does not hesitate to say in public, "In order

to do that, it is no good to let Nakasone try for another general election.

So, the three-faction system is the only way..."

Regarding the move by the Democratic Socialist Party, there is a big difference

between the conservative mainstream groups and Nakasone who says, "It would be

possible to form a coalition between the LDP, the Clean Government Party, and
the Democratic Socialist Party," and favors cooperation between the conservative

and the center parties. The reason that several times in the past Fukuda showed

some interest in the idea of reorganizing the political circles was that he

always wanted to oppose Tanaka, his old enemy, and originally he supported the

idea of a unified party.

The intention of Tanaka's speech to the party at the end of March, "Not to

Criticize Party Policies—The Hallmark of the True Conservative" is not only to

restrain the Fukuda faction, but also to warn the party not to be easily taken

in by invitations from the center groups, including the coalition with the New

Liberal Club. Tanaka has, in his own way, absolute confidence in the orthodox

conservative and in that sense he is not against the formation of the mainstream

group.

Among the staff of medium standing in the Tanaka, Suzuki and Fukuda factions,

too, the consciousness that "we must reconstruct the conservative mainstream

by ourselves" is beginning to rise. There is no doubt that its fucus is on

the post-Nakasone situation. It means that there is a big chance that they will

go along with separation of the premiership from the LDP presidency with one

concession from each of the three factions.

However, there is a large obstacle in the way of this idea of separation. That

is, if he approves it, it means it will be a part of Tanaka's strategy to regain power for himself.

According to his aide, Tanaka still believes in his innocence and has not given

up hopes of returning to power after he is released from the Lockheed conviction.

In short, he never withers.

If Tanaka does not wither, Fukuda also will keep the fire of revenge alive.

It is said when Fukuda's resistance was at its peak over the issue of Nikaido's

presidency, he made the following comment:

"The Suzuki faction made Miyazawa acting chairman, and our faction also opened

the way for Abe as a successor. But look at what Tanaka is doing. He would

not recognize Takeshita, and still tries to have a direct control over the

faction. This is the bad thing about Tanaka's reign."

That means that if Tanaka does not step down, he will not, either. On Fukuda's

part, even with separation of the premiership from the LDP presidency, he

cannot approve of Nikaido as president. He is not entirely against supporting

the Miyazawa administration, but if the reward for helping Tanaka get back on

the road again is Abe as secretary general, his position as "pope" will be in

danger.

The idea of Miyazawa, Nikaido and Abe as the trio made by concessions is redolent of a new era with old figures or power receding, but in fact the result

might be that only Tanaka will survive. If this idea is being talked about in

the meeting between Tanaka and Suzuki, here is what Tanaka must be thinking:

"It is all right for Nakasone to be reelected this fall. This combination can

be still be useful after Nakasone has been allowed to be prime minister for
another year or two." On the other hand, the three-faction system is too big

a risk for Fukuda. ö

For Kakuei Tanaka's Amusement?

The new_cooperation among the three conservative mainstream groups has a purpose

of eliminating the opposition parties' manipulation for the reconstruction of

political circles, but at the same time it can also stop the emergence of

Komoto who is in the nonleading group. There is a possibility that Komoto may

beable to enter the cabinet as deputy prime minister if Miyazawa becomes

prime minister. But Komoto's falling behind Miyazawa, has, in effect, destroyed his chance of becoming prime minister or LDP president.

H

°TT!r\

1S n

°! that Komot°

,s chance of being entrusted with the premiership

and the LDP presidency has been wiped out completely. He has a chance if

Nakasone loses party support and retreats, and, in addition, the three factions'

plan for the new administration is judged to be still premature. Should that

happen, reverse strategy, such as soliciting cooperation from the opposition

parties will probably be adopted.

When the appointment of Nikaido as vice president was carried out forcibly

Komoto waited for the scene in which Fukuda would resign from the post of '

supreme adviser. According to the staff of the Komoto group after Fukuda's

resignation, Komoto was ready to resign immediately from the post of director

general of the Economic Planning Agency. Masayuki Fukio, an aide to Fukuda

was to step down from the chairmanship of the Policy Affairs Research Council.

If that had happened,,Abe, who used to say that "it is not possible for one

who is responsible for diplomacy to do such an absurd thing" would have been in

a tricky position. However, Fukuda did not move. This was because he did not

have enough confidence to overthrow Nakasone, and there was a great advantage

in remaining in the minority even if the party was to be split.

Yet, Komoto might think about working out a drastic measure this fall. If the

new cooperation among the mainstream groups is established, Komoto will lose his

party base and be left out of the premiership-presidency separation framework.

The plan for the separation of the premiership from the LDP presidency may be

after all, nothing more than an "amusement" for Tanaka who aims to regain power.

(No honorifics used.)

12545

CSO: 4105/219
POLITICAL AND SOCIOLOGICAL

ABE SAYS SANCTIONS AGAINST NORTH STILL IN FORCE

SK050212 Seoul YONHAP in English 0206 GMT 5 Jul 84

[Text] Tokyo, 5 Jul (YONHAP)--Japanese Foreign Minister Shintaro Abe said

Wednesday that the series of sanctions his government took against North Korea

after its terrorist bomb attack in Rangoon, Burma, last October are still in

force.

In a press conference with South Korean correspondents two days before he

leaves for Seoul for a four-day visit, Abe said the Japanese Government has

maintained consistency in its policy toward North Korea.

Abe said the resumption of talks on fishery agreements between Japan and North

Korea is now at stake, but the talks are being held on a private level in which

his government cannot meddle.

In regard to the improvement of the legal status of Korean residents in Japan,

he said it is natural to treat them just as Japanese nationals are treated.

He said he will direct experts to improve the fingerprinting system for alien

registration cares. However, it is "difficult at the present moment" to

abolish the fingerprinting system, he said.

In addition, Abe disclosed that his ministry has decided to write names of

Koreans appearing in official documents in Chinese characters in parallel

with descriptions of the names' Korean phonetics in the Japanese language.

Touching on the trade imbalance between Japan and South Korea, Abe said there

are many areas in which Japan can work to correct the imbalance but Korea must

make further efforts to find larger markets in Japan.

The transfer of Japan's advanced technology to South Korea should be carried

out through the expansion of exchanges of technology between the two countries

in the private sector, he said.

Abe added he would like to try to improve the technology transfer through the

conclusion of a science and technology cooperation agreement.

Emphasizing that the 1988 Seoul Olympic Games are a matter of concern not only

to South Korea but also to all of Asia and the world, Abe said the Japanese
Government will exert its utmost efforts to help make the event a

success.

The Japanese Government will talk to the South Korean Government about providing cooperation, Abe said.

Noting that Japan and South Korea will celebrate the 20th anniversary of

normalization of diplomatic relations next year, Abe said he hoped the two

countries would maintain a mature partnership not only through political

and economic exchanges but also through cultural, sports, and youth exchanges.

CSO: 4100/155
ECONOMIC

CHANGES IN LABOR FORCE, PRODUCTIVITY ANALYZED

Influence of Robots, Automation

Tokyo RODOSEISANSEI NO JITTAI in Japanese 1983 pp 18-30

[Text] Recently, the rapid spread of microelectronics

applied industry—industrial robots, numerical control

(NC) machine tools, machining centers, and NC presses

—has attracted attention. In the 1981 survey, the

manner of introduction, and the influence exerted on

the labor force, of these devices was surveyed for

eight industries: steel refining, steel rolling,

steel and pig iron casting, electric wire/cable,

lathes, bearings, electric motors and automobiles.

The definition of industrial robot, NC machine tool,

machining center, and NC press are as follows:

Industrial robot*

i. Manual manipulators: Manipulators operated by

humans.**

ii. Fixed- and variable-sequence robots: Manipulators

which advance each stage of an operation, one after

another, following sequences, conditions and positions

programmed in advance; programmed information either

cannot be easily changed (fixed) or can easily be

changed (variable).

iii. Playback robots: Sequence, position and other

information concerning an operation is memorized in

advance by the manipulator through human manipulation;

operations are then carried out by recalling the

instructions from memory when needed.

* Classification and definitions by the Japan Industrial Robot Association.

** A manipulator has functions similar to those of a human arm, and moves

objects through space.
iv. Numerical Control Robots: Manipulators which carry

out required operations from information on sequence,

position, etc., conveyed numerically (examples:

punched tape, cards, digital switches, etc.).

v. Intelligent Robots: Robots which can determine their

activity through sensing and recognition functions.

NC Machine Tools

i. NC Machine Tools: Machines for which commands for each

manufacturing step are electronically sent by a very small

computer. On the basis of these commands, processing is

automatically carried out. The form and measurements for

cutting, the speed of rotation of the tool or article,

position when cutting and other necessary information is

programmed in advance into an electronic control device.

The machine can receive commands to move an article into

position for processing, vary the position or speed of

revolution of the tool, etc.

ii. Machining Center: A type of NC machine tool. A large

amount of processing can be carried out in one mounting of

an article, and there is a device for automatically changing

tools. Mountings and dismountings involving 10 times or

more work than with previous systems are possible, and the

number of mountings, dismountings, and applications of

tools can be economized tens of times more. Also, the

advantages of numerical control can be fully applied

(no matter how great the number of determinations of

position and steps involved, they are easily possible, etc.).

iii. NC Press: A secondary metal-processing machine which

carries out molding treatments of forming, bending, pressing

and shearing, and in which control of operations is carried

out by a numerical control device. There are NC machine

presses and NC hydraulic presses.

I. Circumstances Surrounding Introduction of Industrial Robots

Among the establishments having industrial robots as of the end of December

1981, the automobile and electric motor industries had conspicuously high

percentages, with the automobile industry at 75 percent and the electric motor

industry at 63 percent (data for the automobile industry are from a survey

of enterprises and represent percentage per enterprise; this also applies

to data for the automobile industry which follow). Next were the lathe

industry at 24 percent, steel rolling at 15 percent, and the bearing industry

at 14 percent. The percentage of establishments having NC machine tools

(including machining centers and NC presses) was 89 percent for the electric

motor industry, followed by the automobile industry at 80 percent and the

lathe industry at 72 percent, all particularly high. Next was the bearing

industry, 40 percent, the steel rolling industry, 31 percent, and the steel

10
and pig iron casting industry, 11 percent. Since the use and functions

of both industrial robots and NC machine tools were largely developed as

a major object of the automobile, electric motor, and lathe industries,

machine-related industries involving a large variety of operations, their

spread has been concentrated in these industries, but despite the fact that

their percentage is low in the materials-related industries of steel rolling,

steel and pig iron casting, etc., introduction is being carried out

(Tables 7, 8).

The total number of industrial robots in use for the 8 industries covered

in the survey was 6,123. Most of these (78 percent) were in the automobile

industry. Next was the electric motor industry (14 percent), followed by

steel and pig iron casting (5 percent). Classification by type showed

fixed- and variable-sequence robots accounting for a majority (57 percent);

so-called top-class robots—playback and numerical control robots—were about

4/10 of the total (39 percent, of which 0.2 percent were intelligent robots).

However, for the automobile industry, which maintains large numbers of robots,

the percentage of playback and numerical control robots was relatively high

(48 percent) (Table 7).

Elsewhere, the total number of NC machine tools in use was 2,966 (NC machine

tools, 2,415; machining centers, 514; NC presses, 37). Of these, the

automobile industry accounted for about half (53 percent); next was the

steel and pig iron casting industry (17 percent), and the lathe industry

(11 percent) (Table 8).

Further, concerning the average number of industrial robots and NC machine

tools per establishment surveyed, for industrial robots the figures were

240 for the automobile industry and 92 for the electric motor industry,

both particularly high. For the bearing industry, there were 1.3 units

per establishment, and the steel rolling, steel and pig iron casting,

and lathe industries each averaged 0.5 units per establishment. For NC

machine tools, the automobile industry averaged 28 units per enterprise,

the electric motor industry averaged 21 units per establishment, the lathe

industry, 13 units and the bearing industry, 4.6 units.

[Tables 7 and 8, next pages]

11
Table 7. Numbers and Types of Industrial Robots in Use

It *

(1)

« £ ffl

a ,tr .y f.

AUS (9^

(3) <* W £ » (£)

l#«BfrSfcO

S % ffi

o ,±;' .y h

#t(4)

-7— 3. 7 )\>

8 i S Jt

(9)

9

6, 123

(100)

249

( 4)

3,510

( 57)

2, 364

(39) 6.2

Ro)M M 13 41

(100)

21

(51)

15

( 37)

5

(12) 0.4

$ a; if.

(in 15 46

(100)

9

(20)

24

( 52)

13

(28) 0.5

m-ftai'fe 4

320

(100)

6 286

( 2) j ( 89)

28

( 9) 0.5

(13) 8

23

(100)

0 | 23

(0) (100)

0

( 0) 0.3

Si! «t

(14)

24 13

(100)

2

(15)

5

( 38)

6

(46)

_l

0.5 j

?15) *

14 53 ! 0

(100) j ( 0)

51

( 96)

2

( 4)

1

i

1.3

mam

(16)

67 829

(100)

144

(17)

665

( 80)

20

( 2) 92

fl7)» *

75 4,798

(100)

' 67

( 1)

2,441

( 51)

2,290

(48) 240

Key:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

Industry

Percentage of establishments having industrial robots

Number of units

Total number of industrial robots

Manual manipulators

Fixed- and variable-sequence robots

Playback and numerical control

Average number of industrial robots per establishment

Total of eight industries

Steel forging

Steel rolling

Steel and pig iron casting

Electric wire/cable

Lathe

Bearing

Electric motor

Automobile

[see Notes, next page]

.12
Note: 1. Number in parentheses are percent; total number of industrial

robots = 100 percent.

2. Fourteen intelligent robots are included in the figures for

playback and numerical control robots.

3. Data on the automobile industry is from a survey of enterprises;

data in column 2 is percentage of enterprises; data in column 7

is average number of industrial robots per enterprise.

Table 8. Number and Types of NC Machine Tools in Use

(1)

NCIfPtt

<soc2>

(3) ® m & » (£)

(8)

NCIff

m m m

ft(4)

N C

(5)

M C

xhmu

N

7° U*

C

8(9p * ft 17 2,966 2,415 514 37 3.0

^10^ m 9 75 68 5 2 0.7

«uiF & 31 106 104 2 0 1.2

ttiftlfik ^ 11 499 393 87 19 0.8

m%i$)- 7> 7 8 8 0 0 0.1

m (i4) '& 72 335 178 157 0 13

tt(15)

s 40 195 189 6 0 46

m

(l#5 m 89 189 147 37 5 21

&(1^ * 80 1,559 1,328 220 11 78

Key:

1. Industry

2. Percentage of establishments having NC machine tools

3. Number of Units

4. Total number of NC machine tools

5. NC Machine tools

6. Machining centers

7. NC Presses

8. Average number of NC machine tools per establishment

9. Total of eight industries

10. Steel refining

11. Steel rolling

12. Steel and pig iron casting

13. Electric wire/cable

14. Lathe

15. Bearing

16. Electric motor

17. Automobile

13
II. Achievements in Introduction and Enlargement of Facilities for 1981

and Plans for Introduction and Enlargement of Facilities During 1982

Achievements in introduction and enlargement of facilities for industrial

robots and NC machine tools for 1981, and plans for same in 1982 were

compared. The percentage of establishments introducing or increasing the

number of industrial robots was high for the automobile industry (50 percent)

and for the electric motor industry (33 percent). The percentage of

establishments planning to introduce industrial robots in the coming year

was also conspicuously high for the automobile industry (80 percent) and

for the electric motor industry (78 percent). It can be seen that the spread

of industrial robots will be increasing further from now on (Chart 7).

The percentage of establishments introducing or increasing the number of NC

machine tools during 1981 was high in the electric motor (67 percent), lathe

(60 percent) and automobile (55 percent) industries. The percentage of

establishments planning introduction of, or increase in the number of,

industrial robots during 1982 was also about the same, respectively, and a

continuing high desire for introduction can be seen in these industries.

For the materials-related industries, the percentage of establishments

introducing or planning to introduce industrial robots was low, but the

number of establishments in the steel rolling industry having plans to

introduce them was slightly higher than the number introducing them in

1981 (Chart 8).

III. Original Goals of Introduction, Effects of Introduction and Goals of

Introduction From Now On

The original goals of introduction, effects of introduction, and goals of

introduction for the future (about 3 years), for establishments having

industrial robots and NC machine tools as of the end of December 1981, are

as follows:

1. With regard to the original goals of introducing industrial robots,

the percentage of establishments mentioning "Reduction of Work Force" was

highest (78 percent). Next were "Reduction of Product Cost" (56 percent),

"Unmanned Operation Is Possible" (48 percent), and "Production Level

Increase" (46 percent). In general, response to items dealing with energy

or cost efficiency was high. However, response to the following items was

in the 20-30 percent range: "Increase in Quality and Precision" (32 percent),

"Solving the Lack of Skilled Workers" (26 percent), "Avoidance of WorkRelated Illnesses" (30 percent), and "Accident Prevention" (23 percent).

The variety of desired goals was quite large.

Elsewhere, with regard to effects of introduction, response was somewhat

lower than for original introduction goals, but for the most part, the

expected results from introduction were obtained. Among these, the effect

after introduction was slightly higher than the original goal for the items

"Reduction of Product Cost," "Increase in Quality and Precision,"

"Avoidance of Work-Related Illnesses," and "Prevention of Accidents."

14
Chart 7. Percentage of Establishments Introducing Industrial Robots During

1981, and Percentage Planning Introduction During 1982

m

100

90

70h

60

50

40

30

20

10

0 •-m _n rrrM

m

I

II. III. IV. V. VI. VII. VIII. IX.

lUi Introduced during 1981

1 i Planning introduction in 1982

Key:

I. Total of eight industries

II. Steel forging

III. Steel rolling

IV. Steel and pig iron casting

V. Electric wire/cable

VI. Lathe

VII. Bearing

VIII. Electric motor

IX. Automobile

15
Chart 8. Percentage of Establishments Introducing NC Machine Tools During

1981, and Percentage Planning Introduction During 1982

100

90

80

70

60

50

40

30

20

10

0 r~w I by»

W®

II. III. IV. V. VI. VII. VIII. IX.

H^ Introduced during 1981

I—I Planning introduction in 1982

Key:

I. Total of eight industries

II. Steel forging

III. Steel rolling

IV. Steel and pig iron casting

V. Electric wire/cable

VI. Lathe

VII. Bearing

VIII. Electric motor

IX. Automobile

16
Looking at the results by industry, the percentage of responses was highest

for all industries for "Reduction of Work Force." For the automobile

industry, which maintains a large number of industrial robots, response

was high to the items "Increase in Quality and Precision," "Solving the Lack

of Skilled Workers," "Avoidance of Work-Related Illnesses," and "Accident

Prevention," as goals of introduction of industrial robots. On the other

side of the coin, response to the item "Production Level Increase" was low;

compared to other industries, the automobile industry maintains a higher

percentage of playback and other top-class robots, and compared to other

industries, the functions expected of industrial robots are more advanced.

For the steel and pig iron casting industry, the relatively high percentage

was distinctive for the items "Avoidance of Work-Related Illnesses" and,

for the electric wire/cable industry, the items "Unmanned Operation is

Possible" and "Operation for Long Hours is Possible." Both industries

had a high percentage response to these items.

Concerning future introduction goals, the number of items receiving

responses was fewer than for those concerning the original introduction

goals, and the goals are more limited, but, response relating to such

energy- and cost-efficient items as "Reduction of Work Force" was high.

Even so, the needs of industries have somewhat increased concerning the

items "Solving the Lack of Skilled Workers" and "Possibility of Varied

Products and Complicated Processes" (Chart 9).

2. Concerning original goals of introduction of NC machine tools, the highest

percentage response was for "Increase in Quality and Precision (79 percent).

Next was "Possibility of Varied Products and Processes" (63 percent),

"Reduction of Product Cost" (56 percent), "Production Level Increase

(50 percent), "Reduction of Work Force (46 percent), and "Unmanned

Operations Are Possible" (39 percent).

Compared to responses concerning industrial robots, percentage of response

to items relating to energy and cost efficiency was low. However, response

was high to the items "Increase in Quality and Precision" (79 percent) and

"Possibility of Varied Products and Processes" (63 percent). Also, response

was low to "Avoidance of Work-Related Illnesses (5 percent) and "Accident

Prevention (5 percent), but response was fairly high to "Solving the Lack

of Skilled Workers" (30 percent). This indicates the difference in need

for functions of NC machine tools as compared with industrial robots.

Concerning the effects of introduction, percentages were somewhat lower

than for the original goals of introduction, just as in the case of

industrial robots. However, the expected goals were, for the most part,

fulfilled, and for the items "Solving the Lack of Skilled Workers" and

"Operation for Long Hours is Possible," responses indicate an effect

greater than the original goal.

Looking at the results by industry, for the most part for all industries,

response was high to the items "Increase in Quality and Precision" and

"Possibility of Varied Products and Processes." However, particularly in

the automobile industry, "Solving the Lack of Skilled Workers," and in the

-17
electric wire/cable and lathe industries, "Unmanned Operation is Possible"

and "Operation for Long Hours is Possible," response was relatively high

(Chart 10).

IV. Change in the Size of the Work Force in Response to the Process of

Introduction

1. Increase or decrease in the size of the work force at establishments

introducing industrial robots or NC machine tools was investigated.

For industrial robots, the percentage of establishments responding that

their work force "Decreased" reached about 70 percent, while "No Increase

or Decrease" accounted for about 30 percent of the responses. The percentage

for "Increased" was zero. For NC machine tools, establishments responding

"Decreased" with respect to the size of their work force were about

30 percent, "No Increase or Decrease" accounted for a majority of about

60 percent, and "Increased" accounted for about 10 percent. Further,

for both industrial robots and NC machine tools, the personnel who were

eliminated were largely absorbed by other fields or manufacturing processes

(Chart 11, Table 11, Table 12).

2. With regard to posting of new personnel along with the introduction

of industrial robots or NC machine tools, the percentage of establishments

responding to "Posted New Personnel" was just under about 30 percent for

those establishments introducing industrial robots, and just over 30 percent

for those introducing NC machine tools. At the majority of establishments,

personnel already posted are engaged in the operation of industrial robots

and NC machine tools.

Further, looking at the classification of newly posted personnel,

for industrial robots, about 40 percent of new personnel were newly

graduated from high school, while about 60 percent were transferred from

other manufacturing processes or fields. For NC machine tools, the

percentage of new graduates was low at about 20 percent, while workers

transferred from other fields or manufacturing processes were about

60 percent (Chart 12).

V. Incidence of Problems Accompanying Introduction

The incidence of problems at establishments having industrial robots and

NC machine tools was divided into the categories "Problems accompanying

introduction with workers transferred to other fields or manufacturing

processes" and "Problems with workers newly transferred in along with

introduced manufacturing processes." Establishments having problems in

one or another of these categories were at about 80 percent for industrial

robots and at about 90 percent for NC machine tools.

Establishments responding to the item "Problems With Workers Transferred

to Other Fields or Manufacturing Processes" were at about 70 percent for

both those having industrial robots and for those with NC machine tools.

In contrast, response to the item "Problems With Workers Newly Transferred

In," compared to about 60 percent for industrial robots, was about 80 percent

for NC machine tools (Figure 13).

18
Chart 9. Original Goals of Introduction of Industrial Robots, Effects of

Introduction and Future Goals of Introduction, By Percentage of

Establishments (Total = 100)

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.

Original Goals of Introduction

Effects of Introduction

Future Goals of Introduction

Key:

I. Production Level Increase

II. Increase in Quality and Precision

III. Possibility of Varied Products and Complicated Processes

IV. Reduction of Work Force

V. Solving the Lack of Skilled Workers

VI. Reduction of Overtime

VII. Unmanned Operations Are Possible

VIII. Operation for Long Hours is Possible

IX. Avoidance of Work-Related Illnesses

X. Accident Prevention

XI. Reduction of Product Cost

XII. Other

19
Chart 10. Original Goals of Introduction of NC Machine Tools, Effects of

Introduction and Future Goals of Introduction, By Percentage of

Establishments (Total = 100)

mm556 5 ° 5

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.

Original Goals of Introduction

Effects of Introduction

Future Goals of Introduction

Key:

I.

II.

III.

IV.

V.

VI.

VII.

VIII.

IX.

X.

XI.

XII.

Production Level Increase

Increase in Quality and Precision

Possibility of Varied Products and Complicated Processes

Reduction of Work Force

Solving the Lack of Skilled Workers

Reduction of Overtime

Unmanned Operations Are Possible

Operation for Long Hours is Possible

Avoidance of Work-Related Illnesses

Accident Prevention

Reduction of Product Cost

Other

20.
Table 9. Original Goals of Introduction of Industrial Robots, Effects of

1 Introduction and Future Goals of Introduction, By Percentage of

Establishments in Each of Eight Industries (Total Establishments

= 100)

Category

I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.

Industry aD cab cabcabcabcabcab cabcabcabcab cab c

D

H

46 46 23 32 36

-1

29 13 13 17 78 74 52 26 18 22 16 9 14 48 44 40 29 26 22 30 31 24 23 26 18 56 60 48 8 9 7

54 53 8 23 31 0 0 0 0 62 62 15 0 0 0 23 8 8 31 23 0 23 23 8 8 8 8 23 23 8 23 38 23 8 8 0

64 64 23 36 36 8 7 7 0 79 57 31 21 29 0 7 0 15 43 29 8 29 29 8 21 29 8 21 29 8 43 50 23 7 7 0

33 33 4 29 25 21 8 4 8 88 88 58 33 8 17 4 4 4 42 38 38 17 13 13 50 42 29 21 21 13 67 67 46 4 4 4

17 17 33 0 0 17 0 0 0 67 67 50 0 0 0 0 0 0 50 50 50 17 17 17 0 0 0 0 0 0 50 50 33 0 17 17

67 67 33 17 33 33 17 17 17 67 50 67 17 17 33 50 33 50 50 50 50 50 33 50

-•*

17 33 33 17 33 33 50 50 50 17 17 17

50 50 67 0 17 0 0 0 17 83 100 50 17 17 33 33 17 17 50 67 67 33 17 33 0 0 0 17 17 17 50 50 83 0 0 0

50 33 33 17 17 50 33 33 33 67 67 67 17 17 33 33 17 17 83 83 83 67 67 50 33 33 33 0 0 0 100 DO BO 0 0 0

33 40 33 73 80 87 33 40 60 73 67 73 60 47 60 13 13 20 53 47 67 27 33 33 47 53 53 47 53 53 60 60 60 20 20 20

[Key on following page]

21
Key for Tables 9 and 10:

Category

I. Production Level Increase

II. Increase in Quality and Precision

III. Possibility of Varied Products and Complicated Processes

IV. Reduction of Work Force

V. Solving the Lack of Skilled Workers

VI. Reduction of Overtime

VII. Unmanned Operations Are Possible

VIII. Operation for Long Hours is Possible

IX. Avoidance of Work-Related Illnesses

X. Accident Prevention

XI. Reduction of Product Cost

XII. Other

a. Original Goals of Introduction

b. Effects of Introduction

c. Future Goals of Introduction

Industry

A. Total of Eight Industries

B. Steel Refining

C. Steel Rolling

D. Steel and Pig Iron Casting

E. Electric Wire/Cable

F. Lathe

G. Bearing

H. Electric Motor

I. Automobile

22
Table 10. Original Goals of Introduction of NC Machine Tools, Effects of

Introduction and Future Goals of Introduction (Total

Establishments = 100)

Category

Industry ab cabcabcab cabcabcabcab cabcabcabcab c

H

50

89

50 29

89

44 48

45

79

22

11

89

78

46 37

20 20

53

76 51

89

70

63

22

63 43

44

26 41

85

40

67 28

47

25 25

50 50

67

79 63

44

46

22

44 19

69 66 51

60 80

72 50

12 65

25

44

63

59

63

24

43

56

38

44

56 56

30

11

30

43

80

61 61

59

63 88

94

60

44

59 24

39

40

50

40

35

11

22

29

22

26 11

40 25

60 20

44 44

63

69

29

63

38

50

50

28

40

44

29

50

56

38

13 12 13 39

30 18

60

44 39

29

50

56 69

32 35

22 22

4 1 33

16

0 0

28

12

63

56

12

28

15 31

26

33

26

29

22

29

22

15

27 27

40

28 56

13 13

35

13

13

40

24 25

60

56

75

44

24 24

75

44 44

75

20

11

15

25

40 20

67 61

38

56 31

10

56

10

0 0

15

10

56

24

38

24

50

8 50

33

41 37 37

0 0

51 48

33

60

33

15

51 58

0 0 0

060

13

13

13

40 60

56

13

13

88

50

53

75

44

29

75

63 75 75

0 0

13 13 13

[Key on preceding page]

23
Chart 11. Changes in the Number of Workers Due to Introduction of New

Manufacturing Processes

Key:

Industrial Robots NC Machine Tools

1. No increase or decrease (30 percent)

2. Decrease (70 percent)

3. Business establishments introducing industrial robots during

1981 - 100

4. No increase or decrease (58 percent)

5. Decrease (30 percent)

6. Increase (12 percent)

7. Business establishments introducing NC machine tools during

1981 = 100

24
Table 11. Changes in Labor Force Due to New Manufacturing Processes

Accompanying the Introduction of Industrial Robots

(10)

(ID

(12)

(13)

(14)

(15)

(16)

(17)

(18)

(1)

ft

Si M

E MB

^2) A

43(100)

mm • Scüci/^

UIUS • •r - 7 ^

«

2(100)

5(100)

12(100)

(3)

3 (100)

4 (100)

4 (100)

3(100)

10 (100)

0 CO)

0 (0)

0 (0)

0 (0)

U (0)

(4)

30 ( 70)

2 (100)

3 ( 60)

11 ( 92)

( 33)

0 (0)

0 (0)

0 (0)

0 (0)

1 ( 25)

(if<pmmvtt%iwmjm

fi£(6)fe

29 ( 97)

2 (100)

3 (100)

11 (100)

(100)

3 ( 75)

1 ( 33)

8 ( 80)

1 (100)

3 (100)

-v ttj [ÖJ

4 ( 13)

0 ( 0)

»D ( 0)

0 ( 0)

0 ( 0)

0 ( 0)

0 ( 0)

mmmm

_X8J

(100)

7 ( 88)

1 (100)

3 ( 38)

0 (0)

0 (0)

0 (0)

0 (0)

0 (0)

0 (0)

0 (0)

0 (0)

0 (0)

JLSO

13 (30)

0 ( 0)

2 (40)

C 8)

2 (67)

3 (75)

(25)

(67)

(20)

Table 12. Changes in Labor Force Due to New Manufacturing Processes

Accompanying Introduction of NC Machine Tools

ill.

%

565^0 m tin

(3)

mm®.

(4)

5p'j?&&m<o*mmmmm»

fltxs,

£(6)£

^ tb isi

47 d> ft (8)

«I

(9)

(10)

(ID

(12)

(13)

(14)

(15)

(16)

(17)

(18)

£ ft 113 (100) 14 (12) 34 (30) 33 ( 97) 4 (12) 0 (0) 65 ( 58)

5 (100) 0 ( 0) 0 ( 0) 0 ( 0) 0 ( 0) 0 (0) 5 (100)

flE & (100) 1 (13) 3 (38) 2 ( 67) 1 (33) 0 (0) 4 ( 50)

53 (100) 3 ( 6) 15 (28) 15 (100) 0 ( 0) 0 (0) 35 ( 66)

Eg.* *r - 7'^ 3 (100) 1 (33) 1 (33) 1 (100) 0 ( 0) 0 (0) 1 ( 33)

15 (100) 3 (20) 1 ( 7) 1 (100) 0 ( 0) 0 (0) 11 (73)

3 (25) 3 (25) 3 (100) 0 ( 0) 0 (0) 6 ( 50)

6 (100) 0 ( 0) 5 (83) 5 (100) 1 (20) 0 (0) 1 ( 17)

Q §ii M- i 11 (100) 3 (27) 6 (55) 6 (100) 2 (33) 0 (0) 2 ( 18)

[Key to both Tables on following page]

25
Key for Tables 11 and 12:

1. Industry

2. Number of business establishments introducing industrial robots/

NC machine tools

3. Number of business establishments increasing their workforce

4. Number of business establishments reducing their workforce

5. Number of business establishments reducing their workforce,

by measure employed

6. Transfers to other manufacturing processes/fields

7. Transfers to related companies, others

8. Hiring adjustments

9. Number of business establishments with no increase or reduction

in workforce

10. Total of 8 industries

11. Steel refining

12. Steel rolling

13. Cast steel/pig iron

14. Electric wire/cable

15. Lathes

16. Bearings

17. Electric appliances

18. Automobiles

Note: Numbers in ( ) are percent (number of business establishments

introducing industrial robots/NC machine tools during 1981 = 100).

Under "Number of business establishments reducing their workforce,

by measure employed," numbers in parentheses are percentage of

business establishments reducing their workforce.

26
Chart 12. Newly Posted Workers Accompanying the Introduction of Industrial

Robots and NC Machine Tools

Industrial Robots

Key:

1. Operations carried out by previously posted personnel (72 percent)

2. Operations carried out by newly posted personnel (26 percent)

3. Business establishments introducing industrial robots during

1981 = 100

4. Other (1 percent)

5. Workers posted from other manufacturing processes or fields

(58 percent)

6. Workers newly graduated from school (41 percent)

7. Type of worker posted

8. Operations carried out by previously posted personnel (68 percent)

9. Operations carried out by newly posted personnel (32 percent)

10. Business establishments introducing NC machine tools during

1981 = 100

11. Other (26 percent)

12. Workers newly graduated from school (19 percent)

13. Workers posted from other manufacturing processes or fields (55 percent)

14. Type of worker posted

Note: Other includes workers transferred from other establishments,

workers hired after the normal hiring season, etc.

27
Table 13. Incidence of Problems Accompanying Introduction of New Industries

as well as Industrial Robots, and Breakdown by Content (Total = 100)

(1)

P4 Si « W;

L2X-

(3? (4)

III * w m (8)

1101

(9) V L

«H3H

12 13) (14)

(15)

(16)

(17)

(18)

(19)

(20)

(21)

(22)

(23)

£ 82 18 55 18 30 59 38

85 15 62 15 15 38 38

E fi 92 85 15 15 15 63 31

mm '«feftt,^ 88 13 33 21 58 38

>T - 7'^ 83 33 17 17 33 33 17 50

m 33 67 17 83 17 83

67 33 50 17 33 33 67

m Ä 83 17 83 17 83 17

ill * 87 13 53 13 47 87 13

Table 14. Incidence of Problems Accompanying Introduction of New Industries

as well as NC Machine Tools, and Breakdown by Content (Total = 100)

(1)

*

M SI cj -6 fti

(2) (!(^SfffcKSK Lfcfi*£«

(3)

pi

(4)' f^6P (8)

PPI H

(9)

ti L

(11)

p=l Sä

(12)

maust (13)

ßa si

(15) 8 .£ an ft 91 9 61 8 4 33 13 80 10 17

(16) Ä Si m 89 11 44 11 0 44 11 89 0 11

(17) #c !¥_ m 89 11 67 11 0 30 4 63 0 33

(18) mm • mk << ,!f^ 99 1 ; 61 10 5 31 25 96 22 2

(19) msi • *T - -/ >^ 100 0 40 0 0 60 0 100 0 0

(20) St: SlO- as 83 17 67 6 0 33 11 61 0 39

(21) till 5 71 29 47 0 18 35 0 47 6 41

(22) '4' ©i & 100 0 88 13 0 13 0 88 0 13

(23) Ö ®) *. 87 : 13 56 6 0 44 6 88 6 13

[Key to both Tables on following page]

28
Key for

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

Tables 13 and 14:

Industry

Incidence of problems

Present

Absent

Problems related to transfer of workers in former manufacturing

processes to other fields or processes

Retraining problems

Treatment problems

Other

No problems

Problems relating to new workers posted to manufacturing processes

accompanying introduction of industrial robots/NC machine tools

Hiring problems

Training problems

Other

No problems

Total of 8 industries

Steel refining

Steel rolling

Cast steel/pig iron

Electric wire/cable

Lathes

Bearings

Electric appliances

Automobiles

Figure 13. Percentage of Establishments With Problems Stemming from

Introduction of Industrial Robots and NC Machine Tools,

By Circumstances of Occurrence (Total Establishments = 100)

(3) \

Industrial Robots

m it u s. m % m #

(4) NC Machine Tools

Key:

1. Problems Present

2. No Problems

3. Workers Transferred to Other Fields and Manufacturing Processes

4. Workers Newly Transferred In

29
Figure 14. Types of Problems (Total Establishments = 100)

Industrial Robots NC Machine Tools

.o. JZL

Key:

G H I J K L

Workers Transferred to Other Fields and Manufacturing Processes

A. Reeducation/Training Problems

B. Treatment Problems

C. Other

Workers Newly Transferred In

D. Education/Training Problems

E. Hiring Problems

F. Other

Workers Transferred to Other Fields and Manufacturing Processes

G. Reeducation/Training Problems

H. Treatment Problems

I. Other

Workers Newly Transferred In

J. Education/Training Problems

K. Hiring Problems

L. Other

30
Looking at the types of problems encountered, responses for both industrial

robots and NC machine tools reached 50 percent for reeducation and training,

both with regard to "Problems With Workers Transferred to Other Fields or

Manufacturing Processes" and "Problems With Workers Newly Transferred In."

In particular, establishments having NC machine tools gave a high response

of about 80 percent to the item "Problems With Workers Newly Transferred In."

It can be seen that the establishments consider education and training to

be of concern. Further, concerning problems of worker treatment, there was

a higher response to the item "Problems With Workers Transferred to Other

Fields/Manufacturing Processes" for industrial robots, about 20 percent,

than for NC machine tools, about 10 percent. With regard to hiring problems,

the percentage response for NC machine tools was slightly higher at 10

percent for the items "Problems With Workers Newly Transferred In" than

that for industrial robots (Tables 13 and 14, Figures 13 and 14).

Labor Productivity

Tokyo RODOSEISANSEI NO JITTAI in Japanese 1983 pp 41-49

[Text] I. Steel (steel refining, steel rolling, steel and pig-iron casting)

In the steel industry, steel refining, steel rolling, and steel and pig iron

casting saw a general decline in production due to the continuing decline

in plant and construction investment, and the decline in personal consumption

and domestic demand resulting from the long-drawn-out economic stagnation.

In the meantime, labor commitment increased slightly in steel refining,

decreased slightly in steel rolling, and in steel and pig iron casting,

saw a decline exceeding that in production levels. Because of this,

labor productivity showed a continuing drop from 1980 in steel refining

and steel rolling, while a slight increase was maintained in steel and

pig iron casting.

1. In steel refining, pig iron production (blast furnace steel) dropped below

a 70 percent operation level, in addition to a drop in production capacity

(overall nominal capacity), and because of this deepening slump, production

dropped 5.7 percent. Meanwhile, since labor moved slightly downward,

labor productivity fell 3.6 percent. In steel production (coarse ore into

converter and electric furnaces), production capacity (overall nominal

capacity) dropped for both converter and electric furnaces. However,

electric furnaces recovered somewhat at the end of the year, and the

increased operation level resulted in a gain in production level for

electric furnaces, and a drop for converters. At the same time, labor

commitment showed movement in the opposite direction, increasing slightly

for converters and decreasing somewhat for electric furnaces. Because of

this, labor productivity dropped for converters, and increased for electric

furnaces. For steel refining as a whole, labor productivity dropped

3.3 percent, mainly from the drop in production levels. Examining change

in labor productivity by process, for blast furnace steel, prefurnace

processes required 0.081 hours, a 9.5 percent drop. This led to an 8.2

percent decline in labor productivity for direct processes. For coke and

sintered ore, the source of pig iron, labor productivity for coke rose

31
2.9 percent, at 0.536 hours, while sintered ore moved in the opposite

direction with a drop of 5.7 percent, at 0.185 hours (Table 27).

Table 27. Required Labor Time and Percentage Rise in Labor Productivity

for 1 Ton Pig Iron, By Product and Process

Product/Process

Blast Furnace Steel

Direct Processes, Total

Pre-Furnace

Other

Indirect Processes, Total

Coke

Direct Processes, Total

Indirect Processes, Total

Sintered Ore

Direct Processes, Total

Indirect Processes, Total

Required Labor Rise in Labor

Time (Hours) Productivity (Percent)

1980 1981 1980 1981

0.365 0.378 2.7 A 3.6

0.110 0.119 A 1.9 A 8.2

0.074 0.081 A 1.4 A 9. 5

0.036 0.038 A 2.9 A 5. 6

0.255 0.259 4. 1 A 1.6

0.552 0.536 5. 3 2.9

! 0.242 0.226 A 0. 4 6. 6

0.310 0.310 9.4 0.0

...0.1-75 0.185 2.8 A 5. 7

0.026 0.028 A 8.3 A 7. 7

0.149 0.157 4.5 A 5. 4

In steel manufacture, the ingot process (0.095 hours) continued its rise

from the previous year. The continuous casting process dropped 2.9 percent

(0.097 hours), the melting process dropped 9.7 percent (0.068 hours).

Due to a drop in most of the key processes, the total for direct processes

dropped 2.9 percent, and indirect processes also dropped 3.2 percent.

Electric furnaces moved in the opposite direction from that for converters,

with the melting process rising 3.1 percent (0.251 hours), and continuous

casting up 7.8 percent (0.200 hours). All other processes were up as well,

resulting in a rise for direct processes of 4.7 percent, and of 5 percent

for indirect processes (Table 28).

The number of personnel in the steel refining process as a whole dropped

7.7 percent, in contrast with a slight increase in labor commitment.

In pig iron production, the percentage of establishments implementing

the measure for increasing labor productivity, decided upon last year,

of "Introduction and Addition of New and Advanced Machines and Facilities,"

has dropped by half. However, in steel manufacturing, the percentage is

rising (e.g., enlargement of facilities for continuous casting). Also,

in pig iron and steel manufacturing, the percentage of establishments

adopting the measure "Concentration of Production in High-Efficiency

32
Facilities" (e.g., discontinuance of medium- and smaller-size furnaces,

and priority production in large furnaces) is rising, as well as the

percentage for "Improvement of Product Quality and Control."

Table 28. Required Labor Time

for 1 Ton Converter

and Percentage Rise in Labor Productivity

Steel, By Process

Product/Process

Converter Steel

Direct Processes, Total

Melting

Ingot Forming

Continuous Casting

Crane

Accumulating Mixer

Other

Indirect Processes, Total

Electric Furnace Steel

Direct Processes, Total

Melting

Ingot Forming

Continuous Casting

Crane

Other

Indirect Processes, Total

Required Labor Rise in Labor

Time (Hours) Productivity (Percent)

1980 1981 1980 1981

0. 755 0.778 A a9 A 3.0

0.344 0.354 A 7.5 A 2. 9

0.062 0.068 A 12.7 A 9.7

0.103 0.095 7.8 7.8

0.089 0.097 A 1.3 A 9.0

0.061 0.063 A 7.0 A 3. 3

0.008 0.010 20.0 A 25. 0

0.021 0.021 A 5.0 0.0

0.411 0.424 A 10. 2 A 3. 2

1.407 1.340 A 7. 2 4.8

0.923 0.880 A 5. 1 4.7

0.259 0.251 A 6. 1 3.1

0. 159 0.152 A 6.7 4.4

0.217 0.200 0. 9

! 7. 8

0.202 0.191 i~A

'4- 7 5.4

0.086 0.086 A 19.4 0.0

0.484 v 0.460 A 11.5 5.0

2. In steel rolling, production dropped for 7 of 13 hot rolled products,

particularly heavy rail, small shaped steel, and regular wire. This was

the result of a 2-year slump in the construction field and a drop in demand

for industrial and electric machines and automobiles. Production of cold

finished steel materials also dropped due to reduced demand. In steel

rolling as a whole, production dropped 6 percent. A drop in labor commitment

was concentrated in the articles whose production dropped, but commitment

increased greatly for articles whose production rose. As a whole, labor

commitment was limited to a small decline, and because of this, labor

productivity in steel rolling was down 5.7 percent, a continued drop from

1980.

33
Examining changes in labor productivity by process for hot and cold rolled

steel materials, direct processes for hot rolled steel products dropped

9.2 percent (0.676 hours), a much greater drop than that for 1980 (3.7

percent). Indirect processes dropped 6.2 percent (0.447 hours); all

processes dropped just as in 1980.

For cold rolled steel materials, stability processes rose 8.2 percent

(0.067 hours), and refining processes rose 5.3 percent (0.302 hours).

Many processes turned to a rise from a drop in 1980. However, a 0.5 percent

drop in crane processes (0.183 hours) and a 58.2 percent drop in other

processes (0.155 hours) caused the total for direct processes to drop

2.6 percent. Indirect processes, at 0.512 hours, rose 11.1 percent (Table 29)

Table 29. Required Labor Time and Percentage Rise in Labor Productivity

for 1 Ton Rolled Steel, By Product and Process

Hot Rolled Steel Materials

Process

Total

Direct Processes, Total

Hot Air Furnace

Rolling

Refining

Crane

Other

Indirect Processes, Total

Required Labor

Time (Hours)

1980 1981

Rise in Labor

Productivity (Percent)

1980 1981

1.040 1.123 A 9.6 A 8.0

0.619 0.676 A 3.7 A 9. 2

0.061 0.064 A 3. 4 A 4.9

0.152 0.165 A 7.0 A 8.6

0.263 0.291 A 1.2 A10. 6

0.086 0.091 A 7.5 A 5. 8

0.057 0.066 A 1.8 A15. 8

0.4 21 0.447 A19. 6 A 6.2

Cold Rolled Steel Materials

Process

Total

Direct Processes, Total

Pickling

Rolling

Annealing

Stabilizing

Refining

Crane

Other

Indirect Processes, Total

Required Labor

Time (Hours)

Rise in Labor

Productivity (Percent)

1980 1981 1980 1981

1.687 1.652 A 17.9 2. 1

1.111 1.140 A 7. 1 A 2.6

0.143 0.140 A 13.5 2. 1

0.147 0.146 A 4. 3 0.7

0.148 0.147 A 5.0 0.7

0.073 0.067 A 10. 6 8.2

0.319 0.302 A 5.6 5.3

0.182 0.183 A 7.7 A 0.5

0.098 0.155 A 5.4 A 58.2

! 0.576 0.512 46.2 11.1

34
The number of personnel assigned to steel rolling as a whole has dropped

10.3 percent, against a small drop in labor commitment. However, the

percentage of establishments which mention "Reconsideration of Personnel

Assignments," as a measure taken in the last year for increasing labor

productivity, is rising, and the percentage mentioning "Improvement of

Product Quality and Control" is rising, as it is in steel refining.

3. In steel and pig iron casting, aside from a small production increase

in steel casting, there was a considerable production increase in pig iron

casting as well as malleable cast steel. For this reason, these products

declined 4.8 percent overall. Even though steel casting production capacity

(overall nominal capacity) increased, operation levels decreased, and while

production capacity dropped slightly for pig iron casting and malleable

cast steel, operation levels dropped considerably. Meanwhile, labor

commitment in cast steel increased slightly, and dropped greatly in steel

and pig iron casting and malleable cast steel. Thus, labor productivity

maintained its increase for all these products.

Examining changes in labor productivity by process, molding processes at

6.23 hours rose 5.7 percent, extracting processes at 2.47 hours rose

4.9 percent, and melting processes at 2.00 hours rose 2.4 percent.

As a result of a rise in labor productivity in main processes, direct

processes at 13.87 hours showed a labor productivity increase of 2.2 percent.

Also, indirect processes at 3.53 hours showed an increase in labor

productivity of 3.5 percent (Table 30).

Table 30. Required Labor Time and Percentage Rise in Labor Productivity

for 1 Ton Pig Iron Casting, By Process

Required Labor Rise in Labor

Time (Hours) Productivity (Percent)

Process 1980 1981 1980 1981

Pig Iron Casting 19.64 19.40 5.0 1.2

Direct Processes, Total 16.23 15.87 5.2 2.2

Research 0.76 0.92 A 1.3 A 21.1

Molding 6.61 6.23 4.8 5.7

Melting 2.05 2.00 5. 1 2.4

Extracting 2.47 2.35 5.7 4.9

Heat Treatment 0.23 0.28 23.3 A21.7

Cast Finishing 4.11 4.09 5.7 0.5

Indirect Processes, Total 3.41 3.53 4.2 A 3. 5

35
Personnel assigned to all these products as a whole declined 1.5 percent,

less than the 5.3 percent decline in labor commitment. As measures taken

for increasing labor productivity in the past year, the percentage of

establishments reporting "Small Group Activity (QC, ZD, etc.)" has risen.

In steel casting, measures for machine facilities (e.g., "V-process"

molding devices, etc.) are increasing, and the percentage for "Reconsideration

of Personnel Assignments" is rising in steel and pig iron casting.

II. Machine-Related Industries Other Than Automotive (Lathe, Bearing and

Electric Motors)

For the lathe, bearing and electric motor industries, production was held

in check by sluggish domestic demand caused by stagnation in related

industries. However, due to a drop in labor commitment, labor productivity

rose for bearings and electric motors. In the lathe industry, there was

a large drop, despite its being mitigated. Also, all three industries

showed changes in personnel assignments ranging from increases to small

declines, as opposed to a drop in labor commitment. This came with the

introduction of NC machine tools, machining centers and industrial robots,

and it can be thought that plans to shift to internal production of products

is exerting an influence.

1. Due to sluggishness in related machine industries, regular lathes saw

a large drop in production, continuing from 1980. Also, automatic lathes,

which did well in 1980, leveled off in 1981. Because of this, total

production for lathes showed a deep slump of 17.1 percent. Meanwhile,

labor commitment declined for regular lathes and increased for automatic

lathes. Labor productivity mirrored the change in labor commitment,

rising for regular lathes and falling for automatic lathes. As a whole,

the heavily weighted influence of the automatic lathes caused a 15.4 percent

drop in labor productivity. It was the first drop in 6 years, since 1975.

Looking at changes in labor productivity by process, there was a large drop

for both machine processing (146.7 hours, down 7.8 percent), and for assembly

finishing processes (135.2 hours, down 15.0 percent). The total for direct

processes, at 327.5 hours, represented a 13.0 percent drop in labor

productivity. Indirect processes (40.2 hours, down 39.6 percent) also

dropped greatly (Table 31).

Overall, personnel were up slightly, 0.9 percent, in contrast to a drop

in labor commitment of about 4.4 percent. There has been a conspicuous

drop in the percentage of establishments reporting "Subcontracting and

Outside Order of Merchandise" and "Use of Temporary and Part-Time Workers"

as measures for increasing labor productivity during the past year.

Though the percentage is low, establishments reporting "Introduction and

Improvement of the Shift System" are becoming more numerous. Also, although

the percentage has dropped since 1980 for establishments reporting "Addition

of New and Advanced Machines and Facilities" and "Automation and Changeover

to Unmanned Operation of Existing Machinery," it is relatively high compared

with other industries. An example of this is the fact that the number of

establishments introducing and enlarging facilities for NC machine tools

and machining centers, industrial robots, and FMS (Flexible Manufacturing

Systems), is increasing.

36
Table 31. Required Labor Time and Percentage Rise in Labor Productivity

for One Lathe, By Process

Process

Total

Direct Processes, Total

Scribing

Machine Manufacturing

Heat Treatment

Assembly Finishing

Parts and Product Inspection

Painting

Indirect Processes, Total

Required Labor

Time (Hours)

1980 1981

Rise in Labor

Productivity (Percent)

1980 1981

318.7 367.7

. , 1

7.0 A 15.4

289.8 327.5 6.7 A 13.0

4.2 5.4 12.5 A 25.6

136.1 146.7 4.0 A 7.8

3.7 4.1 A 15.6 A 10.8

117.6 135.2 8.7 ,A 15.0

l 18.8 24.0 10.5 A 27.7

9.4 12.1 15.3 A 2a 7

2a8

i

40.2 10.6 A 39.6

2. Healthy domestic and foreign demand in 1980 for machines using bearings

caused a marked production increase in the bearing industry, but production

of ball and roller bearings leveled off in 1981 due to a peaking of domestic

demand and a retreat in exports. Meanwhile, labor commitment dropped

4.4 percent for ball bearings and rose 2.2 percent for roller bearings.

Because of this, changes in labor productivity reflected those in labor

commitment, rising for ball bearings and dropping, although slightly,

for roller bearings. Overall, a 2.2 percent gain was recorded.

Examining changes in labor productivity by process, labor productivity

in lace rose 4.1 percent due to a 4.6 percent increase for machine processing

(15.67 hours). Assembly processes (3.69 hours, up 7.3 percent) continued

their increase of 1980. Due to the increase in labor productivity for

both processes, the total for direct processes, at 25.14 hours meant a

3.2 percent overall increase in labor productivity, despite a drop in

ball rollers (down 8.5 percent) and maintenance machines (down 1.3 percent).

A drop in nearly all the indirect processes resulted in a total of 4.44 hours,

a 4.4 percent drop in labor productivity (Table 32).

Personnel assigned to bearings as a whole dropped a slight 0.6 percent,

compared with a 3.6 percent drop in labor commitment. As in the lathe

industry, the large drop in the percentage of establishments reporting

"Subcontracting and Outside Order of Merchandise" and "Use of Temporary

and Part-Time Workers" was distinctive. The percentage for "Automation

and Changeover to Unmanned Operation of Existing Machinery" was relatively

high.

37
Table 32. Required Labor Time and Percentage Rise in Labor Productivity

for 1,000 Bearings, By Process

Required Labor

Time (Hours)

1980 1981

Rise in Labor

Productivity (Percent)

Process 1980 1981

Total

Direct Processes, Total

Lace

Machine Processing

Heat Treatment

Ball Rollers

Maintenance Machines

Assembly

Indirect Processes, Total

Inspection, Packing

Metallurgical Tools*

Electricity

Transport, Storage

* Repairs and maintenance

3. Production of electric motors (standard, three-phase squirrel-cage

induction motors of 11 kilowatts or less) dropped greatly in 1980 due to

a retreat in plant investment by related industries, particularly medium

and small enterprises. However, an increase in exports for the latter half

of 1981 brought a change to a 7.0 percent increase in production. Meanwhile,

a 2.6 percent drop in labor commitment caused a 9.0 percent increase in labor

productivity, a continuing rise from 1980.

Looking at changes in labor productivity by process, assembly processes

at 0.183 hours rose 10.7 percent. Machine processing at 0.302 hours rose

9.0 percent, and winding and roughing processes, which carry medium to

great weight, rose 8.7 percent, at 0.528 hours. All processes showed rates

of increase exceeding those made in 1980 (Table 33).

[Table 33, next page]

30.23 29.58 1&8 2.2

25.96 25.14 17.8 3.2

17.60 16.87 19.3 4.1

16.42 15.67 18.8 4.6

1.18 1.20 25.8 A 1.7

1.99 2.16 21.0 A 8.5

2.39 2.42 2.0 A 1.3

3.98 3.69 17.8 7.3

4.27 4.44 24.0 A 4.0

2.2 8 2.38 24.5 A 4.4

1.28 1.34 21.0 A 4. 7

0.25 0.25 26.5 0.0

0.46 0.47 28.1 A 2.2

38
Table 33. Required Labor Time and Percentage Rise in Labor Productivity

for One Electric Motor (11 Kilowatts or Less) , By Process

Process

Direct Processes, Total

Machine Processing

Steel Plate Operations

Winding, Roughing

Assembly

Required Labor

Time (Hours)

1980 1981

Rise in Labor

Productivity (Percent)

1980 1981

1.217 1.107 5.6 9.0

0.332 0.302 5.7 9.0

0.102 0.094 7.3 7.8

0.578 0.528 6.5 &7

0.205 0.183 2.4 10. 7

Personnel assignments increased 3.3 percent, in contrast with a drop in

labor commitment. As measures taken in the last year to increase labor

productivity, measures for equipment and facilities, such as "Introduction

and Addition of New and Advanced Machines and Facilities' and "Automation

and Changeover to Unmanned Operation of Existing Machinery,

increased conspicuously.

etc., has

Also, a large number of measures are showing higher percentages than those

for 1980, such as "Reconsideration of Personnel Assignments," "Increasing

Technical Skill Through Job Training," and implementation of "Small Group

Activity (QC, ZD, etc.)." Further, as a concrete example of measures for

equipment and facilities, a large number of establishments are reporting

introduction and enlargement of facilities for NC machine tools and

machining centers, automation of winding and conveyance processes,

and changeover to numerical control. It can be seen that an overall

switch to microelectronics is progressing.

III. Manufacturing Business for Automobiles and Accessory Products

1. Despite a stagnation in domestic demand, production of automobiles has

continued to increase, due to healthy exports since spring 1980. However,

because of a darkening export picture during the latter half of 1981,

on top of continuing sluggish domestic demand, the large production increases

up to 1980 changed to a drop in production in 1981.

Examining this by vehicle type, production levels for passenger cars went

from a large increase in 1980 to a small increase; small and regular trucks

went from increases in 1980 to a large decrease in 1981, and diesel trucks

of over 7,000cc rallied from a large decline in 1980 to a small increase.

Changes in labor commitment levels also followed the drop in production,

dropping for small and regular trucks. However, the extent of the drop was

less than that of the drop in production, and for small passenger cars,

the increase in labor commitment exceeded the increase in production.

Because of this, in contrast to a 5.9 percent drop in production levels

39
for automobiles as a whole, labor commitment increased 2.4 percent,

and labor productivity fell 6.7 percent.

By vehicle type, regular gasoline trucks rose 9.3 percent, and regular

diesel trucks (7,000cc and less) rose 0.5 percent, but small trucks suffered

a large 12.3 percent drop, small passenger cars, a 4.7 percent drop,

and regular diesel trucks (over 7,000cc) fell 3.8 percent.

Further, the drop in labor productivity for automobiles was the first since

the early seventies.

Also, for small passenger cars, it was distinctive that the drop in labor

productivity was mainly due to the increase in labor commitment to chassis

unit processes and engine processes (Table 34).

Table 34. Required Direct Labor Time and Percentage Rise in Labor

Productivity for One Automobile, By Type and Field

Required Labor Rise in Labor

Time (Hours) Productivity (Percent)

1980 1981 1980 1981

18. 82 19.71 1.7 A 4.7

3.18 3.49 A 0.6 A 9.7

3.20 3.64 2. 1 A 13.8

3.75 3.90 1.8 A 4.0

8.69 8.68 2.2 0.1

17.65 19.82 9. 1 A 12.3

24 02 •21.79 2.8 9.3

24.02 23.89 15.5 0.5

90.31 93.73 1.0 A 3.8 •

Type/Field

Small Passenger Cars

Engine

Chassis Unit

Body Cabin

Overall Assembly

Small Trucks

Regular Gasoline Trucks

Regular Diesel Trucks*

Regular Diesel Trucks**

* 7,000cc or less

** Over 7,000cc

Personnel assigned to automobile production as a whole increased 1.3 percent,

slightly less than the increase in labor commitment. However, looking at

recent changes in personnel assigned to automobiles, since 1976, there has

been a tendency for personnel to increase, even in years when labor commitment

declined (in 1975, personnel declined 6.2 percent; in 1976, it rose 3.4

percent; in 1977, 1.9 percent; in 1978, 1.3 percent; in 1979, 3.5 percent;

and in 1980, 1.8 percent). Personnel continued to increase in 1981.

40
As measures taken in the last year to raise labor productivity, the percentage

of establishments reporting implementation of "Small Group Activity (QC, ZD,

etc.)" rose further, and that for "Reconsideration of Personnel Assignment"

and "Automation and Changeover to Unmanned Operation of Existing Machinery"

also increased. Percentages for "Subcontracting and Outside Order of

Merchandise," "Use of Temporary and Part-Time Workers" and "Use of Outside

Technicians" dropped conspicuously. The trends for these various measures

can be thought to be influencing changes in labor commitment and personnel

assignment. As a concrete example of measures for equipment and facilities,

percentages are increasing for establishments reporting introduction and

enlargement of facilities for robots for welding and painting, automation

due to installation of numerical control devices, changeover to flexible

systems allowing parallel assembly of many different types of automobiles,

etc.

2. In this year's survey, circumstances of introduction of industrial robots

were investigated for 8 of 19 industries. Introduction of industrial robots

among the 8 industries was most advanced for the automobile industry;

75 percent of establishments in this industry were using industrial robots;

4,798 robots in all. This amounts to 78 percent of the total of 6,123 units

for all 8 industries.

Examining the numbers and distribution by process of the automotive industry's

industrial robots in order to determine the processes in which their

introduction has progressed, rough materials processes (casting, forging,

and heat treatment as well as press and sheet metal processes) accounted

for the majority. Next was machine processing (cutting and polishing of

rough materials), while assembly processes (painting, assembly and

inspection processes) accounted for relatively few robots. Dividing

industrial robots into "manual manipulators and fixed- and variable-sequence

robots" (hereafter termed sequence robots) and "playback and numerical control

robots" (hereafter termed playback robots), each type accounts for about

half of all industrial robots. However, in contrast to sequence robots,

the majority of which are in machine processing, playback robots are mostly

used in welding processes for rough materials. This reveals the differences

in function and use between sequence and playback robots (Table 35).

[Table 35, next page]

41
Table 35. Numbers and Distribution of Industrial Robots for Automobiles,

By Process and Type

(6)

(1)

X

ft (5)

(7)

tu &

ÖD X

m±m\

(12)

ammo

St ig ffi Bi SE P?

(8)

(9)

(10)

(13)

(14)

mi

(2) (3) (4)

In*., Hf

100 (4,798)

.7li" -7---/]/-$

' öJS!-> --fr*';

56 ( 2, 668)

5

2

48

( 258 )'•

( 85)

(2,325)

(11) 28 (1,351)

16 ( 774)

13

99)

53)

622)

(•16) 0 ( 5)

52 (2,508)

24 (1, 129)

5

2

17

236)

81)

812)

1 (

1 (

47)

44)

0)

0)

7 u-4 '<-v9 D.+;.y K

W. fl £ij ftl a .-f? .y h ^

27 (1,288) j

2 ( äl) !

48 (2,290)

32 (1,539 )

0 ( 22 )

0 ( 4 )

32 (1, 513)

1 ( 63 )

14 ( 683 )

1 (

0

13

0 ( 5 )

52 )

9 )

622 )

Key:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

Note: 1.

2.

3.

Process

Total Industrial Robots

Manual Manipulators, Fixed- and Variable-Sequence Robots

Playback and Numerical Control Robots, etc.

Total

Manufacturing Field

Rough Materials

Casting, Forging, Heat Treatment

Press, Sheet Metal (Except Welding)

Welding

Machine Processing

Assembly

Painting

Assembly Adjustment (Except Welding)

Welding

Manufacturing Assistance Field

Rough materials processes consist of casting, forging, heat

treatment, press and sheet metal processes. Machine processing

is cutting and polishing of rough materials. Assembly processes

consist of painting, assembly and adjustment processes.

Intelligent Robots are included with playback and numerical

control robots.

In columns two through four, numbers given are percent of total

and (in parentheses) total number of units.

42
Here is an example of the extent to which the introduction of industrial

robots has contributed to raising labor productivity. Examining the changes

in the number of labor hours necessary for one small passenger car, the drop

in hours of machine processing has been largest (50.5, with 1971 = 100).

Next are rough materials processing (53.9, same index), and assembly

processes (66.0). These figures reflect the labor-saving effects brought

about by industrial robots (Table 36).

Table 36. Changes in Required Number of Labor Hours (Direct Processes Only)

for One Small Passenger Car

Rough Machine

Year Total Materials Processing Assembly

mm' mm mm mi

1971

3"3. 2 2

(100.0)

10. 6 7

' (100.0)

6.0 2

(10 0. 0 )

16.53

(10 0.0 )

1973

2 8. 12

(846)

8/61

( 80.7)

433

( 71.9)

15. 18

( 91.8)

1975

25^8

( 7 7.9)

a 17

( 7 6. 6)

3.86

( 64 1)

13.85

( 83.8)

1977

23. 25

( 70.0)

7.04

( 66.0)

3.2 6

( 54 2)

12.95

( 78.3)

1979

19. 14

( 57.6)

5.55

( 52.0)

2. 7 7

( 4 6.0)

10.82

( 5 5.5)

1981

19. 70

( 59.3)

5. 75

j ( 53.9)

3.0 4

( 50.5)

10.91

( 66.0)

Note: Figures given are hours; numbers in parentheses are percent

(1971 = 100).

12622

CSO: 4105/184

43
ECONOMIC

PERSONNEL, POWER IN MATSUSHITA ELECTRIC INDUSTRIAL CO

Tokyo ZAIKAI TENBO in Japanese Jan 84 pp 47-88

[Article by business critic Masanori Atsuda and journalists Katsuo Yamamoto

and Ikutoshi Takano on the Matsushita Electric Co: its founder, his

philosophy, profiles of its top executives and subsidiaries.]

[Text] Attainment of a Business System That Will Perpetuate an Excellent

Company

I have worked as a researcher and critic of business now for about 30

years. During that time I have also been a manager, although it was only

for 6 years.

I may be simply piling up insignificant years, but I have had some

experience. In looking over several thousand companies, I have come to

know over 10,000 managers. When asked to give the best company and

manager, I point to the Matsushita Electric Industrial Co and Mr Konosuke

Matsushita.

In July 1917 Konosuke Matsushita left the Osaka Electric Light Co. With

total assets of 33 yen 20 sen in retirement allowance, 42 yen in company

savings, and 20 yen in personal savings, he established a business. In

65 years, that very small enterprise has become a huge business with 2.65

trillion yen in sales and working profits of 175 billion yen for the

fiscal year 1983. But that is not why I cite Matsushita as being the

best. Nor is my opinion based upon the static financial tables and analyses

which report that it had a favorable balance of 47 billion yen in receipts

for the same period.

I base my judgement on the fact that the life of this business is forever.

A thriving system has been attained whereby the company will continue to

be the best today, tomorrow, and the day after, in perpetuity.

People call Konosuke Matsushita the Taiko [Hideyoshi Toyotomi] of today.

But I do not agree. Why?

44
Hideyoshi Toyotomi did unify the whole country in one generation. But

it is also true, however, that the Toyotomi Administration lasted only

one generation.

As Hideyoshi foresaw in his death poem, "Life is and disappears like the

dew; the Capital is no more than a dream," the Toyotomi line completely

disappeared within just 17 years of his death. There is absolutely no

chance of this happening to Matsushita Electric, however. I believe that

it will continue to grow as it does now, even in the 21st century, and

the pace of its splendid development will not slacken.

The principal reason for this is that Matsushita possesses a worthy business

philosophy.

Kotaro Takahashi, who can be said to be the personofication of

"Matsushitaism," entered the company in 1936, retired as chairman in

1977, and is now an advisor. He says:

"The reason why (Matsushita Electric) is such a tight-knit group is because

a basic operating policy is in force throughout the organization."

He goes on to say:

"After I retired, I personally traveled to many areas of the world and

did not see any examples of a business policy that is based upon a business

theory as noble as Matsushita's. Without a doubt different enterprises

are conducting business in various different ways, but as far as I know,

there is not one which has come forth with a business theory as profound

as the one that Konosuke Matsushita announced on 5 May 1932."

What kind of business theory is it?

It is embodied in both the "president's proclamation" and "Matsushita

Electric's principles." The former I shall omit here because it is

too long. The latter reads:

"We aim to improve and enrich the substance of social existence and make

those items which are essential to everyday life plentiful. ...Without

also neglecting our duty as industrialists."

The question is why was this business theory issued ont in 1918 at the

time of the company's inception, but some 14 years later?

The Spirit of "People Are Assets" Constitutes the Basis of Personnel

Policy

Konosuke Matsushita was born in an isolated village on the outskirts of

Wakayama City on 27 November 1894. God tests those of whom great things

are expected. They are made to suffer. Konosuke was no exception. He

grew up with adversity.

45
He was the youngest child in a family of eight. The year he entered

elementary school his eldest brother and sister and second elder brother

became sick and died one after another. The family was poor. The

year after, his father went to Osaka alone, probably to work. At age 9

Konosuke left his parents and started work as an errand boy in Osaka.

It was a lonely existence. First he worked at a hibachi shop [that is,

heaters] and then moved to a bicycle shop where he worked until age 15.

After he worked temporarily at a cement company for about 3 months, he

went to work in charge of interior wiring for the Osaka Electric Light

Co. He did this for 7 years and then quit at age 22, as mentioned above,

to become independent.

His motive for doing this is interesting.

"When Osaka got trolleys, I thought 'Ah! Electricity would be good'

and so I changed my line of business."

He had foresight. It is also said that he became independent because

he had been physically weak since birth. This way of thinking is just

the opposite of what is normally considered to be the more commonsensical

notion: Become a salaryman so that you can receive a stable monthly

income.

In any event Konosuke Matsushita started his business. He began with

the production of a socket which he himself had improved.

Written this way it is a nice story. However, his employees were two

friends, Hayashi and Morita, and they quit after just 3 months. This

left only his wife and her brother, Toshio Iue, who founded the Sanyo

Electric Co after the war. Furthermore, the new-style socket did not

sell.

Matsushita put the metal cap on an electric bulb to practical use and

began to manufacture a modern attachment plug. This was succe-sful and

formed the foundation of the business. What made Matsushita Electric

into what it has become today, however, was the epoch-making "cannontype battery lamp" for use on bicycles which was developed in 1923.

To digress for a moment, managers like Konosuke Matsushita who spend their

entire careers wrestling with product-development technology are very

rare. He says:

"I must have about 100 patents and utility models, but they have expired

and the exclusive production rights have stopped."

This history of working diligently to develop one new product after another

is what made Matsushita Electric and sustains it today. It has become

the company's "tradition." Public patents are a good indication of a

company's technology-developing capability. Between 1971 and 1982

Matsushita has been granted a total of 60,210 patents, which ranks them

46
3rd among all Japanese companies. The two companies that are higher

ranked, Hitachi and Toshiba, both have heavy electric machinery departments. If the 25,836 patents of the 6th-ranked Matsushita Electric Works

were added, however, Matsushita would surpass 2nd-ranked Toshita by more

than 20 percent, which indicates how superior Matsushita's technologydeveloping capability really is.

To return to the story of the company's founding, even Matsushita Electric,

which saw itself growing smoothly, could not avoid the Great Depression

and the resulting panic in 1929. Suzuki Shoten, which grew rich during

World War I, went bankrupt and the bank it dealt with, the Bank of Taiwan,

was in critical condition. The financial panic was like a storm which

intensified day by day, and blew across the entire country. And with

the great stock market crash on Wall Street in 1929, a worldwide depression

began.

The situation was not good and the following episode has been told:

The head of the Mitsubishi Corporation's Osaka branch, Yanase, ran to

that company's headquarters in Tokyo and, without wiping the sweat from

his face, panted:

"It's terrible! Every house [company] in Osaka has collapsed. The only

things left standing are the Tenno Pagoda and Sumitomo!"

There is no reason to expect that Matsushita Electric would be the only

company able to remain out of harm's way.

To make matters worse, the depression occurred just after Matsushita

Electric's headquarters and main factory were newly established in Ohirakicho

Osaka. This was like plucking a string already stretched to its breaking

point. Sales suddenly dropped by more than half. By the end of December,

inventory was so high that nothing more could be placed in the warehouse.

Konosuke Matsushita was bedridden at this time. His brother-in-law Iue

and Itsuro Takehisa were taking care of matters in his place and they

came to him with the following proposal:

"We can sell only half of our goods. Cutting production as well as the

work force by half should get us over these difficulties..." Other

companies were doing the same thing. It was probably the logical thing

to do.

Although sick in bed, he was the manager and could not be left in the

dark about the situation. He was deeply distressed.

Afterward Matsushita recalled that he "was really puzzled. I wavered

between doing this and doing that. The moment I heard their resolute

opinion I made up my mind. We would cut production by half immediately,

starting that day. Not one employee would be laid off, however. The

47
way to go was to operate the factory for half a day, thereby cutting

production by half. Employees would receive their full monthly salary

without reduction. In return they would not take any holidays and work

as hard as they could to sell the merchandise in stock."

This was very successful. By February of the following year all the

merchandise in the overladened warehouse was sold. Not only did Matsushita

Electric abandon half-day operations, but business activity returned to

the point where the company had to produce as much as it could. Was this

the origin of "marketing Matsushita"?

In any event this was not a plan which was carried out with the knowledge

that things would get better in thefuture.

Konosuke Matsushita relates:

"No, if one were to [coolly] calculate, dismissals would have had to

been made. That is why I did not make any calculations."

He did not make any shortsighted calculations on his abacus.

His ultimate calculation was that "people are assets and should not be

trifled with frlike the beads on an abacus]."

It would be correct to say that this is thefoundation of Matsushita Electric's

personnel policy. Apart from one unusual period right after the World

War II this spirit has been passed on and nurtured as well.

"Business Theory" Inherited and Refined by Successive Generations of Top

Executives

In any event Matsushita Electric was able to pull out of the depression

and start out on the road to recovery quicker than other companies.

Then its business theory was announced publicly. The following is

conjecture on my part.

If the life of a person like Konosuke Matsushita lasted forever, there

would have probably been no need for the bombastic announcement and written

declaration of a business theory. It would simply be okay for him to

consider measures extemporaneously in response to the circumstances at

that time.

An individual's life is not eternal, however. What is forever is the

company. Moreover, it is a business that started from scratch and was

nurtured. Only someone who has founded a company could understand that

kind of devotion.

"Everything will be all right as long as I am alive. I am confident that

Matsushita Electric can ward off any recession and continue to grow.

But if a depression such as this should occur in the next generation...?"

48
History of the Matsushita Electric Industrial Company

1.

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Key: 1. 1918

2. 1929

3. 1935

4. 1955

5. 1965

6. 1975

7. 1982

8. 7 March 1918 Matsushita Electric Equipment Works founded

9. March 1929 name changed to Matsushita Electric Works

10. 15 December 1935 Matsushita Electric Industrial Company

established

11. 16 January 1979 Matsushita Battery Industrial Company established

12. April 1966 Matsushita Warehouse Company established

13. March 1972 National Product Center established

14. 1 June 1977 above two become Matsushita Product Distribution

Warehouse Company

49
Key (continued):

15. 17 January 1977 Matsushita Housing Machinery Company established

16. 17 January 1977 Matsushita Industrial Machinery Company

established

17. 19 January 1976 Matsushita Electronic Parts Company established

18. 11 January 1932 Otis Elevator Company of Japan established

19. October 1973 Matsushita investment in and tiw-up with Japan

Otis Elevator Company

20. 21 November 1969 Matsushita Judenshi Kogyo [Lifetime Electronics

Industrial] Company established

21. 1 July 1963 National Housing Industrial Company Ltd. established

22. August 1982 name changed to National Housing Industrial Company

23. June 1962 tie-up with Toho Electric Company

24. July 1970 name changed to Matsushita Transmission Equipment

Company

25. March 1982 name changed to Matsushita Transmission Company

26. 1934 Miyata Manufacturing Company established

27. May 1959 tie-up with Miyata

28. December 1963 name changed to Miyata Industrial Company

29. 17 January 1958 Matsushita Communications Industrial Company

established

30. 15 May 1956 Osaka Electric Precision Equipment Company established

31. August 1962 name changed to Matsushita Seiko [Precision Manufacturing] Company

32. 24 December 1955 Matsushita Electric Company of Kyushu established

33. 13 September 1927 Victor Company of Japan established

34. January 1954 tie-up with Victor

35. 15 December 1952 Matsushita Kosan Company established

36. 10 December 1952 Matsushita Electronics Industrial Company

established

37. 12 February 1939 Nakagawa Machinery Company established

38. February 1952 tie-up with Nakagawa

39. August 1953 name changed to Nakagawa Electric Company

40. November 1972 name changed to Matsushita Reiki [Cooling

Machinery] Company

41. 26 December 1935 Matsushita Electric Company established

42. August 1943 name changed to Matsushita Aircraft Industrial

Company

43. 1945 name changed to Matsushita Electric Works

44. 20 August 1935 Matsushita Electric Trading Company established

Matsushita undoubtedly felt the need to leave a clearly stipulated

business theory when he thought along these lines. But Konosuke Matsushita

was still 39 at the time, which is considered young today. It was

different then. The span of life was said to be 50 years. Furthermore,

Matsushita was approaching the critical age of 42 [unlucky year for men

in Japan] and he was physically weak. No doubt he acutely felt the

necessity of establishing a business theory for future managers to follow.

50
On 5 May 1932 he announced this theory and fixed this day as the first

anniversary of the company's founding.

The greatness of Matsushita Electric lies in the fact that successive

presidents have followed and prompted it.

The date is 10 January 1971. As is customary in the beginning of the

year, Konosuke announces the company's business plans for the coming

year. When he is finished he approaches the podium again to announce

his retirement as president.

"On 27 November of last year I became 65. I have worked hard during

all of those years. After much consideration, I have decided to step

down as president and to keep an eye on the company from behind the

scenes as chairman."

This surprised everyone. On the same day at a meeting of the board

of directors, his son-in-law, Seiji Matsushita, was installed as the

second president of Matsushita Electric.

A descendant of the old Count Hirata family, Seiji was wellborn. In 1935

he graduated from the law department of Tokyo Imperial University where

he studied politics. After working at the Mitsui Bank, he entered

Matsushita Electric in May 1940. His educational and employment

backgrounds were ideal. Since he married Konosuke's only daughter,

Sachiko, and was adopted into the Matsushita family, it is probably

correct to say that Seiji was promised the presidency from the outset.

Seiji issued the following message to the employees after he assumed

his post on 25 February.

"As you know, our former president has given us a firm business direction

and philosophy about this company's duty. The policies and plans for

every kind of task and the way they should be carried out all have

their roots there."

This emphasized the fact that Matsushita's business theory was unchanging.

Kotaro Takahashi, who rose to the position of vice president at the

same time, also spoke:

"I do not have any special instructions as vice president. [Matsushita's]

business theory is more than adequate for Matsushita Electric."

On 17 January 1977 when the top personnel were announced by Matsushita

Electric, everyone was dumbfounded. This is because Toshihiko Yamashita,

who was only number 25 in the pecking order on the board of directors,

jumped to the president's chair. This is commonly known as "Yamashita's

leap" and has become a metaphor for a momentous selection.

On the 60th anniversary of the company's founding, Yamashita said:

51
"What is the starting point for the establishment of Matsushita Electric?

First, it should be a company upon which society looks favorably. Second,

its system of operations should hold true not just in Japan, but anywhere

in the world."

The company was trying to move in accordance with the basic theory of

business. But times change and the employees' attitudes are not

necessarily the same as before. The trend of the age, "individual

happiness before that of the company," could not be ignored. Therefore,

it became necessary for Yamashita as president to explain the business '

theory in up-to-date terms. In this sense, Toshihiko Yamashita is an

excellent modern-day manager. He continued:

"To interject my personal opinion, it is necessary that the goal of the

individual coincide with the goal of the company which is concerned for

his well-being. In other words, the goal of the company must be an

extension of the individual's goal."

Konosuke Matsushita expected a lot from Yamashita.

"The new president must not be just loyal and simply follow the traditional

policies. This is important, but he must also be a person who can come

up with new ideas that build upon them. I am sure Yamashita will do

as expected."

He has responded splendidly.

Konosuke Matsushita's "business theory" of 5 May 1932 has passed through

the hands of successive top managers, such as Kotaro Takahashi, Seiji

Matsushita, and Toshihiko Yamashita. It has been refined by each of them

in the above-mentioned ways and sheds a brilliant light.

"Business Is Set Up To Make Money"

At this point there might be some disagreement. "One cannot live by

theory alone."

Right. But that goes without saying. A corporation which operates in

a capitalist economy tries to maximize the profit on its investment by

whatever means. It is a life or death struggle and customarily the

winner will prosper and the loser will dropout.

There are no explanations or excuses.

Konosuke Matsushita is the "god of business." There is no reason why

he would be indifferent to the "pursuit of profit." But in doing ao he

follows the rule of right, which is just a touch different from the

manager who follows the rule of might.

52
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53
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54
Profile of Successive Matsushita Electric Industrial Company Executives

(All Executives Since 1961) No 1

Key:

1. Chairman

2. President

3. Vice President

4. Managing Director

5. Executive Director

6. Director-Counselor

7. Director

8. Inspector

9. Name

10. Year of Birth

11. Educational Background

12. Year of Entry into Company

13. Current [Status]

14. Konosuke Matsushita/1984/1913 Kansai School of Commerce and

Technology/Founded Matsushita Electric Equipment Works 1918,

presidency 1935/Director-Counselor

15. Seiji Matsushita/1912/1935 Tokyo University, Politics/1940/

Entered Mitsui Bank 1935, Inspector 1944, Director 1947,

Vice President 1949/Chairman

16. Kotaro Takahashi/1903/1920 Kobe Commercial School/1936/Asahi

Kandenki [Dry Battery] Company Executive Director 1929, Managing

Director 1949/Advisor

17. Tetsujiro Nakao/1901/1923 Tokyo School of Technology and Science/

1927/Director 1935, Inspector 1937, Executive Director 1952/

(Deceased)

18. Tsuyoji.Fujio/1907/1930 Kobe Commercial High School/1930/

Esecutive Director 1949/(Deceased)

19. Takeo Enozaka/1908/1930 Kanaai School of Commerce and Technology/1925/Director 1949, Executive Director 1958

20. Hirozo Tanimura/1900/1918 Kyoto Sanchu [Middle School Number

3]/1935/Director 1942, 1947, Director 1958/(Deceased)

21. Shigekazu Nishimiya/1910/1932 Special Department Attached to

Kobe Commercial College/1932/Director 1958

22. Tan Ogawa/1908/1931 Tokyo University, German Law/1959/Director

1960/Advisor

23. Saburo Matsumoto/1897/1922 Tokyo University, German Laxv/ 1953/

Entered Sumitomo Bank 1936, Managing Director Sumitomo Bank 1947,

Matsushita Director 1953

24. Musubu Momose/1897/1924 Tokyo Commercial College/1953/Entered

Sumitomo Bank 1938, Executive Director Osaka Sumitomo Bank

1950, Matsushita Director 1953/(Deceased)

25. Akemi Kajiya/1911/1929 Shimane Prefectural Commercial School/

1929/Director 1949/(Deceased)

26. Asaji Yoshikawa/1911/1932 Nagaoka School of Commerce and Technology/1934/Director 1949/(Deceased)

55
Key for Profile 1 (continued):

27. Kokichi Matsuno/1906/1933 Kanto University (Law)/1939/

Director 1949/Chairman Victor Company of Japan

28. Seiji Miyoshi/1907/1926 Takigawa Middle School/1930/Director

1958/President Matsushita Electronics Industrial Company

Yoshio Shimada 1908/1928 Tokyo Electrical School-affiliated

school/1937/Director 1960/(Deceased)

TokuHigashikunI/1913/1935 Yokohama School of Higher Technology/

1935/Director 1960/President Matsushita Battery Industrial

Company

29

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57
Profile No 2 [continued]

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58
"Profile of Executives" No 2

Key:

1. Chairman

2. President

3. Vice President

4. Managing Director

5. Executive Director

6. Director-Counselor

7. Director

8. Inspector

9. Name

10. Year of birth

11. Educational background

12. Year of Entry into Company

13. Current [Status]

14. Hiroshi Yasukawa/1914/1936 Oita School of Higher Commerce/

1936/Director 1960/lnspector

15. Seiji Hino/1913/1933 Osaka Commercial College (Department of

Higher Commerce)/Director 1950/Permanent Inspector

16. Taizo Ashida/1903/1927 Tokyo Commercial College/1953/Entered

Sumitomo Life Insurance Company 1927, President of that

company 1947, Matsushita Inspector 1953/(Deceased)

17. Takeo Ito/1894/1918 Tokyo University, German Law/1960/Entered

Osaka Commercial Shipping Company 1918, President of that

company 1947, Matsushita Inspector 1960/(Deceased)

18. Kaishun Nakagawa/1907/1924 Seiki Commercial School/1964/

Established Nakagawa Electric Company and became Managing

Director 1924, President of Nakawa Electric/(Chairman of

Matsushita Reiki Company)

19. Yujiro Koike/1908/1931 Tohoku Technical College/1962/(Deceased)

20. Takayoshi Inai/1909/1932 primary school/1930/(President of

Matsushita Judenshi Industrial Company)

21. Seiji Tanba/1911/1932 Osaka Commercial College (Department

of Higher Commerce/1932/President Matsushita Electric Works

1947/Inspector

22. Hayata Tokimitsu/1912/1032 Osaka Joto Commercial School/1932

23. Hiroshi Saeki/1914/1936 Osaka Commercial College (Department

of Higher Commerce)/1936/(Permanent Inspector of Matsushita

Electronics Industrial Company)

24. Keiichi Takeoka/1915/1933 Tsu Middle School/1933/Managing

Director

25. Sunkichi Shirosaka/1921/1944 Tohoku Technical College/1946/

Vice President

26. Kyutaro Isomura/1917/1937 Tokyo Commercial College (School of

Commerce)/1937/(President of Matsushita Electric Trading

Company)

59
Key for Profile 2 (continued):

27. Masao Matsumoto/1915/1930 Osaka City (West) High School

Number 6/1934

28. Taro Kuninobu/1916/1933 Yanai Commercial School/(President

Matsushita Electronic Parts Company)

29. Isao Asano/1919/1936 Kyoto Commercial School Number 2/1936/

Permanent Inspector of Matsushita Battery Industrial Company

30. Takeshi Yutsu/1910/1931 Osaka School of Foreign Studies/

1955/Advisor

60
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Profile No 3 continued on following page

61
Profile No 3 [continued]

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62
"Profile of Executives" No 3

Key:

1. Chairman

2. President

3. Vice President

4. Managing Director

5. Executive Director

6. Director-Counselor

7. Director

8. Inspector

9. Name

10. Year of Birth

11. Educational Background

12. Year of Entry into Company

13. Current [Status]

14. Mitsuo Tsuruta/1921/1942 Meiji University (Commerce)/1944/

Managing Director

15. Shozo Horita/1899/1926/Kyoto University (Economics)/1972/

Chairman Sumitomo Bank 1971/(Honorary Chairman, DirectorCounselor Sumitomo Bank)

16. Motoyasu Nakayama/1906/1929 Tokyo Commercial College regular

course/1972/Counselor Industrial.Bank of Japan 1970/Director

17. Akira Harada/1920/1941 Tokyo University (Law)/1971/Vice

President

18. Toshihiko Yamashita/1919/1937 Seno [Izumio?] Technical School/

1938/President

19. Yoshio Asada/1920/1943 Kohe Commercial College/1943/Managing

Director

20. Masaaki Arai/1912/1937 Tokyo University (Law)/1974/Sumitomo

Life Insurance Company President 1966/lnspector

21. Shohei Yamamoto/1917/1935 Hyogo Prefectural Technical School/

1935/(Permanent Inspector Matsushita Electronic Parts Company)

22. Hirokichi Kikuchi/1919/1939 Nagoya Commercial School/1939

23. Shigesaburo Nagai/1922/1938 Waseda Univeristy (Science and

Engineering)/1948/(President Matsushita Seiko Company)

24. Noboru Higuchi/1919/1941/Yokohama Professional School/1947

25. Yoshio Iida/1922/1946 Tohoku University (Science)/1964/(Vice

President Matsushita Electronic Parts Company)

26. Takao Funabashi/1920/1941 Yamanashi School of Higher Industry/

1952/Executive Director

27. Setsuo Aoki/1926/1948 Osaka Technical College/1951/(President

Matsushita Reiki Company)

28. Kyonosuke Ibe/1908/1933 Tokyo University (Economics)/1979/

Chairman Sumitomo Bank 1977/Director

29. Hajime Suzuki/1920/1937 Kasaoka Commercial School/1937/

Managing Director

30. Ken Abe/1923/1944 Professional School of Waseda University/

1948/Managing Director

63
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Profile No 4 continued on following page

64
Profile No 4 [continued]

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.65
"Profile of Executives" No 4

Key:

1. Chairman

2. President

3. Vice President

4. Managing Director

5. Executive Director

6. Director-Counselor

7. Director

8. Inspector

9. Name

10. Year of Birth

11. Educational Background

12. Year of Entry into Company

13. Current [Status]

14. Minoru Morita/1923/1951 Tokyo Institute of Technology

(Mechanics)/1957/Managing Director

15. Teruo Tanii/1928/1948 Kobe Technical College/1956/Vice

President

16. Mitsuo Nakai/1930/1952 Doshisha University (Engineering)/

1952/Executive Director

17. Toshio Nakao/1925/1945 Osaka Technical College/1946/Executive

Director

18. Takashi Yamazaki/1922/1940 Matsushita Electric Employee

Training Institute/1940/Executive Director

19. Shigeru Hayakawa/1925/1950 Osaka University (Physics)/1959/

Managing Director

20. Kazusaburo Izaki/1914/1935 Osaka Commercial College (Department

of Higher Commerce)/1935/Advisor

21. Kazuo Fujioka/1929/1945 Matsushita Electric Employee Training

Institute/1945/Director

22. Shigeyuki Nishima/1928/1953 Osaka University (Engineering)/

1953/Director

23. Shiro Dosai/1930/1953 Osaka University (Law and Economics)/

1953/Director

24. Hifuo Okashiro/1931/1954 Waseda University (Business)/1955/

Director

25. Katsumi Yokoi/1920/1943 Kyoto University (Law)/1961/Director

26. Keiichi Takahata/1929/1950 Kanezawa Technical College/1950/

Director

27. Tadao Suzuki/1927/1953 Osaka University (Law)/1953/Director

28. Shunji Sakuma/1931/1954 Osaka City College (Economics)/1956/

Director

66
He says:

"Business is set up so that a profit will be made. Without gathering

talented people from all over the country, it cannot be carried out.

The same is true with money. An unprofitable public enterprise is something that cannot be allowed. In certain cases it is a sin. I think

this is the principle of money-making. If I do not make money, I will

get out of business.

If I did not,, the business would no longer be public; it would become

a "personal" venture. Furthermore, [business] follows the laws of nature.

It is natural to collect money when goods are sold. But there are many

people who go to the banks to borrow without collecting money. They are

doing something that is not natural and this violates the laws of

So, how much profit should one aim at? On this subject Konosuke Matsushita

states:

"The aim of business is only to contribute to society. If it contributes,

then quite naturally it will be appropriately rewarded. The amount of

compensation will depend upon the degree of contribution."

A splendid notion, but some people would not readily agree with his

reasoning. "Why should profits be in accordance with the contribution

to society." If one looks at things in a cut-and-dry manner, this is

the kind of argument one hears:

Suppose you have an article that costs 10,000 yen. And suppose it usually

sells for 11,000 yen. The profit would only be 1,000 yen. However,

if by some means you were able to sell it for 20,000 yen, your profit

would be 10,000 yen.

If this were the case, does this mean that the contribution to society

in the latter instance is then times that of the former?

This is a petty and shallow way of thinking.

Matsushita Electric sets a price which society recognizes to be fair and

reasonable. From the beginning there has never been the idea of "rip-off."

Therefore, the only way for Matsushita Electric to increase profits is

to reduce costs.

In this sense the contribution to society is measured by how much costs

can be reduced. In order to do this, much effort is being put into

developing technology and controlling production. Therefore, President

Yamashita says: "Technology is business itself."

67
However, the goal of Matsushita Electric is not just to keep reducing

costs forever. Above all else costs cannot go to zero. President

Yamashita emphasizes that "the first priority is to lower costs as much

as possible. But if we were to just keep reducing our costs, other

makers would be able to sell at a lower price without reducing their

costs. We would get bogged down in excessive competition. Therefore,

the top manufacturers must develop new products that possess a high percentage of added value. Then if the other makers follow suit, we

produce another new item."

Matsushita Introduces The "Division System" Before America

We now understand both the business theory and aims of Matsushita Electric.

In order to realize and maintain them, however, systemization is needed.

This is the "division system" of which Matsushita Electric is so proud.

Before I get into this, however, I would like to relate a somewhat

aprocryphal story.

Matsushita Electric's headquarters are currently located in Kadoma City,

Osaka Prefecture. The company decided tp move to this site and build

its main factory at the end of 1932, the year that the business theory

was announced. It was the first step in making [Konosuke Matsushita's]

vision a reality.

In any event it was decided that the company would move to Kadoma from

its original site in Daikai. There was a need for 500,000 yen. It

had on hand 200,000 yen. The remaining 300,000 yen would be financed

by Sumitomo Bank without collateral. Matsushita Electric had long

since had a very trustful relationship with the bank. However, Kadoma

faced in an unlucky direction [literally demon's gate] from Daikai.

Naturally some people thought "this will not do. We had better search

for another place."

Unforeseen events are something that cannot be avoided in business.

Furthermore, the manager is always all alone at the top with no one he

can depend on. In this situation many managers would believe in the

omens and become superstitious. The ordinary manager would probably

give up on the "inauspicious" Kadoma and look for another suitable site.

But Konosuke Matsushita is different.

"Topographically Japan runs from southwest (the back demon's gate) to

northeast (the front demon's gate). That is, the entire Japanese

Archipelago runs right along in an unlucky direction. If one were

really concerned about evil directions, one would be forced to get out

of Japan all together. So one should not be shackled by this."

Thinking in this way, he bought 3,500 tsubo [tsubo equals 35.58 square

feet] of land at Kadoma at 17 yen per tsubo.

68
Because he does not manage by emotion, but conducts business in terms

of practicality, he has always been able to make well-timed investments

in facilities and equipment. Konosuke Matsushita's philosophy was vividly

displayed as well, during the postwar boom in electric home appliances.

The new factory was completed. And Konosuke Matsushita's genius was

already working out the details of the "division system" at this time.

Matsushita put his son-in-law, Toshio Iue, at the head of the Radio

Division and his old friend, Itsuro Takehisa, at the head of the Lamp

and Dry Battery Division. Along with his other duties as manager,

Matsushita himself took over as head of the Wired Equipment, Synthetic

Resins, and Electric Heat Division.

This has great significance.

With the introduction of American business administration techniques

after the war, the Japanese economy grew at a phenomenal rate. Subsequently, Japanese enterprises became enormous in size and competed

with each other to introduce the division system. It was one of the

administrative fashions of the time. That is, it was considered by

many to be just another one of the things, like technology, products,

and methods, to have been imported at that time.

For other companies maybe, but not for Matsushita Electric.

Even in America, the so-called home of the division system, it was only

around 1940 when the division system first started to become a topic of

conversation. Matsushita Electric introduced it 7 years earlier.

The division systems of other companies are not just different in nuance.

It would be more correct to say that they are completely different things

all together.

What are the strong points of the Matsushita division system? I think

the three biggest things are: (1) the division heads have 100 percent

authority and responsibility; (2) it uses an internal capital system;

and (3) there are accountants. Number two is especially important

to the operations of the company.

Seiji Hino, a former vice president of Matsushita Electric, says: "The

Matsushita division system has come a long way since its inception in

1933, but it has just about been perfected since the internal fund system

was adopted in 1954."

"Division Heads Are Like Company Presidents"

Now, on the subject of internal funds...

A corporation is a corporation because it has capital. It is the same

with each of the Matsushita divisions. They each have their own funds.

This is known as the "internal fund" system.

69
How is the amount of funds determined? What corresponds to paying

stockholders?

When a new division.is inaurugated, the company makes a theoretical

calculation and provides it with all of its facility and operating

funds. In terms of money, business activity is nothing more than the

circulation of funds.

EAch division carries on its business using these funds.

If it were an independent company and did not make a profit, however,

it would not have to pay taxes and, as a rule, it would not have to pay

dividends. But a Matsushita division has to pay the main company

10 percent interest on its internal funds each year. This is known as

"capital interest."

If the division is not able to make a profit over and above the 10 percent

interest standard, this would be what Konosuke Matsushita calls a "sin."

If that were all a division had to do was pay capital interest of 10

percent, things would be easy.

But this would not be business-like for Matsushita Electric, overall.

The main office has operating expenses also, and, as a corporation,

it must pay taxes and dividends. For this reason each division must

give the main office 60 percent of its profits after the capital interest

payment. Furthermore, whether there is a loss or not, it must pay 3

percent of its sales to the main office.

After all these payments have been made, the division can finally keep

the remaining profits. There is no capital interest on this amount.

Each division is free to use this money as it wishes. The more money

the division makes, the more funds the division will have for itself

and it will come to resemble a superior company.

On the other hand, if the division's income is worse than anticipated,

quite naturally its operating funds will become depleted.

When this happens the division is absolutely prohibited from somehow

postponing payments and going to a bank for loans. It must borrow

the amount it is short from the main office. If the division does

not make great efforts, it will be over burdened with interest payments to the main office and its revenue situation will grow worse.

In reality, however, "borrowing money from the main office" is extremely

difficult.

Konosuke Matsushita states that "a division head is like a company

president. In the real world, would a company that says 'we have a

deficit and are going under' go to a bank to borrow money? And if

70
there were such a company, would it be able to borrow the money?" One

would not expect the company whose president has been saying this for

a long time to readily agree to such loans. And if the division were

finally able to borrow, the interest would be high and it would be

hard pressed for repayment.

The divisions which are in tune with the trends of the day will proliferate

and those that are not must become practical and try to alter their condition. Furthermore, they must always possess a system which can

automatically react to the business climate.

With regard to item number three, "accountants," it is sufficient to

understand that each is a "business manager" whose status has been vouched

for by the main office. I would, however, next like to talk about the

authority and responsibilities of division heads.

A Perfected System Which Cultivates Next Generation Managers

A division does not resemble an independent company only in the area

of finances.

They are similar, as well, with respect to purchasing raw materials and

supplying goods.

First, when a division is purchasing something from another division,

the price should be based on the market value. In the rare event that

the price which is asked for is higher [than the market value], the

division is permitted to make its purchases directly from a market outside of Matsushita Electric.

On the other hand, there are no excuses for failure.

For example, the yen was very strong in 1978. This was not the fault

of the divisions. It was a so-called act of God, something beyond their

control, but just the same those divisions whose business depended mainly

upon exports suffered a severe blow. At that time, Toshihiko Yamashita

clearly stated:

"The situation is certainly serious for these divisions and we understand

the reason for it, but there is nothing we can do about it. The only

question is whether they can survive or not. If a division does not

survive, then we will have to look for another division head."

It was said that [the struggling divisions] covered 60 percent of their

exchange loss by raising prices and the remaining 40 percent by other

practical means.

If a division head is charged with the responsibility [for the division's

success or failure], he is also given the authority [to make and execute

policies]. Advisor Kotaro Takahashi also emphasizes this when he

responds to inquiries from other companies.

71
"If you wish to.adopt a Matsushita-type division system, are you prepared

to give each division 100 percent authority along with the usual

responsibilities? ;f not, the system will not be effective?"

Furthermore, this system also cultivates the managers of future

generations.

Toshihiko Yamashita recalls the time when he was a division chief

himself.

"I only thought about not going bankrupt. I turned a deaf ear to

criticism and rumors and read books, instead of drinking sake, in order

to drown my sorrows and forget the various unpleasant things. Books

on astronomy did the most to relieve the stress."

Kotaro Takahashi relates that one of the biggest reasons for "Yamashita"s

leap" was because "as head of the Cooler Division, he succeeded in

establishing and Air Conditioner Division."

The Matsushita Electric divisions have the distinction of allowing those

in charge the freedom to display their originality and ability in this

way. In the area of commodities at least, each division can react flexibly

to the movement of the market by linking production directly to marketing.

This kind of complete control is an advantage of small businesses.

The business theory is in full force and the aims are evident as well.

The genius of Konosuke Matsushita was able to create a system which

remains forever fresh in order to realize those aims. The 21st century

is the time when Matsushita Electric will finally become an enterprise

that is well known throughout the world. Naturally the name of Konosuke

Matsushita will be remembered forever as the god of business who

accomplished all of this.

"Yamashita Personnel" Enter When The System Is Completed

"A wealth of experience is of course important, but the ability to act

is what is needed today. Among those with the same ability, the younger

person is preferable because he has the energy. In order to give the

top directors a varied experience, they are shifted about thereby producing

business vitality."

Over the past 6 years under Yamashita, personnel underwent a fierce process of rejuvenation. Yamashita's presidency has been characterized

by attacking things rationally. For example, the year after he became

president all 4 vice presidents, who averaged 70 years in age, were

retired. And every year after that he continued with the youth movement.

In the 2 years after his appointment, Yamashita applied his drastic

treatment: more than half of the working directors, 13 in all, were

retired.

72
Matsushita Electric Industrial Company Organization

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Key:

1. President

2. Overall Design Center

3. Service Headquarters

4. Credit Bureau

5. Publicity Department

6. Business Headquarters for Special Machinery

7. Business Headquarters for Facility-Oriented Machinery

8. Business Headquarters for Home Appliances

9. Commodity Inspection Headquarters

10. Production Technology Headquarters

11. Development Headquarters

12. Technology Headquarters

13. Tokyo Branch Office

14. Headquarters for All Overseas Affairs

15. Social Services Headquarters

16. Advertising Headquarters

17. Planning Department

18. Legal Department

19. Personnel Department

20. Accounting Department

21. Administrative Department

22. Communications Equipment Division

23. Battery Division

24. Housing Machinery Marketing Division

25. Industrial Machinery Division

73
Key (continued):

26. Electronic Parts Division

27. Electronics Industry Marketing Division

28. Air Conditioner Business Division

29. Precision Manufactured Fan Division

30. Pump and Health Division

31. Air Conditioning Machinery Division

32. Refrigerator Division

33. Bicycle Division

34. Infrared Apparatus Division

35. Photography Equipment Division

Photography Supplies

36. Fluorescent Light Division

37. SBC [Service Bureau Corporation?] Division

38. Restaurant Machinery Marketing Division

39. Office Equipment Division

40. Health Equipment Development Center

41. Microcapacitor Division

42. Micromotor Division

43. Electric Machinery Division

44. Kitchen Equipment Division

45. Compressor Division

46. Air Conditioner Division

47. Iron Division

48. Electric Heater Division

49. Rice Cooker Division

50. Rotary Equipment Division

51. Vacuum Cleaner Division

52. Washing Machine Division

53. Recording Equipment Division

54. Disc Player Division

55. Electronic Musical Instruments Division

56. Stereo Division

58. North American Video Exports Division

59. Video System Division

60. Video Division

61. Fujisawa TV Division

62. TV Division

Matsushita Electric would become enormous and rigid if he did not

seriously inject some new blood into the executive group and let in

some fresh air. And this, Yamashita decided, would be dangerous for the

future of the company.

But because these decisive personnel changes flew directly in the face

of the traditional Matsushita paternalistic ideal, there was a lot

of unrest within the company.

74
When Konosuke Matsushita, the "god of business," had his own individual

shop, he took care of his head clerks who had taken the good along with

the bad in the early days. This led to an aging executive class and

an organization which in general became bureaucratized and somewhat stagnant. Therefore, Yamashita took a scalpel to this situation, but the

backlash was strong.

President Yamashita himself said that "as a businessman I did not defer

to those who were older than me. As seniors, however, I knew that they

had the wisdom of experience and I recognized the importance of

incorporating it."

Realizing the negative effect that the sudden personnel changes were

having on the company, it seemed that afterwards Yamashita put on the

brakes. But over time the executives became Yamashita personnel. President Yamashita himself says that "although the youth movement is proceeding along, it is still far from completed." But today Keiichi Takeoka,

a managing director, is the only executive who is older than Yamashita.

One can understand how rapidly the youth movement has been progressing

when one notes that there were only two executives younger than Yamashita

when he assumed the presidency. In the 7 years since then Yamashita

has handpicked 21 directors. In a certain sense it could probably be

said that the Yamashita organization is just reaching maturity.

The Shift From "Clerks" To "Technocrats"

Beginning with the retirement of the four vice presidents, the series

of personnel changes which produced the Yamashits organization has served

to change the make-up of the executive group: The "clerks" have been

replaced by technocrats. This constitutes the Matsushita Renaissance.

Teruo Tanii, who has been rising rapidly in the company, is seen as the

next head of the technocrat group.

"That is why I was so hesitant about coming out here. You ask me if I

have heard anything from President Yamashita, but I have not. Anyway,

please do not tease. I'm a bit embarrassed by all of this you know."

So answered a perspiring Tanii to the Keidanren [Federation of Economic

Organizations] Press Club journalists, who continually asked about the

appointment of the next president. Theoccasion was. his appointment as

vice president in February 1983 and there was a conference together

with the announcement of a new product at a Tokyo hotel. But these

press meetings are often used as an indirect means of selling a candidate

for president. And since Matsushita Electric's headquarters is located

in Osaka and Tanii was not very well known in Tokyo, this was considered

to have been his "debut."

Although not as quick as "Yamashita's leap," vice president Tanii's rate

of promotion has been unusually fast. After he was appointed director

in February 1978, he rose to the position of executive direction within

75
just 2 years. After 1 year in that position, he became a managing director.

And then just after 1 year's experience there, he was appointed vice

president. He rose rapidly in the world, going from success to success.

Tanii has a unique background. He is not a dyed-in-the-wool Matsushita

Electric Co man, but entered the company after experience elsewhere.

He is from Kino City, Osaka Prefecture and was born in April 1928. He

is 55 years old, 8 years younger than President Yamashita who was born

in 1919. His family ran a sheet metal processing factory. He graduated

from Kobe Technical School (the present engineering department of Kobe

University) in 1948. With no particular aim in mind Tanii entered the

Shikishima Spinning Co, which was one of the 10 biggest spinning

companies at the time. He quit after 6 months and returned home for

a short time to work on some youth group projects.

"I entered a small business finance company to stop my life of aimlessness

and because there were not many chances for reemployment after the war.

I would get up early in the morning, put on work clothes, and do any

job. I drove a truck and supervised workers thereby getting a more than

adequate taste of both the 'good and bad' aspects of a small business."

Tanii entered Matsushita Electric in 1955 through the introduction of

the Matsushita Transmission Co chairman from Kino. He was assigned to

the Communications Division as a regular employee without a title and

started his career once again as a machine technician. After that he

worked exclusively in the strategic area of tape recorders and video

equipment.

Tanii came to the forefront after he was appointed head of the Video

Division.

Matsushita Electric's VTR's currently hold the number one position in

the world, but it was not always this way. At first, there was the

Sony-led Beta group offensive and, in addition to this, the various

companies which make up the coalition of Matsushita Electric's forces,

such as Victor Co of Japan and Matsushita Judenshi Co, did not have a

unified strategy. The company was treading a difficult path.

It was "Mr VRT," Vice President Tanii, who reorganized.the Video Division

and made it into Matsushita Electric's money-making division.

Yamashita's personnel appointments are based upon, as he himself says,

"performance." It is only ability that counts. Indeed his decisions

are sometimes said to be "too dry" [unemotional without regard for

seniority, loyalty, etc.].

After the oil shock, there were many export-oriented divisions whose

performance slumped due to the high value of the yen. Yamashita matterof-factly stated that "complaining will not change anything. If things

do not improve, then the only thing left to do is find someone who will

improve them. Doing as much as one can is expected and I can only base my

decisions upon results." Such is the severity of his decisions.

76
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77
A Summary of the Executives and Their Areas of Responsibility

Key: 1. Position

2. Name

3. In Charge of:

4. Chairman/Seiji Matsushita

5. President/Toshihiko Yamashita

6. Vice President/Akira Harada

7. Vice President/Sunkichi Shirosaka

8. Vice President/Teruo Tanii

9. Managing Director/Keiichi Takeoka/North America

10. Managing Director/Yoshio Asada/Public Relations

11. Managing Director/Mitsuo Tsuruta/Tokyo Branch

12. Managing Director/Ken Abe/Personnel

13. Managing Director/Hajime Suzuki/Accounting

14. Managing Director/Minoru Morita/Production Technology Headquarters

15. Managing Director/Shigeru Hayakawa/Both Technology and Development

Headquarters

16. Executive Director/Takao Funabashi/Headquarters for All

Overseas Affairs

17. Executive Director/Mitsuo Nakai/Business Headquarters for Special

Machinery

18. Executive Director/Takashi Yamazaki/Credit

19. Executive Director/Toshio Nakao/Legal Administration

20. Director/Motohira Nakayama

21. Director/Kyonosuke Ibe

22. Director/Kazuo Fujioka/Music Group

23. Director/Shigeyuki Nishima/Video Group

24. Director/Shiro Dosai/Publicity Department and Overall Design

Center

25. Director/Hifuo Okashiro/Business Headquarters for Facility-Oriented

Machinery

26. Director/Katsumi Yokoi/Social Services Headquarters

27. Director/Keiichi Takahata/Service Headquarters

28. Director/Tadao Suzuki/Electrication Group

29. Director/Shunji Sakuma/Business Headquarters for Home Appliances

30. Director-Counselor/Konosuke Matsushita

31. Permanent Inspector/Seiji Hino

32. Inspector/Seiji Tanba

33. Inspector/Masaaki Arai

34. Inspector/Hiroshi Yasukawa

78
In terms of age, it is quite natural that Vice President Tanii, who went

from one success to another under President Yamashita with his unemotional,

performance-based promotion decisions, would be regarded as his successor.

President Yamashita, himself, jokingly says that "Konosuke Matsushita

seems to think that I will work as president till I die." More seriously

he adds, "I think that it would be more natural to select the next

president from among the current vice presidents and not have anyone

again take the jump that I took. Tanii is still young so he could work

for a considerable amount of time [as president]."

When Konosuke Matsushita appointed Yamashita president, he said "I would

like to have you work for at least 10 years." Yamashita openly says that

"10 years is too long. About 6 years is better." Although he considers

6 years to be the physical and mental limit for life at the top, Yamashita

is already about to enter his 8th year as president. He has started

"Action "86," a Major reform project which aims at a "new Matsushita"

by 1986. There are many who feel that the reins will be turned over when

that is completed.

But Yamashita says "I do not have any thoughts about staying to take

care of things until my work bears fruit. Work is an endless process.

No mattere where you stop, you xtfill always be in the middle of something.

It is human to want to see the fruit of one's labors, but there would

be no end to it. Ultimately the decision about my stepping down lies

with Konosuke Matsushita." With a president in office like Yamashita

who has no desire to hold onto his position forever, it is impossible

to guess when the baton will be passed to his successor.

A Yamashita Organization Comprised of a Galaxy of Capable Executives

Vice President Tanii is in charge of carrying out "Action '86," which

can also be called "Yamashita's revolution." His appointment reflects

Yamashita's desire to groom Tanii for the top stpot. Through this

"reform" movement which extends throughout the entire Matsushita group,

Tanii will be able to broaden his intellectual horizon. The appointment

also reveals the warmth of the rationalistic president. Recalling his

bitter experience of being asked to assume the presidency all of a sudden

without any preparation, Yamashita wants to prepare the way for his

successors by making certain strategic arrangements.

The other members of the vice president group are Akira Harada, who is

at the head of the list, and Shunkichi Shirosaka.

Akira Harada, like Tanii, also came to the "pureblooded" Matsushita

Electric company in 1971 after serving elsewhere. He worked in MITI.

During the U.S.-Japanese textiles negotiations he was the director-general

of international trade and he used this experience when the color TV

dumping matter came up. Harada is famous for saying that America's onesided assertions "are like arbitrarily putting a golf hole in the middle

of the fairway" and turning negotiations in Japan's favor. The year after

79
he entered the company he became president of Matsushita America and

was indispensable to the company's strategy of becoming aggressive internationally. For just that reason, Harada spent a lot of time flying around

overseas carrying his favorite tennis racket. If Yamashita is a clearcut person, Harada is clear-headed.

Furthermore, he has keen insight into human nature which fits the Matsushita

profile perfectly. Harada is not just another former government official

who has taken a post with a private company. When he was head of the

Trade Promotion Bureau and giving out commendations at an awards

ceremony for superior businesses, he would purposely step down from

the platform and present the awards to the recipients directly.

It is said that Harada understands the Matsushita spirit more than any

lifelong executive. Konosuke Matsushita has a great deal of confidence

in him for just this reason. An example is that Harada has also been

involved in Kanasi financial circles, working as vice representative

secretary of the Kanasi Committee for Economic Development since April.

Shunkichi Shirosaka is the so-called general leader of the technical group.

He is the manager of the Wireless Research Institute which formed the

foundation of Matsushita technology. In this capacity he is also a father

raising electronics technicians. After he graduated from the engineering

department of Tohoku University in 1935, he spent 11 years as a technical

officer in the Navy. In 1946 he entered Matsushita Electric. He is

a scholarly type of person who lectures at Osaka University. He has

also displayed his political capabilities by bringing some 20 home

appliance and computer manufacturers in line with Matsushita's standardized

home personal computer "MSX."

Keiichi Takeoka, who is one of the many talented managing directors, is

in charge of North America. He was one of the first people in the Radio

Division to become involved in overseas affairs. He xjas president of

Matsushita America and is highly regarded for getting one-site production

in America on the right track. He is also the only executive who is

older than President Yamashita. As a man of integrity, he has many

"disciples."

Managing Director Yoshio Asada is in charge of public relations. He has

a cheerful personality and very extensive experience. He moved to his

present position from the Business Headquarters for Special Machinery

which he headed. Asada has been working to successfully bring about a

tie-up with IBM.

As president of Matsushita Tokyo, Mitsuo Tsuruta is the "face" of Matsushita

Electric in Tokyo. He has the reputation of being affable and courteous,

a man who does not make any enemies of the many acquaintances he has in

government and industry. When the pollution and conumser movements were

at a fever pitch, his attentive and sunny nature helped overcome the

problems.

80
Ken Abe is in charge of personnel. It is said that he had no lack of heroic

episodes in the past. He has a hearty spirit and a good head for figures.

At first glance Abe seems to be the quiet type, but he has toiled long

and hard in the business field.

Hajime Suzuki succeeded former vice president Seiji Hino as the head of

the Matsushita accounting system. He worked in the dry battery field

where he was known as the "stingy battery." He is a human computer who

carries out calculations to the smallest monetary unit [sen = 0.01 yen,

rin = 0.1 sen, mo = 0.1 rin]. He is one of the supporters of the Yamashita

organization and wants the company to obtain a business profit of 20

percent like the successful foreign companies.

Besides these gentlemen, there is Minoru Morita who is the head of the

Production Development Headquarters. This past February he was promoted

from executive director to managing director.

Morita's motto is "he who does one thing well will do everything well."

In addition to concentrating on manufacturing production equipment, he

is also further refining the mass producgion technology of which Matsushita

Electric is so proud. Using Matsushita's robot-based model factory as

a foothold, Morita wants to market the FA [factory automation] system

overseas. He states that "industry must continually replace the old with

the new. The Toyota merger [with GM] is significant only as a form of

shock treatment..." Morita is one of the brains in the Yamashita

organization.

Shigeru Hayakawa, who heads both the Technology and Development

Headquarters, is another important person in the field of technology.

He was scouted while working as an assistant at Osaka University and

subsequently joined the company. As Vice President Shirosaka's righthand man, Hayakawa is entrusted with important duties in the technological

area. A logical man of fiew words, he is a bit of an odd ball. The

greeting he gave upon assuming his present position lasted just one minute.

The executive director and regular director classes of executives in the

Yamashita organization are also populated with those who are highly capable

in administrative affairs. Mitsuo Nakai, the head of the Business Headquarters for Special Machinery, was born in 1930 and is young at 53 years

old. He became a director when Tanii became a vice president. He rose

to the position of executive director so quickly that for some time he

was viewed as a strong candidate for president. The Business Headquarters

for Special Machinery is an advance force, spun off from the Home Appliance

Division, that is focussing on OA [office automation]. This is an area

upon which President Yamashita has been concentrating most of his efforts.

A lot is expected of Nakai.

Including Tanii and Nakai there are nine important executives who were

born in the Showa era [since 1926]. Because they were appointed to

executive positions by President Yamashita and because of their ages

81
as well, most of these men did not have the chance to train under Konosuke

Matsushita directly. There are 21 men, including these 9, who were appointed

to executive positions by President Yamashita. With these appointments,

the Yamashita organization, which aims at becoming a comprehensive electronics manufacturer, is about 80 percent complete.

The youngest executive is Shunji Sakuma who was born in 1931. He works

under Vice President Tanii in the "Action '86" campaign. This past

November he became the head of the Home Appliance Business Headquarters

after being in charge of the strategic Economic Planning Department.

He is very intelligent and one of the people likely to sustain Matsushita

Electric in the future.

Keiichi Takahata must be characterized as being a bit odd. He is known

as another one of Matsushita Electric's "capable men." He joined the

management group 6 months after he quit as chairman of the Trade Union

Commission. The appointment appeared to be a reward for the successes

during his 20-year tenure as Trade Union Commission chairman. After serving

as Konosuke Matsushita's assistant, he is now eagerly working as the

head of the Service Headquarters.

Possibility Of "Third-Generation Matsushita" Restoration

On the one hand, there have been the above-mentioned series of.changes

in personnel. What cannot be ignored, on the other hand, however, is

the presence of the Matsushita family in the company headed by Konosuke

Matsushita. It is natural for both Director Counselor Konosuke Matsushita

and Chairman Seiji Matsushita to want to have the third generation of

the family, Masayuki Matsushita, follow in their footsteps.

Masayuki is Chairman Seiji Matsushita's eldest son. He was born in

October 1945 and is now 38 years old. After graduating from the economics

department of Keio University, he entered the company. Later he spent 1

year in America studying at the University of Pennsylvania. Masayuki

then studied sales at Matsushita America.

Upon his return to Japan in 1972, he went to Matsushita Judenshi. He

returned to America once again in 1976 as deputy chief of Matsushita's

Special Merchandise Division. Masayuki returned to Japan in June 1978

to become president of Matsushita Product Distribution Warehouse Company.

In November of the following year he became the head of the parent

company's Washing Machine Division.

The Matsushita Product Distribution Warehouse Company is the sole company

in charge of distribution in the Matsushita group. Although it is a

subsidiary, Masayuki as its head received training as a president for

3 years and 4 months. In addition to this, he was the head of a parent

company division.

82
When Masayuki returned to the parent company after his stint as president

of the Warehouse Company, it was rumored that he would be given a director's

position, but President Yamashita decided that ht was "still young. Gaining

experience is the important thing right now and there is no reason to

be in too much of a hurry. Once he has thoroughly learned about manufacturing

and selling in a division, which is the starting point of Matsushita

business, it will not be too late." As a division head he is a top executive who is, at this time, still being groomed for the top spot.

President Yamashita's attitude toward Masayuki is noncommittal. "I do

not feel like I am grooming him. Circumstances being what they are, he

will be given a chance, but after that it is up to him." With over 3

trillion yen in combined assets, Matsushita Electric Company is a mammoth

enterprise. Which does not mean that just because he is the founder's

grandson he should be put at the top of it.

But by putting Director Tadao Suzuki in charge of watching over Masayuki

for example, President Yamashita does show a desire to groom the thirdgeneration Matsushita [to take over the presidency], contraty to whatever

he may say publicly.

The washing machine market is one of the mature markets in Japan.

Competition in this market became heated, however, when Hitachi introduced

its hit model, Karamanbo. Masayuki countered this this spring with a

new-type washing machine, "Aisaigo," which is succeeding in increasing

Matsushita's share of the market.

This made the old guard very happy and earned a "passing grade" for

Masayuki. But they also figure that he will "be appointed director at

40 or so and executive director after 45." This means that the president's

baton will be passed to the third-generation Matsushita after Tanii.

There is the strong possibility that leadership of the company will be

restored" to a Matsushita, but because the Matsushita personnel policy

stands on the principle of ability and performance, "succession" is

not guaranteed.

During his 16 years as president, the second-generation Matsushita,

Chairman Seiji Matsushita, established the basis for an overseas strategy

He became president in 1961 when he was 48 years old.

Konosuke Matsushita himself says that for Masayuki the president's position

is 10 years away. Once he has become involved in 1 or 2 divisions and

really experiences the trials and tribulations of manufacturing and selling

things, it will not be too late." Viewed in this way, Masayuki's

accession" would take place in his latter forties once he has sufficiently

gone through the business wars.

83
But ultimately the matter of appointing Masayuki depends upon the wishes

of Konosuke Matsushita, the "god of business." Konosuke, who by his own

admission would like to continue on in his present role until the end

of his life, will be 89 years old this November. Although he has had

a long life blessed by good health, it is finite. Only God knows if

he will be alive 10 years from now. If Masayuki is popular, there will

be no problem with him becoming president. But if the appointment is

based solely upon sentiment, the long history of Matsushita Electric

personnel policy would have to be greatly altered.

The giant 1MB, with which Matsushita is negotiating tie-up terms, fell

into a business crisis due to a problem with succession. The old guard

around Konosuke Matsushita are seriously studying cases such as this

and Toyota, for example, but ultimately in the Japanese business climate,

capital and business logic are more easily said than done.

In any event, the executive make-up of Matsushita Electric is shifting

steadily from clerks to technocrats. Although the old guard, who

suffered along with Konosuke Matsushita since the time of his personal

shop, are still present, it can be said that Yamashita's goal with regard

to personnel has been more or less achieved. It has also been his

conscious effort to get away from people cut from the same cloth in order

to have an active work force that can respond to the diversity of this

age. How Matsushita Electric, whose objective is to become a comprehensive

electronics manufacturer, will look in the future depends greatly upon

President Yamashita and his people.

Finishing "Yamashita's Revolution," The "Action '86" Campaign [This

section by economics journalist Katsuo Yamamoto]

The electric machinery industry seems to be enjoying the growth of products that are in tune with the age. But the rate of growth varies widely

depending upon the area. For example, when one looks at the details of

the business results for the three all-around electric machinery companies

Hitachi, Toshiba, and Mitsubishi, one notes that the highest rate of growth

is in the field of electronics, such as semiconductors, computers, and

communications equipment. For the past 2 or 3 years the area of heavy

electric machinery has been in a state that can be described as a

structural recession because the demand for electrical power has not

increased. Except for VTR's, home appliances have shown only a singledigit rate of growth as well.

Quite naturally this harsh environment of change is also bearing down upon

Matsushita Electric whose kingdom is in home appliances. Hoxjever,

Matsushita and Hitachi, which are ranked first and fourth in VTR's,

continue to maintain a firm grip on the market. In addition, 1983 fiscal

year calculations forecast double-digit rates of increase for both sales

and profits. Although Matsushita Electric's prosperity is being sustained

by the growth of VTR's, that will not continue for very long. Like air

conditioners, it is expected that demand will drop off in 2 or 3 years.

Despite the large quantity of VTR's being produced, the profit rate is not

increasing even now.

84
Matsushita Electric, which is famous for being able to read the changes

of the age like Hitachi, has used such situations as a springboard for

growth.

Therefore, every time he has the chance President Yamashita will say

things like, "Matsushita is also in danger now," or "We cannot be unconcerned just because we are a big company," or "Success in one

thing shackles our feet and hands and weakens our will for new challenges,"

in order to arouse in the employees a sense of crisis. That is, it is

a psychological ploy to stir up a desire to challenge new areas.

OA and new media were fixed as the two pillars of the new area in early

1983. Focusing on these two, the company will broaden its base for moving

into FA, HA, and LA [factory, home and laboratory automation]. By doing

this, Matsushita hopes to develop a way that will take it from the 1990's

to the 21st century, from a home appliance maker to a comprehensive

electronics manufacturer.

The companywide movement "Action '86" was launched with this goal in mind.

Since it extends from the parent company to the subsidiaries and overseas*

it is also a movement that will put the finishing touches on the "Yamashita

revolution" which began in 1977. The period from May 1983 to early June

was a time for warming up and establishing goals. The movement itself

is expected to run from November 1983 to November 1986.

The main in charge of carrying this out is Vice President Teruo Tanii,

who is favored to succeed Yamashita. He is a very capable man who made

Matsushita's VTR's number one in the world. His assistant is Director

Shunji Sakuma, who is very bright and highly regarded. Matsushita will

take a scalpel and operate upon the "sacred" division system and build

a new organizational foundation by investing its resources of people,

money, and equipment in electronics—mainly semiconductors and computers.

Matsushita's aim is to be recognized as a rival to Hitachi, Fujitsu, and

NEC when the movement is over in 1986.

The Matsushita division system has been based upon the principle of

producing one article per division, but OA, new media, FA, and HA constitute

an area which is made up of a combination of semiconductors, computer

communications, and software. Because each of the 38 divisions is mainly

concerned with the production of a single item, it is thought that the

division system will not be able to cope in this age of complex items.

For this reason, the Radio Division and Recording Equipment Division,

two famous divisions in existence since the introduction of the division

system in 1933, were combined to form the new General Audio Division.

Both divisions are at odds with each other over the production of

radio cassettes. OA equipment stretches over 7 divisions, so the

territorial disputes will become even more heated. The division head

is the lord of his domain, but they are strictly evaluated and ranked

A,B,C, and D according to their profit ratio. They are replaced if they

cannot improve their results for several years. If the results are poor,

there are no excuses. "It is expected that they do the best that they

can" (Konosuke Matsushita)

85
During the period of high growth, the division system displayed an

aggressive, offensive style of business power. During the period of low

growth, however, the self-supporting accounting system became a.restraint

and the passive, defensive aspect of the division system was revealed.

The division system has the merit of being able to attack and distribute

risk throughout the company. But when it falls into narrow sectionalism,

such as tertitorial fights for example, strategic unity and coordination

as a group becomes difficult. This is one of the division system's weak

points because efficiency is subsequently reduced and new investment and

growth is prevented.

Furthermore, elements of the technology that are essential for producing

complex products in this age of combined technology are common to all.

the divisions. But since they are so widely scattered between the divisions,

Matsushita has not been able to display the effectiveness of its favorite

mass production techniques in this area. In areas where the market is

small and demand is not expected to increase very much, business

efficiency can be improved through divisional integration. Integration

also aims at making even mature products profitable. Quite naturally

integration would create a surplus of employees, but the plan is to

relocate these people in the new semiconductor and computer fields.

This would be exactly what Hitachi did when it took people and money from

the depressed heavy electric area and placed them in the areas with the

potential for high growth—semiconductors and computer. Probably because

it is afraid of being ignored by the electric power companies, Hitachi

does not publicly acknowledge this strategy, but it is boldly rearranging

its areas of operation. Similarly, Mitsubishi combined its Heavy Equipment Headquarters and Machinery Headquarters in October 1983 to form the

Electric Machinery Headquarters.

The heavy electric equipment section of another all-around electronics

manufacturer, Toshiba, is rated very highly in industrial cricles, so

it is not going as far with strategic conversion as Hitachi and Mitsubishi.

These comprehensive electronics makers have shifted their weight to the

same areas and there the might of the mammoth companies will collide head

on. It is predicted that it will be difficult for the market to adjust

in such a way that all of these companies can be accommodated.

In any event, Matsushita's "Action '86" movement puts into practice the

"philosophy of Yamashita." It has an offensive aim, to move aggressively

into the computer field, and a defensive aim, to maintain profitability

in a mature home appliance area through efficiency. Disregarding the

defensive aspect for the moment, there is some doubt as to whether the

offensive aim can be carried out as planned.

"Minicshita" Business Practices not Applicable in Semiconductors and

Computers

The standard bearers in electronics are semiconductors and computers.

One must also add communications technology in this age of information

network systems [INS]. The development of this trinity is necessary.

86
Although Matsushita is ranked fifth in sales of semiconductors, most are

for public and household use. Its Achilles' heel is that under 20 percent

of its sales are for use in high technology industries. Matsushita is

working on a 64K bit and is working in the area of VLSI memory as well;

it plans to makret a 256K bit in mid-1984. It also has 4-bit and 16-bit

microcomputers. But Matsushita is quite a distance behind the top makers

NEC, Nitachi, and Fujitsu. Besides spurring on development, such as the

development of circuit technology at its Information Logic Research

Institute, Matsushita is trying to catch up to the various advanced

companies through aggressive investment. Without a doubt the effort is

being made. The top makers are not standing still either, however, and

the tempo of technological innovation is very fast. In 1983 it was a

seller's market due to the overall shortage of semiconductors. Thanks

also go to the fact that the friction between the United States and Japan

over semiconductors was, for the time being, cleared up. However, once

supply exceeds demand, prices will drop dramatically. About 5 years

ago, over a period of 2 years, prices fell by only 10 percent. But 2

or 3 years ago the price of a semiconductor dropped to less than one-tenth

its original price in just 1 year. Semiconductors are such as extremely

risky commodity that the braintrust of a manufacturer must agonize over

the timing of their investments. It is not just a simple matter of

spending money and becoming stronger. In addition to becoming cheaper,

the lifecycle of a semiconductor is very short. It is said that the semiconductor is a product to which the "Matsushita way of doing business

by copying" will not apply.

Rather than being the first to do something oneself, there is less

danger in coming later and chasing after a product that has been developed

by someone else. On the subject of the so-called "Mimicshita" way of

doing business by copying, President Yamashita says: "If it is a

produce that can be easily copied, I think the word copycat applies.

That is, a product that can be easily manufactured by a copycat is a

product without much originality. Before when there was no difference

in the quality of products, victory was won by the better seller. Today

no matter how strong a company's marketing network is, he is not strong

without quality products. All of which makes a strong case for technology."

Up till now, therefore, the copycat way of doing business was a rational

business strategy.

It is not true that the Matsushita Electric Company has come this far

by ignoring technology. Since its founding, Konosuke Matsushita and his

successors have been almost greedily preoccupied with technology,

technology, and more technology in the development of products.

"Mimicshita" is an envious term used by other companies against an

almost too dominant marketing power. Although one may not be in the

lead, one must have the legs to catch and pass the leader. Technology

and marketing capabilities are a company's legs. The top spot cannot

be attained without both.

87
When he is responding to questions, therefore, President Yamashita merely

shrugs off the insulting notion, no matter how misguided it may be, that

Matsushita Electric Company did copycat business in the past and states

that he fully recognizes the importance of technology.

"MSX," Matsushita's Touchstone for the Future

In addition to semiconductors, another crucial area for Matsushita in

becoming the "new Matsushita" is computers. It is not clear whether

Matsushita intends to move up just to the manufacture of personal

computers or all the way up to large general purpose machines, but it

will be fairly difficult for Matsushita to get to the top of even the

personel computer market.

Teaming with America's number one manufacturer of software for personal

computers, Microsoft, Matsushita Electric initiated the development and

production of a standardized home personal computer, MSX.

Up till now personal computers have been inconvenient for users because

each company's machine uses different software. That is, company A's

hardware does not work with company B's software. Although most of the

basic software logic is manufactured by Microsoft, subtle differences

have eliminated interchangeability. This has not only been user unfriendly,

but it has led to big losses for the makers themselves. That is, a maker

will market a machine, but for that machine to become popular specific

software must be developed by a software company, the so-called third

party. The more software that is developed, the greater the machine's

usefulness and the greater its market share. But with hardward makers

competing individually among themselves, the development of usable software becomes less of a factor.

Standardization is the idea which contravenes the normal procedure of

the computer industry. And this is the idea behind the MSX It would

cost too much money for the late-starting Matsushita to become involved

in the entire process of personal computer manufacturing, from hardware

to software, and furthermore it is not certain whether such an investment would even pay off in the end. Matsushita's idea appealed to all

the various home appliance makers who wanted to get into the field of

personal computers, but were hesitant. It is like one not being afraid

to cross against a red light as long as everyone crosses together. It

was a good tactic. The idea was that since everyone would be on the

same technological level as far as personal computers were concerned,

the company with marketing power would succeed. Furthermore, the third

party software companies would be able to relax and concentrate on

development because the hardware standard would be the same. There is

a weak point, however. The products are basically the same, so it is

hard to differentiate between them. Furthermore, the prices are verycompetitive, around 50,000 yen. For most of the companies it is a

matter of depending upon mass production and marketing capability in

order to succeed.

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It is predicted that Matsushita, Sony, Sanyo, and Hitachi will form the

top group in production of the MSX, but it is feared that because close

to 20 companies will get in to the market, excessive competition will

lead to a price war. Therefore, the top companies like Matsushita will

try to make money off personal computer-related products, such as Braun

tubes, floppy disks, etc. The aim is to get a foothold in the personal

computer field while they learn unfamiliar personal computer technology

and marketing expertise.

There are those, however, who think that the plan of the maker of various

home appliances will not go as easily as they think. Publicly the top

maker, NEC, approves of the plan, but it is seriously considering countermeasures. That company is having a bitter experience with users hesitating

to buy its personal computers because of the MSX idea. NEC will probably

now unleash its real power, however. Fujitsu, which has feigned disinterest

up till now, has shaken the top home appliance makers with the introduction

of a cheap computer with a high-quality keyboard for 49,800 yen. This

is the mark of a company whose strength lies in semiconductor and computer

technologies.

But Matsushita Electric has a different aim in mind by selling the MSX:

the reeducation of its selling agents. That is, in order to gain

marketing capability in tune with the age of OA and new media, it is

necessary to transplant the knowledge of digital technology and digital

products, beginning with computers. Matsushita must reeducate its selling

agents, which have been selling refrigerators, color TV's, and VTR's up

till now, but it will not be easy to teach them the jargon, like BASIC

and OS for example. The company's plan is to let them enjoy selling

the easiest game-oriented personal computers first and then gradually

proceed with the up-to-date technological instruction. This is the socalled "intellectual make-over" of the 26,000-store string of national

selling agents. It is probably no exaggeration to say that if the

fundamentally strong selling agents are not galvanized for the stateof-the-art products, Matsushita itself will collapse as a matter of

course. The MSX is Matsushita's test case whether everything goes

according to plan or not.

Tie-Up With IBM, "Lucky" Or "Unlucky"?

The reason why Matsushita has had to start with the MSX as a foothold

in the computer area is because of its withdrawal from the field in 1964.

The reason for the withdrawal was that computers require a lot of capital

and it is difficult to get a return on investment over the short term.

On that score the judgment can only be regarded as having been excellent.

In fact, the country was in a recession in 1965 and Matsushita pulled

out of it quicker than most companies and accelerated its rate of growth.

But NEC president at that time, Koji Kobayashi, said: "I do not understand their pullout. Sure things are difficult now," but he predicted

that computers "will definitely develop into a huge business in the future."

This is a good example of not being able to understand history until

after a certain period of time has elapsed. In any event, Kobayshi

read the situation correctly.

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Of course Matsushita Electric did not just pull out of computers without

careful consideration. It left minicomputers and peripheral equipment

with Matsushita Communications so that the company would be able to

reenter the field at some time in the future when it was necessary.

This could be compared to the strategy of having one's strongest unit

to protect the army when it is retreating. A pullout, however, is a defeat

just the same. Without working on computers themselves, technology, like

that needed for peripheral equipment for example, is not fostered. The

same is true for minicomputers as well. Matsushita tried to arrange a

hook-up with the world's largest manufacturer of minicomputers, DEC, but

it did not pan out.

As a result Matsushita merged with Fujitsu in July 1973 and set up the

"Panafacom" Company. Matsushita figured it would somehow absorb computer

and digital technology from Fujitsu. For Fujitsu as well, the merger

had much to offer. Up till then most of its customers had been small

businesses and Fujitsu figured it would be able to get connected to

Japan's most prominent companies through Matsushita. Fujitsu's expectations

were met, but not Matsushita's. The technology was not absorbed as hoped.

It was said that Konosuke Matsushita worried about the situation and urged

his subordinates on. About 7 years after the merger, there were those

who thought that the joint company "should be dissolved" because the

initial goals would not be attained.

"Panafacom" continued thereafter, however, and in September 1983 the "FM

Information System," which planned to develop software, was established

by both companies and the existing bonds were strengthtned. It was like

a husband and wife who get back together after a bout with the 7-year

itch. But the cause could also be attributed to the appearance of

another "attractive offer." In the latter half of 1981, IBM Japan came

to Matsushita with the idea of a merger. Negotiations are still going

on today, but no settlement has been reached yet.

IBM Japan's aim is to acquire Matsushita's mass production and marketing

capabilities because it is beginning to target its computers for the

household market. There would also be the advantage of being able to

replace Matsushita computers, produced in the partnership with Fujitsu,

with IBM machines. On the other hand, if Matsushita were to shake on

an agreement with the world's giant computer manufacturer, Matsushita

would be able to obtain its technology and know-how and effectively

use its idle plants. It would also do much to curb Fujitsu's complaints.

At any rate, to get together with IBM Japan while in partnership with

Fujitsu would lack "integrity." So IBM's main office replaced IBM

Japan in the negotiations. The feeling was that public opinion would

recognize the propriety of a Matsushita tie-up with Fujitsu at home

and IBM abroad.

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The rationalist President Yamashita was not concerned about tie-ups with

both Fujitsu and IBM. He stated quite frankly that "if they are necessary

in this age of internationalization, the tie-ups are appropriate." It

seems that Konosuke Matsushita and those close to him, however, were concerned about "integrity." But IBM Japan is tempting Matsushita with production of the multistation "5550." There is also talk about the possibility of consigning production of the "PC Junior" to Matsushita as

well. As the personal computer favored to win the home market, its

preproduction popularity is quite high. But insiders say that because

the price for orders is quite harsh, Matsushita is dragging its feet.

There is also the ntion that the "king" would also be laboring as a

"subcontractor."

IBM chairman Opel, who came to Japan for a meeting of the entire IBM

board of directors at the end of October, announced at a press conference

that "a decision (on the joint company question) is imminent." It seems

that the time when Matsushita is going to hand down its final decision

is drawing near. Determining whether an agreement with IBM, which had

ensnared Hitachi in the spy incident, will be "lucky" or "unlucky,"

is very difficult to determine. Matsushita's main weapon is its mass

production technology that is the best in the world, but if it slips

up, the big shot will come to grief.

In Matsushita's tie-up with Phillips, a role reversal took place and

Matsushita became the prominent company because of its dramatic rate

of growth between 1955 and 1970. But with the large overseas companies

cautiously guarding against this, there is some doubt as to whether such

an international strategy could work again.

Furthermore, competition is several times tougher than before because

of the low rate of growth worldwide. In today's information-oriented

society, a company's costs for systems development and research development can get carried to enormous proportions if it is not careful.

Furthermore, it is said that we are entering an age when every market

will have a number one, and after that everyone from number two on down

will be nonexistent. This will happen not only in the electronics industry,

but will extend to almost every kind of business, financial and commercial.

More than anyone else Matsushita itself recognizes both its weaknesses

and strengths under the present circumstances. Therefore, "Action '86"

is perhaps Matsushita's tragic alias as it heads toward the 21st century.

The images of Hitachi and Fujitsu have suffered because of the IBM spy

incident. But both companies have foreseen the coming of the computer

and communications era since 1975 and they have staked the fate of their

companies on it. If they continue on a course of automonously developed

technology, various paths will open to them and their images will recover

as a matter of course.

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But for Matsushita Electric, which pulled back from the computer field

because of the large amount of capital needed and the predicted severity

of the competition, and which concentrated on its favorite area of home

appliances, the future will be a time of trials and tests because the

growth rate for horn appliances has leveled off.

Why Matsushita's Popularity Among Science And Engineering Students Is

Lacking

As Matsushita sees it, the Sharp Corporation has paid it little heed,

has been gradually transforming itself from a home appliance maker into

an electronics manufacturer, and is establishing a high-income structure

in semiconductors and personal computers. Instead of having an exhibit

at the World's Fair [nos pecified], Sharp built a research and development

institute and a factory in Tenri, Nara Prefecture and has been promoting

the development of electronics technology. It is an impressive goal in

terms of using capital effectively. But more than that both President

Akira Saeki and Vice President Tadashi Sasaki are highly regarded for

their ability to foresee the needs of the coming age. As before Sharp

will not participate in the 1985 Science Exposition, but will establish

a research institute in Kashiwa City, Chiba Prefecture where it intends

to work on the development of biotechnology-based new semiconductors.

This is a move that shows its desire to stay in the technological forefront.

On the other hand, what about Matsushita? Since he first assumed the

post of president, Yamashita has known that technology alone is the

basis for the company's existence in the future. Taking over as chief

of the technology headquarters, he has been issuing written appeals

to all concerned. Excellent goods, such as vacuum evaporation tape and

materials, are being produced, but software and systems technology are

still in the future and many difficulties lie in the way. One does

not have to look at the Hitachi IBM spy incident to know perfectly well

that software development requires much time and money. There are no

shortcuts. One must gather the people and capital. Money is not a

problem for a company as superior as Matsushita. It is a matter of whether

the right people can be acquired. Right now NEC is the most popular

company among science and engineering students. Hitachi may be stronger

in terms of overall capability, but it is behind NEC in popularity. The

difference lies in whether the company has a home appliance division or

not. That is, students will select NEC because there is the fear that

they might be placed in the home appliance division if they go to Hitachi.

Matsushita has consistently been ranked number five in terms of science

and engineering student popularity. This is not such a bad ranking, but,

as the example of NEC and Hitachi reveals, a company that does not work

in advanced fields will not be favored by students. And such a

tendency would surely have consequences.

President Reagan laments the lack of science and engineering students in

America. From the beginning the tendency has been to put the emphasis on

numerical strength, but in the upcoming technology wars a company's existence

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will be directly affected by both the quantity and quality of people

it can obtain. Of course, a copycat way of doing business and the reformoriented technology that sustains it will become less applicable in this

age.

General Electric, which lost to IBM in the computer war, is trying to

radically change its course. Chairman Welch indicates his company's

policy: "Using the compu.er as a tool is fine. Usint this tool, we

will take the lead in areas that others cannot imitate." GE will be

investing enormous amounts of money in the area of graphics over the

next 10 years or so. Graphics will be a powerful tool in developing

new materials and products for both military and public uses. Because

it feels this will become such a promising market, GE is targeting its

development efforts for the late 1980's and early 1990's.

This is the kind of dynamic strategic development that is typical of

a huge U.S. company. What are the prospects for the areas in which

Matsushita is involved? In both the OA, and now media areas, excessive

competition will be absolutely unavoidable because the computers,

communications, comprehensive electric machinery, and office equipment

manufacturers are all jostling for position in the market. OA is out

of the conceptual stage and about to enter the period of market formation.

But new media is still just in the vague blueprint stage. Even if a

manufacturer creates some demand, profitability will still be meager

and the business risky. Despite that, however, investment will become

increasingly more important.

International Strategy Displays Matsushita's Overall Strength

Matsushita's international strategy is to flex its overall strength. Its

first step overseas after the war was to set up the marketing company

Matsushita America (1959), but its earliest overseas production venture

came about 2 years later with a merger with a Thai company. In the early

1970's Matsushita started to turn from mergers toward 100-percent financing.

The purpose was not only to satisfy the domestic demand of the partner

country, but to export to the neighboring advanced nations, including

Japan. When moving into developing countries, Matsushita would begin

with the production of dry batteries first. This is a conventional step.

It is thought that a company cannot expand the market for other products

without first ensuring a source of electricity.

In the late 1970's the pace of the export-oriented moves into advanced

countries picked up in order to avoid aggravating international trade

frictions. Matsushita's aggressiveness stands out in bold contrast to

Toyota, which is this country's typical big company. For example, in 1974

Matsushita took over Quasar, the color TV division of Motorola which was

struggling due to the business slump in America at that time. This was

Matsushita's first production base in the world's largest market. Furthermore, as a large-scale business takeover, it was big news. Matsushita

felt it would be cheaper to take over an established company than to

build a new factory, but the facilities were too old. There were a host

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of unfavorable conditions, like low morale among the workers for example,

and it took some time to rebuild Quasar after the takeover. It finally

turned a profit 2 years ago. One reason for this may have been the

lack of background investigation, but it is also true that various problems

accompany the production of high-priced commodities, such as color TV's

and microwave ovens, in an advanced country like the United States.

A lot of effort in the area of production control was needed in order

to bring the products up to the domestic quality standard. The introduction of automation to rationalize production was neither welcomed by the

local authorities nor labor unions because of its effect upon area

employment. A lot of very strenuous efforts had to be made in order to

approach the Japanese level of productivity. In Matsushita's case,

therefore, a long-term effort was required to get things on the right

track.

The first thing President Yamashita did when he assumed office in 1977

was reorganize the overseas company foundation.

Because it took so long for Quasar to get back on its feet in America,

a review was made of the company's structure, including that of Matsushita

America. As a result of this review, Matsushita Electric was reorganzied

into three divisions, Panasonic Company, Quasar Company, and Matasushita

Electric Company. The first two are both marketing companies and the

latter one is in charge of manufacturing.

Next year will be the 25th anniversary of Matsushita America's founding

and on the principal strength of VTR sales, business results for the

first half of fiscal year 1983 are up over the same period for the previous year by a double-digit rate of increase. Income will be more than

expected as well. In early 1982, the industrial division, Panasonic

Industrial Company, was established. The favorable business results are

due to this. Both the marketing and manufacturing arms of the company

have been striving diligently to attain the targeted production control

level and as a result Matsushita Electric is ready to top the previous

rate of growth and enter a new age of prosperity. President Keiichi

Takeoka proudly points out that "this year's sales will certainly hit

the $2.5 billion mark."

In Southeast Asia the quality of work is high and the number of companies

moving into Singapore, which has been encouraging investment from abroad,

is remarkable. In addition to the 1972 establishment of Matsushita Reiki

Company of Singapore, which produces refrigerator compressors, five

companies were subsequently established in Singapore between 1977 and 1978.

They are Matsushita Wireless Equipment Company of Singapore, Matsushita

Precision Motor Manufacturing Company of Singapore, Matsushita Electronic

Parts Company of Singapore, Matsushita Electronics Company of Singapore,

and Matsushita Technical Center of Singapore. All five were established

for the purpose of exporting, especially the company which produces the

compressors used in refrigerators. Its facilities are being upgraded

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annually with the aim of exporting to Japan. The characteristic of each

company in the Matsushita group, such as Reiki, Matsushita Kyushu, and

Matsushita Tlectronic Parts, is the upgrading of its technological

capability.

With respect to Europe, Matsushita established new companies in Belgium

in 1970 (dry batteries), in Spain in 1973 (vacuum cleaners, industrialuse heating and cooling equipment), and in England in 1974 (color TV's).

It merged with the West German company, Bosch, to form "MB Video"

(Matsushita 65 percent) in order to counteract the international trade

controversy over VTR's. Matsushita's plan is to use these companies

as bases for supplying the European community with the various

commodities.

The marketing companies, which total 34, are very proud of their range

of products. Matsushita is also Japan's biggest international manufacturing

company in terms of overseas investment. Two years ago the Matsushita

group topped the 1 trillion yen mark in exports. That is nothing for

an all-around trading company, but one does not see such performance from

companies whose production is restricted to a single area, like home

appliances.

By promoting marketing and manufacturing integration, Matsushita will

be developing an even more diverse overseas strategy for the future.

One of the strategies is to tie-up and cooperate with powerful overseas

companies.

President Yamashita emphasizes the importance of having a good partner

relationships: "There is a limit to the strength of Matsushita Electric,

so, whether we like it or not, mergers with other companies are necessary.

And a relationship in which Matsushita alone profits will not last long."

In the past Matsushita has not been enthusiastic about supplying merchandise with its partner's brand name (OEM [original equipment manufacturer])

because, quite naturally, it wanted to preserve the high added value of

itsown mark. Lately, however, Matsushita has not been concerned. It

is supplying its rival, RCA, with VTR's and GE with the components for

microwave ovens.

The competition has become fierce. One reason for not sticking with the

idea of keeping its own brand name is that Matsushita cannot coordinate

quantity and exercise its strength in mass production technology if it

does so. Another reason is that Matsushita is following the spirit of

"coexistence and mutual prosperity," that is, help wherever you can help,

even if it is a rival company.

In the same vein, if Matsushita provides more foreign companies with

production technology and business know-how, thenumber of companies which

actually come under the "Matsushita umbrella" will increase through the

so-called "transfer of technology."

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Among the related companies, 12 are listed on the stock exchange: 9 in

the first division and 3 in the second. Most of these are excellent

firms not inferior to the parent company Matsushita Electric.

In addition to Matsushita Electric there are currently 83 associated

companies, 79 at home and 4 abroad. In fiscal year 1982 combined sales

were 3,649,000,000 yen and overall profits totaled 157.1 billion yen.

In fiscal year 1983 sales are expected to rise by 5 percent to 3,846,600,000

yen and overall profits by 6.7 percent to 167.7 billion yen. The

strength of the Matsushita group is clearly apparent when one notes that

the consolidated 4.3 percent rate of increase in profits for 1982 exceeds

the independent 3.9 percent rate of increase for Matsushita Electric.

The related companies of Matsushita Electric can be generally divided

into three groups. The first group is comprised of the production divisions

of Matsushita Electric and those companies newly established for work on

new objectives. The second group is made up of the traditional subcontracting firms and suppliers who were reorganized and incorporated

into the group. Third are those companies who were in trouble and

incorporated into the group at their own request. Of course, this highpowered overseas strategy is in line with the basic business theory of

Konosuke Matsushita as well.

In any event, during the next 3 years Matsushita Electric will be trying

to review and transform all the aspects of its business organization,

such as its technological development, the operation of its division

system, its overseas strategy, and its marketing structure, and get

away from its image as "home appliance Matsushita." Then at that time

it will have been transformed from the original "Matsushita shop" of

the "god of business" into an all-around electronics manufacturer in both

name and reality. Much depends upon how far the "big revolution" of

"Action '86" can go. It is thought that 1986, when this mid-term plan

is scheduled to end, will be the time when President Yamashita passes

the baton to his successor, but many people, at home and abroad, are

more interested in how the Matsushita group will flex its home appliancebased overall strength during the transition.

Matsushita's Strength Is Its Related Companies' Strength

[This section by journalist Ikutoshi Takano]

The Matsushita group is a mammoth group comprised of 446 firms, 368 domestic

and 78 overseas, with the Matsushita Electric Industrial Company at its

center.

The divisions of Matsushita Electric that constitute companies are

called branch companies. There are eight in all: Matsushita Electric

Works, Matsushita Electronics, Matsushita Communications, Matsushita

Electronic Parts, Matsushita Industrial Machinery, Matsushita Battery,

Matsushita Air Conditioning, and Matsushita Technical Research Center.

The employees of these eight are hired as Matsushita Electric personnel

and then placed by the company. They receive the same treatment as

Matsushita Electric employees.

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Matsushita Seiko [Precision Manufacturing] and Matsushita Reiki [Cooling

Machinery] are examples of the second type, reorganized subcontractors

or suppliers. Finally, Victor Company of Japan and Miyata Industrial

are examples of companies whose business slumped and were incorporated

into the Matsushita group.

While following an autonomous path of operation, these related companies

are tied to Matsushita Electric by the idea of coexistence and mutual

prosperity. That is, while cooperating with each other, as a group they

make up one of Japan's leading electronics manufacturers.

Let's look at some of the distinctive companies within the Matsushita

group to try and find where its strength lies.

Matsushita Electric Works

This is the most powerful company in the Matsushita group. Its wiring

apparatus holds an overwhelming share of that market. With 23.95 billion

yen in capital and 12,900 employees, it is the largest of the related

companies.

This company originally spun off from the Wiring Apparatus Division of

Matsushita Electric and became an independent branch company in 1935.

Because Matsushita Electric is a company that got its start from the

manufacture of wiring apparatus, the employees are proud of the fact

that "our company is the source of the Matsushita group." It would be

more appropriate to call it a sister company rather than a subsidiary.

As an elder of the Matsushita group and Konosuke Matsushita's right-hand

man, Chairman Seiji Tanba leads the Matsushita group overall.

Using the slogan "making homes in a new way," this company has been making

progress in the area of housing since 1964. Today 40 percent of its

sales are in housing-related goods, such as baths, toilets, doors,

and building materials. It is the largest builder of complete homes in

Japan.

Havint come this far as an integrated housing manufacturer, the company

is trying to change directions radically. Because of the business slump

during the past few years, the number of houses being built has steadily

declined. For this reason, Matsushita Electric Works has been further

strengthening its position in the home-renovation market. At the same

time, it has seriously gotten into the area of FA and HA. In 1982

the company established the Equipment Development Research Institute in

order to develop FA and HA equipment. The whole company is working in

this area.

In the area of FA, the company is working on the production of systems

for production control and factory environment control. In order to make

the control components that support these systems intelligent, Matsushita

Electric Works is investing much of its energy into developing intelligent

control components and a production control system.

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For HA, the company is making further progress in the combined area of

"electro-construction" which it has developed up till now. At the present

time, Matsushita Electric Works is putting a lot of effort into securityrelated equipment (burglar and fire alarm systems). In tandem with

Matsushita Electric, this company will undoubtedly be a top company in

the area of HA. Its future looks bright.

Victor Company of Japan

Among all the companies in the Matsushita group, Victor Company of Japan

is the one that is most atypical. The VHS-format VTR, which accounts

for almost 68 percent of the company's sales, was developed by Victor

in 1976. Therefore, Victor contributes greatly to Matsushita's video

equipment sales, which accounted for 28.4 percent of its 2,473,500,000

yen in total sales for 1982.

Without the VHS-format VTR, the world reknown Matsushita Electric Company

would most likely be just an ordinary home appliance maker today. As

a result of Victor's development of the VHS-format VTR and its efforts

to popularize it together with the parent company, 80 percent of the VTR's

are VHS-format.

Victor has been known for its technological capability for a long time.

A former vice president, Kenjiro Koyanagi, was the first in the world

to invent the Braun tube-model TV of today. He is respected throughout

the world as the "father of TV." In 1940, he sold the first purely

home-manufactured television in Japan.

In this sense, it would not be strange to call Managing Director Shizuo

Takano the "father of video." He is known in Europe as "Mr Video."

Victor Company of Japan not only supplied France's Thomson-Brandt with

video technology, it also merged with both West Germany's Telefunken and

England's Sonh-EMI to form companies. It is, therefore, also involved

in the on-site production of VHS-format VTR's.

This company is also cultivating the next-generation successful commodity

by developing the VHD-format video disk. Home appliance makers have

high hopes for it and expect it to succeed the VTR.

Victor employees have a lot of confidence in their company's technological capability, so the tendency for them to view Matsushita Electric

as a competitive partner rather than the parent company is quite strong.

The current chairman, Kokichi Matsuno, is from Matsushita Electric, but

the president, Ichiro Shindo is a company man. After Matsuno retires,

it is thought that executives will no longer be sent from Matsushita

Electric.

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In order to make further progress beyond the VHS-format VTR and VDH

video disk, Victor intends to become a comprehensive information equipment

manufacturer by combining its video and information technologies and

competing with Matsushita Electric in the same area.

Matsushita Electronics Industrial Company

At the end of December 1982 this company showed reduced income and profits

for the first time. Sales were down 90 percent over the previous period

of 202.3 billion yen and working profits were down 80 percent to 27.5

billion yen. The reason was that Braun tube exports were down, the demand

for picture tubes was down, and the demand for discreet components in

the semiconductor field, such as transistors, did not increase.

As the manufacturer of electron tubes, semiconductors, and Braun tubes,

it is the second largest company in the Matsushita group behind Matsushita

Electric Works in terms of capital.

The history of this company's beginning is a well-known story. It was

established in a 1952 merger with the Dutch company, Phillips. Since

all the stock was owned by the two companies, Matsushita 65 percent and

Phillips 35 percent, the company was not listed on the stock exchange.

Furthermore, all the employees came from Matsushita Electric.

It was after the war when the merger took place. Since Japan was a

defeated nation, it was treated as a third-class country. Matsushita

was forced into an insulting arrangement in which Phillips became a

major stockholder by theoretically providing the company with 35 percent

financing in theform of technical assistance money. In fact, Phillips

did not spend one "sen."

The future of Matsushita Electronics is very promising, however. It is

said that electronics will usher in the "second industrial revolution";

it is on the leading edge of the technological revolution of the age.

And Matsushita Electronics is situated right in the middle of the

electronics area. It is for this reason that President Miyoshi says that

Matsushita Electronics has grown to the point where "one cannot talk

about Matsushita Electric without mentioning our name."

In order to develop the semiconductor industry further, in 1983, Matsushita

Electronics had, for the first time since its inception, appropriated

35 billion yen for investment in facilities and equipment. Thirty billion

yen of that amount is semiconductor-related.

The company is constructing a new 3-story 10,000-square meter plant next

to its Arai VLSI office. It could be completed by next year at the earliest.

Matsushita Electronics expects to get into LSI production—standard logic,

microcomputers, and the digital memory area—during 1984.

99
Matsushita Electronic Parts CompanyAs the name indicates, this company manufactures and markets various

types of electronic components. As the company in charge of producing

mostly active components of semiconductors, it is also a competitive

partner to Matsushita Electric Works.

It is a fairly young company having spun off from Matsushita's Components

Division in 1976 to become a branch company. In this age of "ultralight,

then, miniature" components, however, Matsushita Electronic Parts Company's

production is not limited to just electronic equipment for common use.

Because it is also making great strides in the systemization of electronic

components for use in cars and industrial machinery, this is one of the

promising companies within the Matsushita group. And much is expected

of it.

It is often said of Matsushita Electric that it is a company whose forte

is the manufacture of complete goods, from components on up.

Fifty percent of its electronic components go to the Matsushita group.

With 30 percent going to other domestic manufacturers and 20 percent

exported, a very high percentage of its supplies go to other makers.

At the present time the percentage of its supplies going to the Matsushita

group has dropped to about 40 percent, but the company is trying to raise

this to 80 percent. One of the secrets for the continued success of

Matsushita Electric is "Matsushita's strength in components."

In the summer of 1983, the company carried out the biggest reorganization

of its system since its inception. It was the first step toward "creating

an organization that can cope with the developments of the next generation"

(President Kuninobu). Related goods were gathered and integrated into

a heqdquarters and bold innovations were left to the next-generation

managers. Specifically, a system of three headquarters was established:

1) the Structural Components Headquarters; 2) the Circuit Components

Headquarters; and 3) the Systems Products Headquarters.

This company will adopt the time-honored division system of Matsushita

Electric for its electronic components. Its aim is to become a second

Matsushita Electric by delegating authority, which is typical of

President Kuninobu.

Matsushita Graphic Communication Systems, Inc.

This company is proud of the fact that it has been the world's only

exclusive manufacturer of facsimile equipment during its 50-year history.

This company is the offspring of the technical research institute of Domei

Telecommunication Inc. It would not be an exaggeration to say that the

Matsushita Graphic Communication Systems, Inc has been at the center of

Japan's information industry since the time it was still being used by

the newspapers and government exclusively.

100
Since control of the company was transferred from Matsushita Electric

in 1962, it has become the world's top maker of facsimile equipment under

the administration of Chairman Yoshiro Omori and President Kino. Omori

used the occasionof his 80th birthday this February to retire, however,

and President Kino became chairman. Vice President Toshihachiro Yao,

who dealt with ventilation fans for 10 years at Matsushita Seiko, became

the new president.

The next target for Matsushita Graphic Communications Systems, Inc is

to become the top maker of 0A systems.

As soon as he took office, President Yao stated: "Today facsimile equipment transmits texts and pictures almost as fast as they are produced.

Besides being used in this way in the future, the demand for them as 0A

systems equipment in a computer network will increase dramatically. For

this reason, we want to get away from theimage of facsimile machines

as being designed just for the Graphic Communication System of facsimiles;

they should be looked at more as the Graphic Communication System of

OA systems."

This is the pillar of the Matsushita group's OA strategy and, as its

linchpin, this company is playing a very important role in its execution.

Matsushita Transmission established an OA systems research institute

in 1981. In addition to this, in early 1982 it created the OA Systems

Division and unified the production, research, and business divisions.

The company will upt a 3-year plan into effect in 1984. The goal is to

reach 120 billion yen in sales by 1986. The entire company is hustling

to attain this target.

By that time, 1986, Matsushita Transmission will next be getting into

the HA field as well. Undoubtedly very close intragroup teamwork between

Matsushita Transmission, Matsushita Electric Works, and Matsushita

Electric will come into play for this.

Matsushita Electric Company Of Kyushu

The Matsushita group are planets of the Solar System with Matsushita

Electric as the sun. The common brand name, marketing network that

is spread throughout the world, and joint development in the research

field receive the sun's rays and energy. Each of them revolves around

Matsushita Electric like the planets around the sun.

Among the companies of the Matsushita group, Matsushita Kyushu has been

firmly wedded to the business theory of Konosuke Matsushita and it has

steadily grown to become the mini-Matsushita of Kyushu.

If Matsushita Judenshi below is Matsushita's headquarters in Shikoku,

then this company can be called its headquarters in Kyushu. In 1955,

requests came from influential quarters of the area that the idle

101
facilities of the Japan Rubber Company be used and Matsushita took this

opportunity to establish a company there. In this sense the company's

existence is very unique in comparison to the other subsidiaries of

Matsushita Electric.

Matsushita Kyushu's history was one of successive difficulties.

It had 100 million yen in capital when it was founded and 12 young staff

members were sent from the parent company to work on factory renovation.

Due to continued investments, the accumulated red ink reached 300 million

yen in 1959. Dividends were distributed for the first time in 1962.

The company was so constitutionally weak it was said that "in the past

if Matsushita Electric sneezed, Matsushita Kyushu would catch cold!"

But in 1971, President Aonuma, who took a company that started with nothing

and turned it into one of Kyushu's most prominent businesses with a zero

debt, was praised by local people as being "the Konosuke Matsushita of

Kyushu."

Matsushita Kyushu manufactures such a wide variety of products—from

small color TV's, radios, and stereos up to electronic components—that

it is called a mini-Matsushita. The company is especially proud of its

magnetic head which is number one in the world.

The areas which Matsushita Kyushu will be emphasizing in the future are

"mechatronics," such as magnetic heads and assembly robots, OA equipment,

such as word processors, and information equipment focusing on telephone

terminal equipment. Furthermore, it will be working on "aquanics" and

health equipment, which attempts to use water effectively through

electronics.

Matsushita Kyushu is a company that has firmly taken root in Kyushu as

a thoroughly local industry. It is currently putting all its efforts

into "strengthening its development system," for that future time when

it will fly from Kyushu to the rest of the world.

Matsushita Judenshi Industrial Company

This company's income comes mainly from export-oriented VTR's, but one

cannot talk about Matsushita Judenshi without mentioning its infrared

kotatsu [portable feet warmers the size of a small card table].

The forerunner of Matsushita Judenshi is Kotobuki Electric Works which

was founded by Judenshi's current president, Inai. President Inai

himself established Kotobuki Electric Works in order to manufacture and

market infrared kotatsus, but in 1969 it merged with the Matsushita

Electric Company-related Kotobuki Denki [electric equipment] Company

and Kotobuki Rokuonki [recording equipment] Company to form the present

company.

102
Although Matsushita Electric currently owns 59.6 percent of Judenshi's

stock, President Inai, who is the actual owner, has complete authority.

The name [Kotobuki] Electric Works, therefore, signifies something quite

different from what is meant by [Matsushita] Electric Works and it

possesses a peculiar status within the Matsushita group.

Matsushita Judenshi independently manufactures the infrared kotatsu that

President Inai developed in toto, from development to production.

Matsushita Electric takes care of marketing only. Furthermore,

Matsushita Judenshi divides production responsibilities with various

Matsushita Electric divisions for the manufacture of small 13-inch and

16-inch color TV's for domestic use and export-oriented tape recorders

and VTR's.

The export-oriented VTR's are this company's largest source of income.

They are supplied by Judenshi as the OEM to GE, Magnavox, Sylvania,

Panasonic of Matsushita America, and Quasar.

Because VTR sales were so strong, the figures for the fiscal year ending

November 1983 were greatly revised upward. The sales figures were

adjusted upward by 10 billion yen to 250 billion yen and the figures for

profits after taxes were 10 billion yen, an upward revision of 800 million

yen.

Matsushita Reiki Cooling Machinery Company

Among all the companies in the Matsushita group, this company is in

charge of manufacturing those items that are most closely connected to

everyday life: refrigerators, freezers, and air conditioners.

Because its main product, refrigerators, has a diffusion rate of almost

100 percent, the company is working on how to get people to switch to

domestic products when it comes time to replace their current machine.

Domestic sales of refrigerators peaked in 1979 at 4.5 million units.

In 1981 and 1982 this fell to 3.6 million units. Since this year is

about the time when those people who purchased refrigerators in 1973 will

be replacing them, Matsushita Reiki is expecting demand to run at 3.7

million units this year. Nevertheless, in contrast to something like

VTR's for example, demand will tend to continue at present levels and

inevitably business will be difficult.

Because of this, Matsushita Reiki has been trying to cut expenses by reducing

material costs and inventory. At the same time, it has been cultivating

the demand for new products by, for example, adding space to its 2-door

model for a vegetable crisper and being the first to market a 3-door type

refrigerator. It has also made the traditional white model more colorful,

adding red, yellow, and blue colors.

103
As a result of these aggressive marketing tactics, refrigerator sales

have been averaging an annual rate of increase of 5 percent, and for the

first half of 1983 sales increased by 7 percent to just under 41.3 billion

yen.

The majority of companies in the Matsushita group are working in the very

promising field of electronics. But no matter which of this company's

manufactures one looks at—refrigerators, compressors, or air conditioners—

they are all mature commodities. At best, therefore, Matsushita Reiki

cannot expect a very high rate of growth from now on.

This company's forerunner was Nakagawa Machinery Company which produced

construction machinery, so this company is manufacturing highly efficient

equipment such as automatic machinery and robot machines. By combining

the precision component technology it possesses with work on the

development of FA equipment, new paths leading to the company's survival

will open.

Matsushita Seiko Precision Manufacturing Company

Similar to Matsushita Reiki, business has been difficult these past few

years. This company is an all-around manufacturer and marketer of household fans, ventilation fans, and air conditioners. Sales peaked in 1980

at 85.5 billion yen and have been declining each year since then.

Due to the heat wave during the summer of 1983, the demand for fans and

air conditioners recovered and the company had an increase in operating

profits for the first time in 4 years. Nevertheless, as before the

prospects for the future are not good.

Having already recognized the energy revolution, Matsushita Seiko has

been first in putting solar houses to practical use in the industry

and it has established a system to provide for their dissemination.

The company has been further preparing for the future by developing

Japan's largest propeller-type wind-driven power device for Nippon

Telephone and Telegraph [NTT] and by providing Oshima Island with a

radio relay station.

However, because it will take some time before solar houses become commonly

used for residences, Matsushita is looking for [ways to speed up the

distribution].

Matsushita Communications Industrial Company

This company spun off from Matsushita Electric's Communications Equipment

Division in 1958 to become a branch company. It became a 100 billion

yen company in 1978, the 20th anniversary of its establishment. By

1982 it had grown to the point where sales doubled to 220.68 billion yen.

104
Principal Related Companies of Matsushita Electric No 1

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105
Key:

1. Name of Company (Main Office . Capital . Established . Employees)

2. Representative

3. Executives

4. Percentage of Stock Held by Matsushita Electric

5. Principal Business

6. Matsushita Electronics Industrial Company

Takatsuki City, Osaka Prefecture

21 Billion Yen

10 December 1952

9,500 People

7. Seiji Miyoshi

8. Names from Left to Right. (C) = Chairman, (P) = President,

(VP) = Vice President, (E) = Executive Director, (M) = Managing

Director, (D) = Director, (PI) = Permanent Inspector, (I) = Inspector

(C) Seiji Matsushita (P)Seiji Miyoshi (VP)Kakuichiro Hosokoshi

(VP)Kazuo Fujimoto (VP) Taro Ishibashi (E) Shinya Uemura

(E)Shin Ida (E)Hisanobu Nakanishi (E)Hiroyuki Mizuno (E)Hinomaru

Fujio (E)Hisakazu Omoto (D)Konosuke Matsushita (D)Akira Harada

(D)Chikayoshi Ninagawa (D)Kozo Ohashi (D)Hiroo Watanabe (D)Yasuhiko

Yamaguchi (D)Tomisaburo Okumura (D)Shunzo Ooyabu (D)Yoshitomo

Kobayashi (D)Mikio Nishikawa (PI)Hiroshi Saeki (I)Seiji Hino

9. Manufacture and marketing of electron tubes, semiconductors, and

Braun tubes.

10. Matsushita Communications Industrial Company

Kohoku-ku, Yokohama City

7.854 Billion Yen

17 January 1958

5,700 People

11. Akisada Ogama

12. (C)Seiji Matsushita (P)Akisada Ogama (M)Koei Koroiwa (M)Mototatsu

Maruo (M)Hiroshi Tanaka (E)Shigeru Kawahara (E)Hajime Karatsu

(E)TakuKishi (D)Konosuke Matsushita (D)Toshihiko Yamashita

(D)Yoshio Asada (D)Mitsuo Nakai (D)Kazuhiko Sotoyama (D)Yoshinari

Miyakomaru (D)Hajime Nakao (D)Eiji Ishizawa (D)Tatsuo Yoshiyama

(D)Minoru Yoshida (PI)Kanetoshi Yamada (I)Seiji Hino (I)Mitsuo

Tsuruta (I)Shojiro Itakura

13. Manufacture and marketing of information and communications equipment,

instrumentation and control equipment, audio and video equipment,

office equipment.

14. Matsushita Electronic Parts Company

Kadoma City, Osaka Prefecture

12.55 Billion Yen

19 January 1976

10,000 People

15. Taro Kuninobu

106
16. (C)Taro Kuninobu (VP)Yoshio Iida (VP)Fumio Kobayashi

(M)Ippei Nakayama (M)Yoshimasa Suehiro (M)So Sugii

(M)Shoji Asai (E)Katsumi Ichikawa (E)Yoshio Yamamoto

(D)Toshihiko Yamashita (D)Yoshio Asada (D)Masao Takeyoshi

(D)Mitsuo Shishido (D)Hideo Mifune (D)Isamu Masuyama

(D)Jiro Isono (D)Tadao Aoki (Pl)Shohei Yamamoto (I)Seiji

Hino (I)Hajime Suzuki

17. Manufacture and marketing of various types of electronic

components.

18. Matsushita Housing Machinery Company

Yamato-Koriyama City, Nara Prefecture

6 Billion Yen

17 January 1977

3,800 People

19. Morimasa Ogawa

20. (C)Morimasa Ogawa (M)Kazuo Iga (E)Toru Takiguchi

(E)Kazusuke Ozeki (D)Seiji Matsushita (D)Toshihiko Yamashita

(D)Yoshio Asada (D)Kazunori Ueda (D)Minoru Hayama

(D)Hiroo Takagi (D)Tadashi Saito (D)Rei Kikuchi

(PI)Tomoyoshi Itabashi (I)Seiji Hino (I(Hajime Suzuki

21. Manufacture and marketing of microwave ovens, heating

equipment, solar, gas, and oil apparatus

22. Matsushita Industrial Machinery Company

Toyonaka City, Osaka Prefecture

3 Billion Yen

17 January 1977

1,300 People

23. Fumio Kanazawa

24. (C)Fumio Kanazawa (E)Tadashi Yamada (E)Kazuma Danjo

(E)Kazuo Takimoto (D)Seiji Matsushita (D)Yoshio Asada

(D)Shigeru Hayakawa (D)Mitsuyoshi Munemoto (D)Takuaki Kanada

(D)Eizo Asakura (Pl)Shoji Oi (I)Seiji Hino

(I)Hajime Suzuki

25. Manufacture and marketing of various types of industrial machinery.

107
Principal Related Companies of Matsushita Electric No 2

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108
Key:

1. Name of Company (Main Office . Capital . Established . Employees)

2. Representative

3. Executives

4. Percentage of Stock Held by Matsushita Electric

5. Principal Business

6. Matsushita Battery Industrial Company

Noriguchi City, Osaka Prefecture

10.5 Billion Yen

16 January 1979

3,000 People

7. Kunitoku Azuma

8. [Names from Left to Right (C) = Chairman, (P) = President,

(VP) = Vice President, (E) = Executive Director, (M) = Managing

Director, (D) = Director, (PI) = Permanent Inspector, (I) = Inspector,

(CS) = Counselor]

(P)Kunitoku Azuma (M)Masao Funabashi (E)Hideo Takenaka

(E)Toyoteru Kurata (D)Toshihiko Yamashita (D)Minoru Yoshinaka

(D)Miyoji Nakai (D)Koji Tukuoka (D)Yukio Hama

(D)Hiromichi Ogawa (Pl)Isamu Asano (I)Shohei Yamamoto

(I)Hajime Suzuki

9. Manufacture and marketing of various types of batteries and

equipment using batteries.

10. Matsushita Electric Trading Company

Minami-ku, Osaka

5,412,000,000 Yen

20 August 1935

1,300 People

11. Kyutaro Isomura

12. (C)Shozo Iimura (PIKyutaro Isomura (VP)Takasumi Fujii

(M)Hisakazu Sakaguchi (M)Takao Mizutani (E)Hideo Miyake

(E)Yoshio Nakada (E)Shoichi Oazki (E)Hajime Hayashi

(E)Toshimi Toyota (D)Seiji Matsushita (D)Toshihiko Yamashita

(D)Eizo Fujio (D)Masayuki Iwasaki (D)Saburo Maruta

(D)Jun Seki (D)Tomisaburo Tatsumi (D)Takahisa Suzuki

(D)Shoichiro Koyama (D)Toshiyuki Fuse (D)Akihisa Imura

(CS)Kotaro Takahashi (PI)Hirao Nakamura (I)Seiji Hino

(I)Toshizo Funaki

13. Trade. In charge of the Matsushita group Export Division.

14. Matsushita Pveiki [Cooling Machinery] Company

Higashi-Osaka City, Osaka Prefecture

7,853,000,000 Yen

12 February 1939

5,100 People

15. Setsuo Aoki

109
Key [continued]:

16. (C)Toshiharu Nakagawa (P)Setsuo Aoki (E)Norio Fujiwara

(E)Akira Yamamoto (E)Kiyoshi Izumi (D)Konosuke Matsushita

(D)Seiji Matsushita (D)Toshihiko Yamashita (D)Yasuyuki Kitaura

(D)Tsuneaki Ueda (D)Toshio Konya (D)Kimio Hikita

(D)Takeshi Matoba (D)Takaski Takino (Pl)Sadayuki Tamura

(I)Seiji Hino (I)Jikei Okamura

17. Name changed from Nakagawa Electric Company. Manufacture and

marketing of refrigerators, air conditioners, vending machines.

18. Matsushita Electric Works

Kadoma City, Osaka Prefecture

23,952,000,000 Yen

26 December 1935

12,600 People

19. Iku Kobayashi

20. (C)Seiji Tanba (P)Iku Kobayashi (VP)Sadao Fujii

(VP)Kihachiro Miyata (M)Jun Matsumoto (M)Toshio Miyoshi

(E)Shichiro Tani (-E)Toshiya Arakida (E) Ichiro Endo

(E)Takeo Munemasa (E)Hiroshi Oshima (D)Seiji Matsushita

(D)Minoru Nishio (D)Shoichi Kitamura (D)Koji Mekage

(D)Yasutaro Ohara (D)Yoshikazu Yamada (D)Bunzo Yoshikawa

(D)Yoshimi Shinzen (D)Suchiro Tanno (CS)Konosuke Matsushita

(PI)Toshikatsu Hase (I)Taro Kadokawa (I)Shigeo Yamashita

21. Matsushita Electric sister company; manufacture of wiring apparatus,

parametrons.

22. Miyata Industrial Company

Chigasaki City, Kanagawa Prefecture

1.32 Billion Yen

30 January 1934

800 People

23. Masakuni Kurosaka

24. (P)Masakuni Kurosaka (M)Asao Miyata (E)Yoshihisa Yamaguchi

(E)Shinichiro Izawa (D)Kenji Kobayashi (D)Kyoyu Horimoto

(D)Yasushi Ozaki (D)Hideaki Horii (I)Kikuo Narikawa

(I)Hazime Suzuki (I)Teruhiko Miyata

25. Manufacture and marketing of bicycles, fire extinguishers,

fire extinguishing devices. Ranked second in bicycle industry.

110
Principal Related Companies of Matsushita Electric No 3

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111
Key:

1. Name of Company (Main Office . Capital . Established . Employees)

2. Representative

3. Executives

4. Percentage of Stock Held by Matsushita Electric

5. Principal Business

6. Victor Company of Japan

Chuo-ku, Tokyo

10,415,000,000 Yen

13 September 1927

10,200 People

7. Ichiro Shindo

8. [Names from Left to Right. (C) = Chairman, (P) = President,

(VP) = Vice President, (E) = Executive Director, (M) = Managing

Director, (D) = Director, (PI) = Permanent Inspector, (I) = Inspector,

(CS) = Counselor]

(C)Kokichi Matsuno (P)Ichiro Shindo (M)Toshio Watanabe

(M)Masahiko Hirata (M)Toshiya Inoue (M)Kunio Kakigi

(M)Shizuo Takano (E)Shigeru Shibuya (E)Satoru Tomita

(D)Fumio Uchida (D)Saburo Watanabe (D)Katsuya Ebuchi

(D)Ichizo Taguchi (D)Masao Ishii (D)Yasuichiro Tanba

(D)Hitoshi Aoike (D)Toshimaru Kitamura (D)Saichiro Hozaki

(I)Kotaro Takakashi (PI)Hirobumi Tokumitsu (PI)Kokichi Tomamaichi

9. Manufacture and marketing of audio and video equipment such

as video cameras, TV's, radios, stereos, recorders. A

comprehensive manufacturer.

10. Matsushita Electric Company of Kyushu

Hakata-ku, Fukuoka City

5,966,000,000 Yen

24 December 1955

4,000 People

11. Hiroji Aonuma

12. (C)Kotaro Takahashi (P)Hiroji Aonuma (VP)Isamu Motomori

(M)Takeo Hori (M)Akihiko Kawai (M)Keiichi Kurita

(E)Tora Kakuchi (E)Masataka Kono (D)Seiji Matsushita

(D)Toshihiko Yamashita (D)Michio Hirai (D)Akira Sato

(D)Nobutoshi Yamagata (D)Akira Fujio (D)Sumio Nori

(PI)Toshisada Kamitsuji (I)Seiji Hino (I)Seiji Tanaba

(I)Toshiki Hatano (CS)Konosuke Matsushita

13. Production of "mechatronics," "aquanics," health equipment,

office equipment, information-related equipment, dumber 1

comprehensive home appliance maker in Kyushu.

14. Matsushita Seiko [Precision Manufacturing] Company

Joto-ku, Osaka

8,591,000,000 Yen

15 May 1956

2,000 People

15. Shigesaburo Nagai

112
Key [cont inued]:

16. (C)Kotaro Takahashi (P)Shigesaburo Nagai (VP)Tadao Matsuda

(M)Keitaro Suzuki (M)Hirotoshi Otani (E)Tadashi Koshinaka

(D)Seiji Matsushita (D)Toshihiko Yamashita (D)Kyo Nishikiori

(D)Yuji Masaki (D)Masaya Matsuyoshi (D)Shoichi Suzuki

(D)Mitsuo Nishihara (D)Takeshi Yadera (D)Yoshihiro Yamada

(Pl)Seizo Otogawa (I)Hiroshi Nakanishi (I)Seiji Hino

(CS)Konosuke Matsushita

17. In charge of air conditioner and fans, ventilation fans, etc.

18. Matsushita Transmission Company

Meguro-ku, Tokyo

1.5 Billion Yen

1 November 1945

1,400 People

19. Toshihachiro Yao

20. (C)Chikayuki Kino (P)Toshihachiro Yao (VP)Isao Mori

(M)Masao Igawa (M)Masaru Ono (M)Shoichi Watanabe

(E)Junichiro Sugiura (E)Tsuneo Sato (E)Akira Yamaoto

(E)Yoshiaki Date (E)Mamoru Matsumoto (D)Keiichi Tonoki

(D)Susumu Shirozane (D)Takeji Watanabe (D)Shunkichi Shirosaka

(D)Akisada Ogama (D)Mitsuo Tsuruta (D)Mitsuo Nakai

(D)Kazuo Yasuki (D)Yutaka Tanaka (D)Masakatsu Tanaka

(d2Toshiharu Hamochi (CS)Kichigoro Omori (PI)Torao Shintomi

(I)Shigemitsu Funaki (I)Seiji Hino (CS)Konosuke Matsushita

21. Top maker of facsimile transmission equipment. Involved in

aggressive technological development.

22. Matsushita Judenshi Kogyo [Lifetime Electronics Industrial] Company

Takamatsu City, Kagawa Prefecture

7,188,000,000 Yen

21 November 1969

4,700 People

23. Takayoshi Inai

24. (P)Takayoshi Inai (M)Shozo Nakano (E)Shigeru Amano

(E)Manzo Uranishi (e)Kenzo Kida (D)Seiji Matsushita

(D)Toshihiko Yamashita (D)Yoshiki Yamashita (D)Takashi Honjo

(D)Tatsuo Ito (D)Tomio Maeda (D)Masaaki Miyagawa

(CS)Konosuke Matsushita (PI)Toshiaki Hattori (I)Seiji Hino

(I)Tsuneo Sekien (I)Tomio Ida

25. Manufacturer of video equipment, video cameras, color TV's,

tape recorders, kotatsus ^portable foot warmers]. Color TV's,

tape recorders, and kotatsus are the 3 main products.

113
Principal Related Companies of Matsushita Electric No 4

1.

6.

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14.

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114
Key:

1. Name of Company (Main Office . Capital . Established . Employees)

2. Representative

3. Executives

4. Percentage of Stock Held by Matsushita Electric

5. Principal Business

6. National Housing Industrial Company

Toyonaka City, Osaka Prefecture

2,904,000,000 Yen

I July 1963

1,600 People

7. Shigeo Yamashita

8. [Names from Left to Right. (C) = Chairman, (P) = President,

(VP) = Vice President, (E) = Executive Director, (M) = Managing

Director, (D) = Director, (PI) = Permanent Inspector,

(I) = Inspector]

(C)Seiji Tanba (P)Shigeo Yamashita (VP)Minoru Nishio

(E)Shoichiro Morimoto (E)Hiroshi Nishido (D)Konosuke Matsushita

(D)Seiji Matsushita (D)Iku Kobayashi (D)Kiyonobu Iwai

(D)Akio Kobayashi (D)Masuzo Hiraishi (D)Tadamasa Nishida

(D)Shohei Tsuji (D)Akihiko Nishioka (D)Fumio Wachi

(PI)Noboru Kosaka (I)Tokuo Otsuji (I)Seiji Uneo

(I)Jun Matsuki

9. Manufacture and marketing of houses and building materials.

Contracts to build.

10. Otis Elevator Company of Japan

Minato-ku, Tokyo

2,618,000,000 Yen

II January 1932

1,500 People

11. Minoru Kume

12. (P)Mironu Kume (MI)Kinio Morita (M)Takeaki Takasaki

(D)Tadaji Nagashima (D)Kozo Kitamura (D)Kiyoshi Yamaura

(D)Hiroshi Takahama (D)Yukio Saishoji (D)Suguhiro Masuda

(D)Francois Joran [phonetic] (D)Bill L. Eischman [phonetic]

(D)John R. Road [phonetic] (D)James C. Abeglen [phonetic]

(D)Seiji Matsushita (D)Yoshio Asada (D)Hifuo Okashiro

(D)Hiroshi Yamamoto (D)Keiichi Sawamoto (D)Yasuji Nagashima

(I)Minoru Kosho (I)Kyoji Murotsuka

13. Manufacture and marketing of elevators and escalators.

14. Matsushita Product Distribution Warehouse Company

Moriguchi City, Osaka Prefecture

900 Million Yen

1 June 1977

400 People

15. Eiji Matsumoto

115
Key [continued]:

16. (C)Tuneo Sekine (P)Eiji Matsumoto (M)Michiaki Ishiba

(E)Koichi Miyazaki (D)Konosuke Matsushita (D)Seiji Matsushita

(D)Toshihiko Yamashita (D)Takashi Yamazaki (D)Katsumi Takeda

(D)Shoichi Itoi (D)Masashi Yashihisa (D)Kazumi Uchida

(D)Yasuhiko Nakamura (D)Hiroyoshi Matsuoka (D)Yasuyuki Kohagura

(PI)Michio Adachi (I)Hajime Suzuki (I)Takeo Kawakami

17. Warehouse and transport.

18. Matsushita Kosan Company

Kita-ku, Osaka

3.65 Billion Yen

15 December 1952

200 People

19. Tsuneo Sekine

20. (C)Konosuke Matsushita (P)Tsuneo Sekine (M)Junichiro Kitano

(E)Takeo Kawakami (E)Takashi Yano (D)Seiji Matsushita

(D)Tashihiko Yamashita (D)Seiji Tanba (D)Kotaro Takahashi

(D)Hiroshi Yasukawa (D)Seiji Hino (D)Shigeru Aihara

(D)Yoshiaki Takedate (D)Tsunekazu Hashimoto (D)Masahiko Yazavra

(I)Hajime Suzuki (l)Mitsuo Shimoya (Pl)Chuichi Azuma

21. Buying and selling of land, letting and renting.

22. Asahi National Lighting Company

Higashi-Osaka City, Osaka Prefecture

500 Million Yen

March 1951

846 People

23. Osamu Yoshioka

24. (C)Tadao Hasegawa (P)Osamu Yoshioka (M)Toru Takei

(M)Tochiyuki Yagi (D)Hiroshi Oshima (D)Haruhiro Shimizu

(D)Kazuo Yamada (D)Michihiro Hayami (D)Seizo Ino

(D)Yoshitaro Sawada (D)Seizo Hayashi (PI)Toshio Sugiyama

(I)Seiji Hino (I)Jun Matsuki

25. Name changed from Asahi Electric Company to Asahi National

Lighting Company. Manufacture and marketing of residential-use

lighting equipment, floor lamps, parts.

116
As the company in charge of electronics for industrial and business purposes

mainly, a great deal is expected of Matsushita Communications in the areas

of information, communications, computing, control, audio, and video.

That is, today's society is becoming increasingly more informationalized

and, as the communications company within the Matsushita group, Matsushita

Communications will play the central role in the high-level informationoriented society that is close at hand.

Besides car telephones, a market in which Matsushita Communications owns

an overwhelming share, the company possesses a line of products with a

bright future: floppy disk drives, personal computers, and personal

wireless equipment [radiotelephones].

Furthermore, it is making steady progress in developing a system that

can accommodate information network systems (INS) and local area networks (LAN) .

Matsushita Group's Dash Forward Through Competition And Cooperation

There are other companies besides these in which President Yamashita has

the utmost confidence. They are: Matsushita Housing Machinery Company

headed by President Morimasa Ogawa; Matsushita Electric Trading Company

which handles export matters for the entire Matsushita group and which

is the frontline unit in carrying out Matsushita's world strategy

Matsushita Industrial Machinery Company which is in charge of FA-era

industronics" focusing on industrial robots; the Matsushita Battery

Industrial Company. Each member of the group sustains Matsushita

Electric s continuous dash into the future.

There is also a research and development company called Matsushita Technical Research Center which continues to grow as the brains of the

Matsushita group.

As a huge group in this age of electronics, the Matsushita Electric-headed

Matsushita group must forge ahead in the above-mentioned way, each

member sometimes competing with one another and at other times cooperating

with one another. It could be called an unpredictable group.

12517

CSO: 8129/1328

117
ECONOMIC

BRIEFS

EXPANDING ECONOMY REPORTED—Tokyo, 26 Jun (KYODO)—Japan's official economic

indicators on a diffusion index basis in April showed the nation's economy

going into an expansionary stage, the Economic Planning Agency said Tuesday.

The leading indicator, consisting of 12 indexes, stood at 66.7 percent and

the coincident indicator, of 11 indexes, at 77.3 percent, staying above the

boom-or-bust line of 50 percent for the 14th month in a row in April, EPA

said. The lagging indicator, made up of seven indexes, was at 85.7 percent,

staying above the 50 percent line for the fifth consecutive month. [Text]

[OW260853 Tokyo KYODO in English 0844 GMT 26 Jun 84]

SPENDING CUTBACK CALL REJECTED—Tokyo, 22 Jun (KYODO)~A ruling LiberalDemocratic Party executive Friday flatly turned down a concerted call by

business leaders for a blanket spending cutback in compiling the state

budget for fiscal 1985. LDP sources said. Yoshihiro Inayama, chairman of

the Federation of Economic Organizations (Keidanren), and leaders of four

other business organizations met Masayuki Fujio, chairman of the LDP Policy

Affairs Research Council, and urged the government to stick to the so-called

"minus ceiling" formula in assessing spending requests by various ministries

and agencies. But Fujio brushed aside the call as bureaucratic and unrealistic, party sources said. The call came amid the growing demand in

the LDP that the Finance Ministry discontinue the minus ceiling system,

adopted since three years ago in the face of tight state finances, and

switch to a reflationary budget. Fujio suggested to the businessmen that

the party is now inclined to drop the retrenchment policy and instead earmark greater appropriations for selected priority programs, the LDP sources

said. The sources said Fujio also rejected as not practical Inayama's proposals for keeping the producers' rice price unchanged for another year and

for minimizing annual pay increases-for public servants. [Text] [OW221019

Tokyo KYODO in English 0931 GMT 22 Jun 84]

118
PLANS FOR NEW INVESTMENTS MINISTER-Tokyo, 27 Jun (KYODO)-Prime Minister

Yasuhxro Nakasone said Wednesday the government plans to use private-sector

investments as a means for boosting domestic demand. Nakasone! In an address

to the Japan Newspaper Publishers and Editors Association, said the govern^

*ent has no money" for public works because of budgetary deficit ?o expand

urW T. r

nd'the

r

eTiment Plans t0 *°o1 Private-sector resources for

urban development with the use of public lands, he said. The prime minister's

c

rraticSp:rtrtedt0 "*"* ST*** ^^""^ the ^«£•£££ ' cratxc Party to increase public spending in the 1985 fiscal year. Nakasone

also said he plans to appoint Ichiro Nakaishi as minister in charge of promoterLP

L'f: r

esS

inCttL nVeStmentS* f""1*

1

'

CUrrently director *2r2 of gen- eral arfairs in the prime minister's office, is tipped to become a new minicGetral Aff ^'n^ ** *

CaMnet r6Shuffle resu1^ from the merger of the

inS^ov.f^1

irS Departraent with the Administrative Management Agency! [Tertl [OW270755 Tokyo KYODO in English 0740 GMT 27 Jun 84] agency. ilextj

CSO: 4100/164 END

119