Matsushita Electric Works, Ltd.

1048, Kadoma
Osaka 571
Japan
(06) 908-1131
Fax: (06) 909-7053

Public Company
Incorporated: 1935 as Matsushita Electric Industrial
Employees: 15,000
Sales: ¥891.78 billion (US$6.20 billion)
Stock Exchange: Osaka

Matsushita Electric Works, (MEW) is the industrial counterpart of the better-known Matsushita Electric Industrial Company (MEI), makers of consumer electronic products under brand names including Panasonic and National. MEW’s six operating divisions manufacture a wide variety of electrical, lighting, and building products in relative anonymity, most observers assuming incorrectly that MEW is a subsidiary of MEI. While MEI retains 28% of MEW’s stock, the latter operates independently, and its mix of products is probably closer to the original interests of Konosuke Matsushita, the charismatic founder and builder of the Matsushita business group.

Konosuke Matsushita was born in 1894 to a farming family. When his father was ruined by commodities speculation, Matsushita went to work in a bicycle shop, at the age of nine. Matsushita became interested in the growing number of uses for electricity in the Japanese economy, and worked for several years in an Osaka light bulb factory. In 1918, at the age of 23, he founded his own company in Osaka to manufacture electric plugs, with both his wife and son-in-law playing active roles in the new venture.

Matsushita’s company survived its difficult first years and soon was benefiting from the robust economy of the 1920s. He added bicycle lights and electric heaters to his product line and aggressively cultivated clients in Japan’s complex network of retailers, usually unwilling to do business with smaller, independent suppliers. Despite the onset of the Depression in 1929, Matsushita continued to add products to his catalog—radio sets and dry batteries in 1931 and electric motors four years later. Matsushita delivered his products more cheaply than other suppliers, using volume and efficiency to keep his costs low. He also built a reputation as a generous and fair employer, able to inspire loyalty and hard work among employees. His popularity continued right up to his death in 1989 at the age of 94.

On December 15, 1935, Matsushita incorporated his growing business as Matsushita Denki Sangyo—or Matsushita Electric Industrial—the name later applied solely to the consumer products group. The company prospered during World War II, when the Japanese economy required both innovative technology and maximum production from all manufacturers.

Matsushita and other Japanese industrialists eventually watched their factories destroyed and the Japanese economy reorganized according to the plans of General Douglas Mac-Arthur and his occupying officials. Like many other business leaders, Konosuke Matsushita was marked for early retirement by the Allies for his support of the Japanese war effort, but a threatened strike on the part of loyal trade unions convinced the occupation authorities otherwise: Matsushita remained as chairman.

It was at this point, when many of the country’s largest conglomerates were broken into smaller pieces by the authorities, that Matsushita was forced to spin off Matsushita Electric Works, to produce industrial complements to MEI’s consumer products. In 1947 Masaharu Niwa was named president of the new company, which concentrated on wiring devices for both residential and commercial structures. Given Japan’s massive demand for new construction, MEW needed only to survive the first few chaotic postwar years in order to win a virtually unlimited market for its basic products. With Konosuke Matsushita backing MEW by means of his substantial equity holdings, the young company was soon prospering.

In 1951 MEW was listed on the Osaka Stock Exchange, an indication of its need for fresh capital to fund further growth. The following year the company introduced a line of fluorescent lighting fixtures, the beginning of its extensive involvement in lighting systems of all kinds. As the Japanese economy picked up steam during the mid-1950s, MEW continued to add a variety of products to its collection, most of them related to the construction industry but some aimed at the growing consumer markets usually handled by its sister company. In 1953, for example, MEW introduced electric hair dryers and shavers, creating an appliance division which contributes just less than 10% of the company’s $6 billion in sales. More typical was its 1958 offering of plastic gutters for the residential housing market, a market for which MEW would eventually develop scores of products ranging from kitchen and bath fixtures to exterior siding.

In the 1960s the Japanese economy came into its own as a global industrial leader. Both of Konosuke Matsushita’s creations grew at a prodigious pace, and MEW further strengthened its position in industrial electricial components. Not as dependent on international sales as its parent, MEW waited until the 1970s before making substantial overseas investments. In 1974 it established MS-Relais in West Germany to manufacture electric relays locally for European sales; Europe became an important market for MEW and remains so today. Also in 1974, MEW for the first time ventured into the U.S. market with the establishment of Aromat Corporation, in California. Since then, MEW has increasingly emphasized local production rather than export, adding other plants in Taiwan and Thailand as well as sales corporations in seven countries. To support these growing international facilities, MEW created a Dutch finance company, Matsushita Electric Works Netherlands.

In 1977 Masaharu Niwa was elected chairman of MEW after serving 30 years as its president, with Zenichi Kozaki becoming president and the 82-year-old Konosuke Matsushita remaining a very active director and executive advisor. Konosuke Matsushita had by this time become something of a prophet of Japanese business methods, authoring nearly 50 books promoting “the peace and happiness of society through business.” MEW became active in the growing high-technology electronics field when it added an electronics and plastic materials group. Along with another addition, the automation controls group, this electronics initiative has given MEW a foothold in a segment of industry certain to benefit from Japan’s always-advancing technological expertise.

The company’s bread and butter, however, remains basic lighting, wiring, and building-material products, which together account for approximately 75% of corporate revenue. With the death of Konosuke Matsushita in 1989, MEW in a sense launched into a new era, though the venerable Masaharu Niwa remains as honorary chairman. Still 28% owned by its sister company, MEW remains firmly in the Matsushita group, yet has demonstrated its ability to develop and market an increasingly wide array of high-tech and consumer goods on its own. That combination should enable MEW to maintain its position as one of Japan’s top suppliers of electrical and building products.

Principal Subsidiaries

National Wood Products Co., Ltd.; Meiji National Co., Ltd.; Matsushita Gaiso Kenzai Co., Ltd.; Kitakyushu Matsushita Electric Works, Ltd.; Tatsuno Matsushita Electric Works, Ltd.; Obihiro Matsushita Electric Works, Ltd.; Mohka Matsushita Electric Works, Ltd.; NTP Co., Ltd.; Oki Denki Bohsai Co., Ltd.; National Electric Clock Co., Ltd.; Owari Matsushita Electric Works, Ltd.; Aromat Corporation (U.S.A.); Aromat Canada Inc.; SDS-Relais AG (Germany); SDS-Relais (Schweiz) AG (Switzerland); SDS-Relais Austria Ges.mbH; SDS-Relais Limited (U.K.); SDS-Relais Italia S.R.L. (Italy); SDS-Relais France SARL; MS-Relais GmbH (Germany); Matsushita Electric Works (Thailand) Ltd.; NPL Taiwan Co., Ltd.

Further Reading

“History of Matsushita Electric Works, Ltd.,” Osaka, Matsushita Electric Works, Ltd., 1989; “Matsushita Electric Industrial Co., Ltd.,” in International Directory of Company Histories, Volume II, edited by Lisa Mirabile, Chicago, St. James Press, 1990.

—Jonathan Martin