Panasonic - 1954 to 1973

Matt Sushida. He is the founder of Pana Sonic, and in fact, the company was originally called the Matt Sushida Electric Industrial Company, Limited, and we're still in that era as I pick up this episode. In fact, the company at the end of the last episode had not even introduced the Pana Sonic brand name yet. We also learned how the company produced military vehicles wooden ones for Japan during World War Two, and how the company didn't really

necessarily have a choice in that. Again, I don't really know what the sentiments were for Matt Sushida and his employees, but I know that they really didn't have any option but to make those military vehicles, and that would end up putting the company in danger when the US government began to kind of dismantle older Japanese businesses that were very um familial. They were all kind of locked into these families that had deep relationships with one another and

with the Japanese government. So this was sort of a systemic approach to dismantling all of that. And uh, Matt Sushida, despite the fact that it wasn't this ancient family business, was one of the companies that was under the microscope when that was going on. We're now up to nineteen five d four when the company was just starting to try and market radios to the United States, and for Matt Sushida, this was still the pre transistor radio era.

There were transistor radios around this time, but Matt Sushida was not making them yet, so we're still talking about radios that use vacuum tubes for amplifiers. So let's get back into this story now. During the nineteen fifties, Japan's economy saw some fluctuations. Early it saw on overall improvement, but there were some ups and downs along the way. The country was still in a post World War Two

era of reconstruction officially until nineteen fifty two. The economy boomed in the early days of the Korean War because the forces, like the United Nations, the United States in particular, were dependent upon Japan to supply materials that they needed. But by nineteen fifty three the economy was starting to slow down a little, it picked up again, and despite some drops here and there, was on a fairly steady

climb through most of the nineteen fifties. One consequence of this is that a lot of Japanese households were making more money, and thus they had more money to spend on what had previously been a luxury item like an electric appliance. So Matt Ssshida the company saw sales grow,

at least in Japan. I honestly don't know how their sales numbers fared in the United States, because while the histories I read talked about the company marketing radios over here, I didn't find much information about how the sales were going.

If the sales were good, the company had managed to overcome the odds because Japanese electronics were not yet common in the US and most Americans didn't associate japan with technology at that point, and for years the general rep for Japanese technology was associated with really cheap goods that didn't perform as well as stuff that was produced in the United States or in Europe. It would take some

time for that perception to change. It was not helped by the fact, and we'll get into it that Japanese companies did some fairly shady things in order to really get a foothold in the markets of Europe and North America. Now, one thing that Matsushida had to do in the American market was come up with a new brand name for some audio speakers that the company wanted to sell to

customers in the United States. They had been using the National brand in Japan, but that was sort of a prestige consumer products that the company was selling in Japan, and it had a real issue, which was that there were a lot of companies in America that had some variation of National as their branding, so it really wasn't a possible brand for them to go with. So they had to create something new, and they went with something

that felt related to speak, kers and sound. They came up with the name Pana Sonic, and so in nineteen fifty five, remember this company was founded in nineteen eighteen. Nineteen fifty five, we finally get the brand name that would ultimately become the name for the entire company again more than fifty years later. Spoiler alert, and that's not

even going to come in this episode. Another spoiler alert, and dangan we we nearly got to that brand name at the end of the last episode, but just missed it. Over in Japan, things were going pretty well in nineteen fifty five. The company was one of several in Japan to enjoy the rebound of the economy as Japanese households began to invest in home appliances. The three major ones at that time we're all really big ticket items. Television was one of them, a refrigerator was another, and a

washing machine was the third. Those were the three must haves if you wanted to have a modern household in Japan. Matt Sushida invest did in the manufacturing process, which made production more efficient and helped bring down the cost of manufacturing, which also meant the company could sell their products at a lower price tag sort of, we'll get to it.

By nineteen fifty five, factories were producing more than five thousand units per month, which is a small number compared to manufacturing facilities today, but at the time in Japan, it was an impressive accomplishment. The Japanese government announced in nineteen fifty six that the nation had successfully navigated the process of economic reconstruction. Now, I believe in the previous episode I mentioned that Japan used to be an empire, and I really should take this opportunity to say that

technically it still is. There still is an emperor of Japan. It's just that these days the role of emperor is almost entirely symbolic, with the actual role of governing falling to the executive, legislative, and judicial branches of the Japanese government. Something else happened in nineteen fifty six that does not pop up in Panasonic official history, and that was the formation of an organization called the Home Electronic Appliance Market

Stabilization Council. Now, this council counted the larger consumer electronics manufacturing companies among its members, the big Japanese electronics companies. This group, which The Washington Post would later label as an illegal production cartel, worked together to set minimum price levels for certain products like radios and television. They all said, none of us are going to price any of our

models below this certain amount. As price fixing is what it was and coercion between companies that are supposed to be competitive, and it also acted against foreign companies. They worked very hard to lobby the government of Japan to put as many obstacles in the way of foreign companies that were trying to get imports into Japan and as possible, because they didn't want that competition there, So they were trying to deny foreign companies access to distribution chains in Japan,

for example. And when we come back to this a little bit later in this episode, we'll see how these companies in this council would have a profound impact on the electronics market in the United States anyway. Also in nineteen fifty six, Konosuke held his own meeting within matt Sushida, and he laid out an ambitious five year plan. So in nineteen fifty six, the company posted annual sales of

twenty two billion yen. Now, if we adjusted that for inflation, that would be nearly one thirty five billion yen today. I would give those figures in dollars, but then you have to consider stuff like the historic exchange rates, and it really gets difficult to find resources that include exchange rates the date back that far so I can't really tell you how much that is in US dollars in

a meaningful way. Anyway. The start point was twenty two billion yen, but Konosuke wanted to have sales climbed to eighty billion yon within five years. He also wanted the assets for the company to increase from three billionion to ten billion yen, and he wanted to grow the company by seven thousand employees at the end of those five years. So this was a pretty ambitious and aggressive plan, but Konosuke argued that it really reflected what the people of

Japan wanted, and the company restructured. It had grown to eleven divisions up to that point, but now they subdivided that, so now it was fifteen divisions. Konosuke did this because he really believed that each division needed enough autonomy to make decisions that would benefit that specific division and not get tied up with the fate of the company at large.

So that way, the consumer electronics division and an industrial like business to business vision could each operate independently of each other and not have to worry about the success or failure of one affecting the other. While the plan was ambitious, it turned out that it was also achievable because the company would hit all the goals of this five year plan in just a little more than four years.

Jumping back to ninety six just for a second, that's also the year that Matt Sushida introduced an electric automatic rice cooker. The cooker had a heater inside it that used the same general process as the heating coils that I talked about in the previous episode with irons, so I won't go into it again, but it also had a thermostat that could cut off power to the heating coils after the cooker had reached a target temperature, which meant the cooker wouldn't burn the rice. So how the

heck do thermostats work? I mean, this is a tech stuff episode, right, and you knew I was going to have to do this. We'll be looking specifically at electro mechanical thermostats. There are more modern thermostats that are purely electronic. They have sensors that can measure heat in very precise ways and thus send a command for a heating or cooling element to stop or start, depending on the situation,

But older thermostats depended on a different approach. These thermostats work because of physics and how metal expands in the presence of heat. So why does metal even do that? When the metal heats up, the atoms in the metal gain more energy and they move around more because atoms are always moving, well, nearly always. If a material were to cool down to like absolute zero, the atoms would

essentially freeze in place. There'd be no atomic movement. But if you add energy in the form of heat in this case, it will cause the atoms to boogie down a bit more. They'll move around more than they did before. And as they do that, they take up more space than they used to, and so the piece of metal as a whole expands because those individual atoms and molecules are pushing each other apart as they get funky with the heat. I can completely identify with that. However, different

metals don't all do this at the same rate. They have different expansion rates. Some metals expand more slowly than others, and you can think of these metals as having atoms that have a different tolerance to heat. They just aren't as impressed as the temperature goes up. If you take two different metals that expand at different rates, and then you sandwich them together so that you get a strip of metal where one side is one metal, the other

side is the other metal. You have created a bimetallic strip. And if you apply heat to this strip, one side of the strip will expand faster than the other. So one side is expanding quickly, the other one is less quickly, and so that means that the expanded side's going to start to curl around. As a result, it deforms the

bimetallic strip. And your typical electro mechanical thermostat has a bimetallic strip and that that does this, and as it expands, it will displace or tip a component that acts like a switch. In old air conditioners. This would tend to be a vial of mercury, and the mercury would have some wires attached inside the vial that would come into contact with the mercury. Depending on the vial's orientation. Liquid

mercury conducts electricity. That's an important part of this. So depending upon the vial's orientation, the heater or the air conditioner and the circulation fans would turn on or off. So with this rice cooker, the thermostat would trip upon reaching a particular temperature and power would stop flowing to the heating coils. Matt Sushida wasn't the first company to

offer an automatic electric rice. The competitor Toshiba had one that came out a year earlier, but Matt Sushida's version boosted awareness of this technology, and in ninety seven the category of automatic rice cookers really began to take off in Japan. In nineteen fifty eight, Matt Sushida produced the company's first home tape recorder audio tape. This was the r Q two A one. This wasn't a cassette tape player like the kind that would dominate the nineteen eighties

when I was a kid. This was a real to reel tape recorder. So, hey, guess what. We get to talk about how these work really quickly. And this is helpful because it also gives you an understanding of how magnetic storage works in general, whether it's for audio or video or computer data storage or whatever. So let's start with the actual tape, and this is the stuff that stores information. Basically, it's a strip of plastic material that has a ferric ox eye powder bonded to that plastic

material through some binding agent. Essentially, you can think of a binding agent is kind of like glue. Ferric Oxide is an oxide of iron. The one most of us tend to encounter is iron oxide that's also known as rust, but ferric oxide is a little different. Iron oxide is made up of one iron atom and one oxygen atom, whereas ferric oxide is too iron atoms and three oxygen atoms, and that makes all the difference. Really. Ferric Oxide is

ferro magnetic. That means that if you expose ferric oxide to a magnetic field, the field will permanently magnetize that ferric oxide. And this is what lets us record information

to magnetic tape. Using an electro magnet. You can subject parts of that tape to a magnetic field as the tape passes by, So as the reels are turning, the tape is being pulled across underneath an electronic writing head that has this electro magnet in it, so it creates this magnetic flux generated by that electro magnet, and that affects the particles on the tape. It aligns those particles

in specific ways. So during playback, when the reels are rewound and played back across this same electro magnet, the head is no longer active, it's in passive mode. But the tape's motion creates a magnetic flux that the electro magnet picks up and creates a signal out of that.

So you get a reversible process here. You have one signal that you can encode through magnetism, and then use that magnetism to regenerate that encoded signal and send it back through say an amplifier, to speakers, so you can

listen to the audio you've recorded. So again, if you speak into a micro phone, the microphone converts the kinetic energy of your voice that you impart to a little diaphragm that's inside the microphone into electrical signals, and those signals typically passed through an amplifier to boost their strength before they feed into a recorder, which then takes that electric signal and generates a magnetic fluctuation that passes on

to the tape. The tape holds the record of that fluctuation, and on playback, the whole process is reversed, except in this case, the signal doesn't go back to the microphone. It would go say two set of speakers after passing through an amplifier. Real to real tape recorders are super cool, but they didn't become household systems. They aren't terribly convenient, and storing real to real tapes is a pain because

they take up a good amount of space. The development of the cassette tape, which would come a few years later, would put the reels inside a little plastic cassette and those were much easier to use, and that would change things dramatically, but we're a little too early for that with the r Q two oh one. I've looked at photos of this particular tape recorder and I gotta admit I really dig it. It looks kind of like a briefcase.

It's got a handle on the top of it. You did have to plug it into a wall, so it was portable, but it wasn't battery operated. The same year that Matt sushied To introduced the tape layer, it also launched a room air conditioner, one of the earliest small air conditioners intended for home use in Japan. There's a small unit that could be mounted in a window. The company produced eleven hundred of them in the first year of production, and I am not going to go through

how air conditioners work. That's because I already talked about how refrigerators work in our last episode, and an air conditioner works in pretty much the same way with heat exchange coils and fans and then compressor and expansion valve, all that kind of stuff. So you've been spared that whole discussion because we already had it. You're welcome. Now. I've got a lot more to say about Matt Sushida slash Pana Sonic, but first, let's say a quick break.

By the late nineteen fifties, Matt Sushida the future Pana Sonic was starting to see an increase in international sales, though Kona Suke believed that they hadn't really even scratched the surface yet. In the fall of nineteen fifty nine, the company established its first office in North America, the Matt Sushida Electric Corporation of America in New York. By this time, the company was producing transistor radios, and again

it was not the first company to do this. Matt Sushida was not necessarily an innovator of technology, but it did adopt them pretty quickly in order to produce consumer products for the various markets. Engineers at Bell Labs were actually the first to develop the transistor all the way back in n seven, though the transistor they made was far too large to be used in electronics. It was

more of a of concept. However, it didn't take long for companies to start manufacturing smaller transistors and other companies to then take those transistors and use them in consumer products. So by the late nineteen fifties, Matte Sushida would join lots of other electronic companies that we're already producing transistor radios. The main purpose of the transistor was to amplify signals, something that vacuum tubes had done before. And I've talked a lot about how this works, so really we just

need to think about the general concept. You start off with a relatively weak signal that holds the information you want, like a radio broadcast, for example. So you've got a radio and a radio antenna picks up the broadcast signal. The antenna converts that signal into a weak electric signal. Technically, the antenna is not converting anything. It's all about physics. But anyway, you get the radio broadcast converted into a weak electric signal that goes through the antenna to the radio.

But that signals typically not wrong enough to really drive something like speakers effectively, So if you try to listen to a radio that didn't have an amplifier in it, you would get a very quiet result. So the purpose of the transistor is to boost this signal without otherwise altering it. So it's all about giving the signal more oomph, but not changing it in any other way because that

would just scramble the output. Vacuum tubes served that purpose for decades, but they are large, they're delicate, they're kind of like lightbulbs, and they put out a lot of heat, so they weren't ideal for portable electronics in general. They do still serve a purpose in electronics today, particularly with musicians amplifiers. Guitarists swear by amplifiers that are too be amplifiers versus transistor amplifiers, and as soon as I get my guitar this week, i'll be able to tell you

my thoughts on it. Kind of The transistor, though, allowed for menturization because the transistors themselves were smaller than vacuum tubes, and also because they didn't put out as much heat, so you could have a small reform factor and not

worried about it overheating and becoming a problem. Panasonics transistor radios would become a success story in the United States, driving much of the overseas sales numbers, and it didn't hurt that the name pana Sonic applied equally well to radios as it did to the speaker systems that came before. In nineteen sixty, the company developed its first color television set, the National K twenty one ten. So since this is national,

we know that this was for the Japanese market. This one had a twenty one inch screen on the diagonal and it was a hefty critter. It was inside a cabinet. Um it's kind of hard to cover everything that the company was doing. And while I'm mostly familiar with the consumer electronics side of the company, that was really just one to vision of many. This is a company that did lots and does lots of stuff. It's just that the things that are most visible to to me happen

to be the consumer electronics. Mattsshida was also in the business of producing heavy grade electrical equipment for industrial purposes, like stuff like transformers. More than meets the eye, So you know, I haven't talked about transformers in a while either. This is why I love doing these history episodes. By the way, guys, it lets me fit in tons of how this tech works, so I sneak in some technical

education along with historical education. So transformers are a way to change the voltage when you're transmitting electricity from one place to another as long as that electricity is alternating current, meaning that the direction that the current flows and switches many times a second. And it's all because of some

interesting elements of electro magnetism. Now I mentioned electro magnets with tape recorders, so this kind of builds on at If you run a conductive wire around, say an iron core, and then you run a current through that coil of wire, you'll create a magnetic field. With direct current, this ends up being a steady magnetic field, but if you use alternating current, you get a fluctuating magnetic field. The field

changes as the direction of the current changes. So the magnetic field fluctuates as many times a second as the current changes direction. Now, one thing that is super cool about electro magnets is that if you put one next to another one and you run alternating current through the first of your two electromagnets, and the second one doesn't have anything going through it at all, that fluctuating magnetic field from that primary electro magnet will induce current to

flow through the second electro magnet. So, just as electricity flowing through a coil will create a magnetic field, a coil in countering a magnetic field will have current flow through it. Now, that's true as long as the magnetic field is changing in some way. The changing magnetic field is necessary if you want the current to keep flowing. Otherwise, current will flow as the coil encounters a magnetic field, and then it will stop if the magnetic field doesn't

change at all. So if the coil stops moving if the magnetic field is stable, you won't get current to flow. Transformers work by pairing two coils together, primary coil and a secondary coil, and the ratio of the number of loops of each coil between the two. That ratio determines how much the voltage will either step up or increase, or step down or decrease. If the primary coil has more loops than the secondary coil, you've got yourself a

step down transformer. The voltage that's going out of the transformer is going to be lower than the voltage was going in. Now that's important. If you're delivering electricity from a main transmission line to a building like a house, you don't want high voltage going into the house. You would have to say danger, danger, high voltage. That's an Electric six reference. If you don't know who Electric six is,

you should definitely listen to that music. Anyway, If the secondary coil actually has more loops than the primary coil, then you've got yourself a step up transformer. It means the outgoing voltage is going to be higher than the incoming voltage. This is what you would use to transmit electricity across far distances where you need that high voltage to push electricity through with as little loss as you

can manage. This is ultimately why alternating current one out over direct current, because transmitting direct current over long distances was a challenge in the early days of electricity, and typically admit that you really had to build lots more power plants to be those to the areas where the electricity was going. One other neat thing about transformers is that there really aren't any moving parts. Transformer doesn't wear down the same way that mechanical systems do over time.

That being said, things can and do go wrong with transformers, and not just Decepticons. If you've ever witnessed this firsthand, you know how spectacular it can be to see a transformer blow. If the installation around one of the coils happens to wear down, or it corrodes, or if the transformer is really close to a lightning strike, the transformer

can heat up and give out a spark. Now, typically transformers use mineral oil as a coolant to keep things at operational temperature, but mineral oil can burn, and if it does, it will create pressure inside the sealed transformer, and when that pressure is great enough, it causes the transformer to burst been and typically you get a really loud bang and a lot of sparks and maybe even some flames, and those sparks tend to be kind of

bluish green there really spectacular, especially when it happens at night or whenever the sky is super dark. And I've seen this happen a few times, and I'll never forget the first time I ever saw it. It was when I was a kid. I was in the back seat of my parents car, and we were driving through Atlanta, and that by itself was outside the norm for us, because I grew up in rural Georgia. To us, Atlanta was the big, big city. And I remember a transformer

blew up not too far from our car. It was a couple of card links ahead and on the left hand side, and at first I thought maybe someone had fired off a shotgun or something. I had no idea what had happened, and my dad actually explained to me what was going on, and I have never forgotten how startling that was. Anyway, let's get back to the history

of Matsushita slash Panasonic. In nineteen sixty one, matt Sushi, you began to expand operations by not just opening up sales offices in other countries, but also actual manufacturing plants, putting the manufacturing closer to where you were going to sell the stuff. The first of those was a battery production facility called the National Thai Company or in TC. That should not be confused with one of many other

entities that also go by the name in TC. I actually got a little confused when I first came across this name and had to research it further because it was like, is this the NTC I'm thinking of? It was not. Names are hard y'all. The company also established or helped establish plants in places like Uruguay and Pakistan, and by the end of the decade, it would expand operations to the Philippines, to Australia, Peru, Mexico, Puerto Rico,

and several other places. The little company that had started off as a workspace in a tiny room that had dirt floors was now a global entity. Kanasuke Matsushida had accomplished an enormous amount in his run as the founder and president of the company, and in nineteen sixty one he decided to step down as president, although he would remain the chairman of the company for several more years.

His replacement was his son in law, Masaharu Matsushita, and here we go that familial line of succession in companies again. During Kanasuke's run, the company didn't just grow dramatically. Kanasuke's philosophy stressed the importance of harmony, and he had a reputation for really listening to his employees, and he led the way in attempting to adopt fair business practices at least in Japan in public, we'll get more into that. His company was the first one in Japan to adopt

the five day work week. This was announced like by nineteen sixty, it took until nineteen to actually roll out, and that was something that other countries have been adopting since the early nineteen hundreds, so Japan was kind of trailing behind here. And it's actually a pretty good idea to talk a moment about the differences in work culture

in Japan versus places like the United States. So in Japan, the major companies are fierce competitors, not just in the market generally when they're not you know, working secretly together, but they're also competitive for employees. Companies seek the highest performing students to join their ranks. Employment tends to be a lifetime gig with those companies, so company loyalty and the company reciprocating that loyalty over time is a big

part of the culture. Starting wages in Japanese companies are especially around this time. We're pretty low, and we're often tied to seniority, and you would typically stay in the same job and just get increases in wages working that same job through the course of your career. That is, of course, all this is only true if you were a full time employee. If you were a part time employee, which included most of the women who were working in Japan,

you would not enjoy the same benefits. You wouldn't get those same considerations. On a related note, these days, there are a few Japanese companies that are actually experimenting with moving to a four day work week in an effort to reduce work stress and burnout and to boost productivity. The booming economy of the nineteen fifties meant that consumers

were purchasing more electric appliances than ever before. The Japanese household was modernizing, and the company's overseas manufacturing facilities could supply Mattsushida goods to other markets as well. But this also brought up a new need the development of a service department, because sometimes even when we do everything correctly, our technology break and many manufacturing companies, Mattsoshida among them, introduced service divisions for the purpose of repairs and to

establish the correct policies and processes for service centers. If someone wanted to open up a repair shop for matt Sushida products, they could have their business certified through Matt Soshida and learned the best ways to tackle common repair issues. Mattsshida established the service division in nineteen sixty four, but that booming economy of the nineteen fifties had gone into a bit of the slump. In the nineteen sixties. Several

factors came together and hit Matt Sushida hard. One was the general economic slump, which started around nineteen sixty one and got worse year over year. Another was the volatile market for consumer electronics, which makes sense, right. I mean, once you buy a big appliance, you aren't likely to need another one for a good long while. I mean, I don't know about you, but I don't buy refrigerators

all that often. So a company might experience rapid expansion and growth early on when a country is going through the process of modernizing, and then see that growth plateau or even decline as you start to get to market saturation. You know, more households get up to speed, there are fewer households that are in need of those things, and that was starting to happen in Japan in the nineteen sixties.

The company had produced more goods than it could sell, so supply was outstripping demand, and the company was hurting. In nineteen sixty four, the company posted a decline in profits, which was the first decline in profits since nineteen fifty, and there was concern across the company, with the sales departments blaming production, production was blaming sales. Things were coming to a head. It was time for Konosuke to step up again. We'll learn how he did that in just

a moment, but let's take another quick break. In nineteen sixty four, Matt Sushida held a conference in a Tommy, Japan, where the presidents of all the sales companies and divisions were to gather together to talk through the problems that

the company faced. Kona Suke ultimately addressed the group and said that the economic recession had played a large part in the current company status, but that the company itself had also made some bad decisions that exacerbated things, and he stressed that all sides had some accountability in this problem, and that trying to pen blame on one side or

the other would just delay any solution. Kanasuke himself came out of retirement and temporarily assumed the duties of the corporate sales division director in order to overhaul the sales and distribution divisions at matt Sushida. Early in nineteen sixty five, he presented his plan to reorganize the division and institute new policies. The plan did not initially receive universal appeal, but over time the division adopted it and the company's

fortunes began to improve. By nineteen sixty six, the company also implemented a new wage structure. Now wages were no longer tied to seniority as much, but rather to job classification. Konosuke wanted to model Matsushida's operations after what he saw

when he visited the United States. He wanted them to be more like a US company, and his ultimate goal was to get wages closer to what people would earn in a similar position in the United States, and it would take several more years before the company would even get close to that goal, but it was improving over time.

One of the shifts the company made was to create a stronger communication channel between sales and production, So Konosuke thought that it would be valuable to get the sales team input on stuff that the manufacturing side should really focus on, and the development side as well. The sales team had experience talking with retailers, and the retailers knew

what customers were looking for. So now that Sushida was looking to develop new products not just from their internal R and D division, but also by responding to customer desires. As a result, the company started developing a whole new range of consumer electronics, some of which were on a more whimsical side. For example, while researching this show, that came across a radio that Panasonic produced in the nineteen

seventies called the twot A loop. It's t O O T dash a dash l O O P. Often classified as a novelty radio for good reason. This device kind of looks like an oversized bracelet that is slightly offset. It has one side that's thicker than the other, and that thicker side holds the actual radio and speaker, and you aren't supposed to wear it on your wrist. It was an a M band radio only, so it only had the ability to pick up a M stations, no FM signals, and they go for pretty penny these days.

I just did a casual search and I saw some listed online for between a hundred fifty dollars to two hundred dollars now. The suggested retail price when they first went on the market was a mere fourteen dollars cents. However, if we adjust that for inflation, it would be quite a bit higher. Based on the inflation calculator that I used, fourteen dollars in say n two would be equivalent to ninety two dollars twenty cents today. So this radio would

cost nearly a hundred bucks in today's money. So I guess when you take that into consideration, uh, and you think of the value they have as collector's items, the value has only slightly appreciated when you adjust for inflation. Honestly, that am only thing really knocks it in my book.

Mattsushida began to produce a wide variety of consumer goods more in tune with what people wanted, just as the Japanese economy also began to recover, which created pretty much a perfect situation to pull the company away from the chaos that had threatened it just a couple of years earlier. The company continued marketing new consumer electronics, including its first microwave oven, which was actually a very tall cabinet like

device like mook to me like. It was about four or five feet tall, so it was intended more for businesses than homes, so I didn't take up that much floor space, but did require a good deal of vertical space. In nineteen sixty seven, Matte Sushida created a new transistor radio cassette recorder for the US called the r Q two thirty one. I took a look at this, and you know, it looks a lot like a radio cassette player that I owned when I was a kid. I

had one very similar to this. One has a little handle at the top, has the telescoping antanna and the company's old collaborator, Phillips, had actually invented the compact cassette format back in nine teen sixty two. Those cassettes that I talked about being such a big thing in the nineteen eighties, So this was the first of Matt Sushida's radio cassette players that followed that format. UH and cassettes were much easier to use than realtorial tape, and they

took up a lot less space. Like I said earlier, in ninet, Matt Sushida slash Panasonic would celebrate its fiftieth anniversary. The company created some new initiatives, including investing in sales and production offices in towns of Japan that had seen issues with depopulation. Young people were moving away from these towns because they were seeking out opportunities, and most of the big companies had offices and factories in places like

Osaka and Tokyo. So this was Matt Sushida trying to take advantage of that workforce, not by tempting them away, but by building centers closer to them. The company also introduced a technology called pen assert a in a S E R T. And when I first came across the description of this technology, I was left with more questions than answers. So I'm just going to quote the passage directly from Panasonic's history so that you guys can can

hear what I first encountered. Quote. This machine represented the start in nineteen sixty nine of automated electronic mounting devices and components in Japan, the foundation for the company's business in mounting machines. The original random access system was improved and became a direct random access system in which taping was transferred to the insertion head so that a component was inserted without being freed This made for rapid progress

in the mounting tact time and reliability. The system became the leader in the field of mounting machines end quote. So I had to look into this further because I had no clue what the heck this was talking about mounting machines. I mean, that could that could mean so many different things. But I'm sure most of you know what they meant from the beginning. I'm the dumb one. I get it. I totally own that. So what they're talking about here are devices that you could program to

mount components onto circuit boards. So the idea here is that you design a circuit board for you know, whatever thing you're making, and you program a pen Assert automated machine to go through the process of inserting components into that circuit board in the proper arrangement and orientation. So you feed a bunch of blank circuit boards into this machine in a way it goes. And there have been many devices in the pen Assert line, some with very

specific responsibilities. I watched a couple of videos of them in action on YouTube, and some of them are pretty alarming. They move really fast, and some of them look like they could easily take a finger off if you weren't being careful around them. In nineteen sixty eight, the Import commit of the US Electronics Industries Association filed a complaint with the US Treasury Department, and it laid out a

pretty nasty accusation. It said that there were a collection of Japanese companies, Japanese electronics companies that were collectively under pricing color televisions for the US market with the intent to undermine the US market, specifically to undermine US manufacturers of televisions. The Japanese companies were using a complicated process that included things like rebates and incentives with retailers in

the US, essentially turning those retailers into co conspirators. And meanwhile, those same manufacturing companies in Japan were selling television's at premium prices in Japan, so they were selling the stuff for very high prices in Japan and then using that money to pay for this effort to under price stuff in the US market. And the ensuing and investigation would stretch on for years, but it did uncover evidence that

these allegations were true. Addressing the problem, however, most politically difficult, as any move against Japan could mean that Japan and maybe some other countries could impose tariffs and other trade restrictions against the US. So no real action happened on an official level in the United States, but American companies that had been making televisions gradually exited the market. They could not make a profit because Japanese companies were selling

TVs at a loss. They were selling them for less money than it costs to make them. The story, by the way, it gets super interesting, but it's also probably

better saved for maybe even a different podcast. However, it does involve everything from shady trading practices to essentially buying former politicians so that they would act as lobbyists and more, and all of that stuff typically sticks out as some of the really glee side of capitalism, so I think that would probably fit on a different show better than mine. In nineteen seventy, Matsushida sponsored an exhibit at the Expo

seventy event in Osaka, Japan. The exhibit had a traditional Japanese building, a very traditional structure that inside had a tea ceremony, which was an interesting nod to the history and heritage and traditions of Japan, especially when it was coming from a company that was associated with technology. The company also created a time capsule, and a group of committees selected more than two thousand objects to put into that time capsule. Uh it was intended to be buried

and opened in five thousand years. It's only been fifty years since they buried the capsule, so we've got a ways to go before we can learn about the objects that the committee's decided were quote especially representative of the current culture as of nineteen seventy end. Quote that time capsule is buried at Osaka Castle Park. So I really would love to see it because I remember the seventies and I can only imagine how embarrassing some of those items will be. Not At the same time, the company

was dealing with some unhappy customers in Japan. You know, there was this growing dissatisfaction among consumers in Japan. They were seeing the gap between the list prices versus the actual selling prices of electronics. The list price is the price of manufacturer attributes to an item as the suggested retail price, but retailers aren't necessarily under any obligation to follow that, and a retailer can mark up prices in an area where there is little competition. This can be

really profitable. You limit the number of customers you have because you're selling stuff at a premium, but you make more on a per sale basis. But customers were getting tired of paying for these more cups, and they were starting to see how expensive things were being sold for versus how much it costs to make them. So at one point people in Japan were proposing a boycott of color television's, and Panasonic was an industry leader in color TV in Japan, they would be adversely affected by this.

Uh In a way, things were coming home to roost. The Japanese public was finally starting to object to those high prices they've been paying for goods in Japan. Meanwhile, the US markets were reacting to Japanese companies undercutting prices in the market. Matt Sushida attempted to address this in numerous ways, including setting up a customer service division kind of in an effort to get ahead of issues. But more or less they were able to kind of weather

these storms, even though the concerns were legit. In ninety one, Matt Sushida would join the New York Stock Exchange while investigations were ongoing and charges were being made. The company continued to expand and in market more electronics, and two years later, in nineteen seventy three, Konosuke Matsushida would retire as chairman. He became more of an informal executive advisor. The new chairman of the company was Arataro Takahashi, who

had worked at the company since nineteen thirty six. He would only hold the position of chairman for four years, however, so in our next episode we'll learn about his replacement,

and that wraps up part two of this series. So in our next episode, we'll catch up with what's been going on at the company, including when it officially changed its name in two thousand eight to Pana Sonic, and we'll learn about a couple of other scandals that the company has weathered since the seventies, because there's some pretty

hefty ones. But that wraps up this episode. If you guys have suggestions for future topics, I should tackle, whether it's a company, a specific technology, a trend in tech, person in tech, anything like that. Let me know. Send me a message at Twitter. The handle is text stuff hs W and I'll talk to you again really soon. Text Stuff is an I heart Radio production. For more podcasts from I heart Radio, visit the i heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows.