The Founding of Panasonic

tech companies on this show. And when I think I should do a series about such and such a company, I'll then go and do a quick search and discover that, you know, I already did that. And that's the challenge of having a tech podcast that has more than twelve hundred episodes in the archives is that often I have already covered things that I thought I should cover. But one company I have never done a full rundown on

is Panasonic. Now I've talked about Panasonic and other shows, particularly ones about stuff like televisions, but I've never really sat down to research the company's history. So we're fixing that today now. For me, when I think Pana Sonic, I often think about c e S, you know, the Consumer Electronics Showcase. And that's because whenever I attended C. E. S. Panasonic was one of the companies that always had a

very large, impressive presence there. Panasonic traditionally has a long and comparatively narrow space in the central Hall at C. E. S. That would be the central Hall of the Las Vegas Convention Center, which has three massive exhibition halls North, Central, and South. Now when I say it had a narrow space, I just mean that really the space was longer than it was wide right. It wasn't a square, It was

more of a rectangle. Now, the central Hall typically has a few other heavy hitters in that space as well. In that general exhibition space, Sony has a booth in the central hall, Samsung and l G among others. Panasonic often has a spectacular stage area. It's just it's one of those booths that really grabs your attention as soon as it comes into your view. But I had no idea how old the company was or what sort of things led to it becoming a major player in the

electronics space. The company's story actually stretches back more than a century, though the company has only officially gone by the name Pana Sonic since two thousand eight. Before that, it was known as the Matsushita Electric Industrial Company. And it all begins with a guy named Kotosuke Matsushita and his business of producing attachment blugs. You know, we all

have humble beginnings, I suppose, or most of us. Kanasuke was born in eight in Japan, back when Japan was still an empire, and his family was fairly well off, at least initially it was. Konosuke was the youngest of eight siblings. His father was a landowner and one of the more influential members of the small community where the

family lived. But his father invested poorly and he lost much of the family's wealth due to speculation gone wrong, a theme we find quite often in the world of technology, but that's another story. The family moved into a nearby city in a small house, and when Konosuke was about to graduate elementary school or or the equivalent to elementary school, his family apprenticed him to a habachi store in Osaka,

which required him to leave his family behind. He actually had to get on a train and traveled to Osaka to work there. He cleaned the shop and he would clean the habachi and he was also in charge of looking after the shop owners children. But the Habachi shop wasn't long for this world and it went out of business. Konosuke was able to find new apprenticeships with a store that sold an exotic new import from the UK bicycles. Now.

It was during this apprenticeship that Kinda Suke learned how to use metalworking tools and stuff like lathes Kinasuke became interested in using tools to craft things, and he spent five years in his apprenticeship. He considered actually leaving the apprenticeship in order to further his education, but he actually got some advice from his father. His father said, Hey, you know what, don't worry about education so much. Stick

to this. You're learning a lot. You're learning about how to use these tools, you're learning the craft, you're learning about business. Skip the education. You're getting the education you need where you are. What you should do is just study this until you can have your own business. Then you can hire people who have an education. And I kind of dig that story. It has a charm to it, and it also kind of falls in line with so many other entrepreneurs who either didn't finish or never even

started further education and instead focused on their businesses. It's another one of those themes we see in tech now. That being said, dropping out of school is not exactly a shure fire way to go into, you know, a successful business. A lot of other factors have to come into play as well, but it is something that we've seen a lot of in the tech sphere. In nineteen ten, Konosuke joined the Osaka Electric Light Company. He was fifteen years old and electricity was just coming to Japan and

Konosuke was fascinated by it. He was kind of thrown into the deep end pretty early on. His first really big job was to work on wiring up a theater in Osaka, and this was an enormous undertaking. I mean you're installing wires in a very large building that has never had electricity. The whole project ended up taking half

a year. Konosuke became a bit of a taskmaster. According to the official Pana Sonic History, he led his team at age fifteen no less, to work very long hours in order to get this job done, and that effort took its toll on him. Konosuke's immune system was weakened, probably from all the exhaustion, and he actually contracted pneumonia, but fortunately he did recover by the time he was twenty two, Konosuke was married and had risen to the highest level he could at Osaka Light Company in his

in his division, that was a rank of inspector. That was the name of the job title. In his spare time, he developed an improved electrical socket, and he attempted to convince his boss that this would be a really great investment. It would be a great product, people would want it.

He'd they'd be able to make a bunch and sell a bunch, But his boss wasn't convinced, and so on June fifteenth, nineteen seventeen, he left to secure job at the Osaka Light Company to start his own manufacturing company, and he did this despite having next to nothing in savings. His workshop, which is being generous, was out of his own small home that he was renting now. And a lot of stories about startups I talked about how founders

got started out of a garage. That's another kind of common thread, but this is even more humble than that. Konosuke's home had dirt floors, and he had convinced two other Osaka Electric Light Company co workers to join him in his business, and then his wife's brother also signed on but the odds were stacked against Konosuke, and by the end of nineteen seventeen, poor sales convinced his two former co workers from Osaka Electric Light Company to just

jump ship. That left the business to Konosuke, his wife, and his brother in law, and things were pretty grim. But then the company received a giant order one thousand insulator plates for electric fans, and they were kept afloat. Konosuke took that money and immediately put it to work. He decided to rent out a two story home and move everything in there with the workshop downstairs. He was quite the upgrade from the small place he had rented with his wife, and he also created a new company

called Mattsushida Electric Devices Manufacturing Works. This was in nineteen eighteen, and it was this company that would eventually, over the course of a hundred years, essentially evolve into Panasonic, and so the company traces its history officially to nineteen eighteen. Nineteen eighteen is also the year that the First World War would come to an end. Japan had played an

important part in World War One. The Empire of Japan supported the Allied forces, and the young Japanese manufact tring industry had found an eager customer in European countries, which had a need for more material to support war efforts. Japan was undergoing a bit of an economic boom as a result, though this would have other consequences, but all that is outside the realm of this episode. My point here is that Japan's economic, social, and entrepreneurial situations we're

all evolving quickly. The rapid expansion created a challenge for Konsuke. Entrepreneurs were establishing new factories every single day, and those factories needed employees. And so while he was trying to grow his business and higher on new workers to fulfill bigger and bigger orders, it was also becoming difficult to

hold onto those employees. Because new businesses would open up, they would offer more competitive wages to fill out their own workforces, and so employees would often shift from one job to the next. It reminds me a lot of the early days of the dot com boom, where people were jumping ship left and right from one company to the next, getting more stock options and all that kind of mess. Konosuke took some unusual steps to build employee

loyalty and trust. He including forming an internal work organization called hoichi Kai, which means one step society. He and his twenty seven employees were all members of this society, and they would engage in different recreational activities such as sports.

He would also teach anyone in his company who was interested that the trade secrets of how they made stuff like insulating material that was a trade secret of his company, and typically companies at the time would keep that secret to maybe one or two special employees, but Konosuke wanted to build trust, so he shared it with anyone who was willing to learn. Kona Suke also designed a two way socket as well as an attachment plug and began to manufact acture and sell them out of his shop.

Electricity was becoming a more common utility in Japan, and Kona Sukes products were in great demand. He had a reputation for selling reliable components at a reasonable price. By nineteen twenty two, business had grown enough for Konosuke to commission a new factory and office, and he moved operations out of his own home for the first time, so now he was in an actual space. He was running specifically for it to be a manufacturing center, and he

kept on hiring people. This whole time too, and he also expanded operations. He established a sales team in Tokyo so that he could get his products into more wholesalers. Unfortunately, in September nineteen three, Tokyo and the surrounding area, including the port of Yokohama, were devastated by a massive earthquake, and there's the destruction was almost total in certain parts

of Tokyo. It was unprecedented. Kona Suke's two sales representatives were are unharmed, but they had nowhere to work anymore, so they returned to Osaka. It would take another year for the company to re establish its sales presence in Tokyo. Meanwhile, back in Osaka, Konasuke designed a new product that took some effort to sell. Like many in Japan, Konasuke used a bicycle to get around, and he also worked really long hours. But he had a heck of a time

riding his bicycle at night. The bike lamps at the time were mostly either oil lamps or they were candle lamps. These were not always reliable they could snuff out in mid ride. There were a few battery operated lamps at the time, but they were generally thought of as being of poor quality, like not as good as oil or candles, and most of those battery operated lamps could only light an electric lamp for three hours before you would have to replace the batteries, so they were seen as wasteful

and impractical. Konasuke wanted to create an improved battery powered bicycle lamp, so he got to work on it. Ultimately, he designed a lamp shaped kind of like a bullet, and it would hold three batteries and it lit an electric bulb for up to forty hours between thirty and forty He took his invention to wholesalers to try and convince them to order the lamp, but the reputation of battery powered lamps in general was so poor that no

one really gave him the time of day. They said, we can't sell these things anyway, no way he wants them, So he decided to take a different approach. He went to bicycle shops and he provided lamps to the owners to for free for them to to try out, to test, and then to to talk him up if they liked them, and they started to place orders directly with him through

his company, so if they liked the lamps. They would just order more from him, and then before long the wholesaler said, oh wait a minute, maybe we're a little too hasty. So they came back around and started signing deals. So how does a battery operated lamp work? I mean, this is tech stuff, after all, so I have to explain how a couple of pieces of tech work in the context of history. Right, And this is a really simple thing. This is one of the easiest circuits to understand.

So you've got your source of electricity. In this case, it's three batteries that are providing the electricity. And that also means that the current we're going to talk about is direct current, meaning the current is always flowing in the same direction. The circuit is essentially a one way street,

and as opposed to something like alternating current. Batteries have a negative terminal and a positive terminal, and that means that between the negative and the positive not physically between in the battery itself, but rather the difference in that negative and positive means there's an electric potential between the two, or voltage. So if you were to attach a conductive path to those two terminals that would allow current to low, then current will flow, and we describe current as moving

from positive to negative. Though you could talk about electricity as electrons flowing through a circuit, and in that case you're talking about negative to positive. So the flow of

current is opposite the flow of electrons. Thanks Benjamin Franklin. Now, if there's nothing more than a connective path, you know, just like copper wire, from one end of the battery to the other, the battery is gonna heat up, current's gonna flow, and then it'll just keep doing that until the battery goes dead, when all the electrochemical processes inside the battery slow down because the active elements have all been used up. But that would make no sense, there'd

be no point in doing that. You're just using up a battery. So we use batteries to do work. So we connect them to circuits, and those circuits have a load on them. A load in a circuit is a component that consumes electric power, typically so that it'll do something right. It's it's a load that typically corresponds with some sort of action. Not necessarily, there are components and circuits that don't, you know, actively do anything. But it's a good rule of thumb. So a lightbulb is an

electric load. Lightbulbs use electricity to flow through a filament that has a fairly high electrical resistance. That means a resistance to electricity flowing through that substance. And the electricity wants to flow through the filament, it has to go through the filament if it wants to get to the other end of the circuit, and it really badly wants to do that because of that electric potential that voltage.

So the electricity, assuming that the voltage is high enough and the electrical resistance isn't too high, we'll just hike up its metaphorical breeches and push through that filament despite the electrical resistance. But some of the electricity converts over into another form of energy, that of heat, and the filament heats up to the point that it incandesses or glows with a bright light. And I've talked a lot about incandessing in fairly recent episodes, so I won't do

that again here. Now. One thing I did not see while I was researching these bicycle lamps was whether Kona Suke had the batteries mounted in series or in parallel. Now, if I had to guess, I would say parallel, because the two arrangements have different effects. There are different reasons why you would do this. Each battery has a particular

voltage or electric potential between the two terminals. If you link batteries in series so that you have one right after the other, the the positive terminal on battery A is against the negative terminal of battery B, and the positive terminal battery B is against the negative terminal battery C. Then what you have managed to do is increase the

overall voltage by using these three batteries in series. So and that means you could do a job that requires more voltage, a harder job with three batteries and series

then you would be able to do with a single battery. Now, if you mountain batteries in parallel so that the terminals of the batteries are all connected to a common conductor, so all three positive ends are connected to the same conductor, all three negative ends are connected to the same conductor, you increase the capacity of the batteries how long they

can work before you need to replace them. You know, you can't do a harder job than one battery can, but you can do the same job a single battery can, but for longer. Kona Suke had begun to create full electronic products, branching out from the components he had been producing, and soon it would be off to the races. But before I get into that, let's take a quick break. Kona Sukes Company signed an agreement with Yamamoto Trade Company to sell these bullet shaped lamps under a brand name

called Excel, very much like the Spreadsheet program. Konosuke found the arrangement somewhat vexing, as he had ideas on how they should market the lamp, but Yamamoto's president, taken Nobu Yamamoto, felt that the lamps were no more than a passing fad, and so he shut down those ideas. In when Konosuke was thirty two, he introduced a new type of bike lamp.

This one was square in shape, and he called it the National Lamp, and National would become an important brand name within the company, not just for lamps, but for other products as well. Now, Yamamoto claimed that the marketing agreement they had put in place for the Excel lamp also applied to the National lamp, and he said, if you want to market this, that's fine, but you gotta pay me ten thousand yen to get the marketing rights,

because right now I hold those marketing rights. So Kona Suke paid it off and the National brand would be under his control and he could market it the way he wanted to. The same year, he created a new division within his company to produce thermal products, that is, electronics that produce a lot of heat, like electric irons for ironing clothes. Konosuke saw an opportunity in Japan's The electric appliances at that time in Japan were really a luxury,

and therefore they were also a very small market. Only a tiny slice of the overall population of Japan could even afford to buy them. Konosuke wanted to take aim at a larger market. He wanted to produce lower cost appliances for people who weren't ludicrously wealthy, and the first product his company made with this goal in mind was

the National Super Iron. Remember when I said the filaments in a lightbulb generate heat due to electrical resistance, and then they luminess or in candath, I should say, well, an electric iron does a similar thing with heating coils. The coils have a high electrical resistance and they heat up as current passes through them, and the same thing is true for stuff like toasters and electric stovetops, or at least the type of electric stove types that have

the electric coils on them. With irons, the heat from the coil typically transfers to something like a base plate, and that's the actual surface you use to iron your wrinkled clothing. You wouldn't want to use the heating coils themselves,

you'd probably end up scorching your clothes. Kona Suke put a man named Tetsugio Nacao in charge of the new electrothermal division, and the goal was to set up a mass manufacturing process in order to bring the cost of production down on a per unit basis, which means they could market the super iron for less money than competing irons on the market. The danger was that the company could end up producing way more irons then the market would support. But Konosuke felt that if price low enough,

a lot of people in Japan would buy these. They just couldn't afford them as they currently stood. But this was a big risk. I mean, setting up a mass manufacturing facility is complicated and it is expensive. If it didn't pay off, his company would have been in a really tough position financially. The goal was to sell the irons for three point to yen. Now that's a tiny amount, right, except that at the time, the average starting salary for a teacher in Japan was fifty yen a year, so

three point two was a significant amount. However, it was

still lower than the competing products on the market. To be able to reach that price, his company was going to need to produce ten thousand irons per month, and at the time, Kona Suke's company had kind of estimated that demand for electric irons was capping out somewhere around one hundred thousand units in a year, so that would mean Konosuke's company would be producing more supply than the demand called for a hundred twenty thousand a year versus

one hundred thousand, So this was risky, but the gamble paid off. The product was a market success, easily justifying the investment in the mass manufacturing process and serving as

a model in Japanese business and manufacturing. By the end of nineteen seven, the company was selling an electric foot warmer, which used some of the same technology as the company had in their irons, and Also, Nico became the head of a research and development division, a new R and D division within the company, with the goal of working on new emerging technologies that could find their way into

future products. In the early nineteen thirties, radio was coming to Japan, but like other electronics, radio sets were really expensed of and this wasn't just in Japan. Radios were expensive everywhere and often they were enormous pieces of furniture because this was before the invention of the transistor, so

they were using vacuum tubes as amplifiers. Kona Suitcase Company developed a three tube radio and he entered the radio into a competition that was being held by the Tokyo Public Broadcasting System, and the radio set he entered took home first prize. Kona Suke also did something fairly remarkable. He purchased the rights to two radio patents. Now that's not unusual. Companies do this all the time. So sometimes companies will, you know, file a patent and get awarded

a patent. Sometimes companies will license patents. Sometimes companies will sell patents, and the patent can act just like any other piece of property. It will pass from one person to the next, so even though Kona suit Case Company didn't come up with the patents themselves. By purchasing them, it was as if they were the ones who had written those patents in the first place. But here's the remarkable part of it. He then released those two patents

to the public domain. Now that is unusual, and he said that his goal was to encourage growth in the radio industry in Japan. And in many ways, this kind of hearkens back to the days when Konasuke would supply bicycle shops with free lamps to help test and promote the technology. In nineteen thirty two, Konosuke established the company's guiding principle, the one that would hold sway during his leadership.

And it's kind of astonishing, particularly if we view it through the lens of a post Jack Welch world of business. And of course, we should retain our ability to think critically and consider that this guiding principle might not always be applied, or it might only be applied at a surface or superficial level. But hey, I hear you saying, what the heck was this guiding principle? Well, I'm gonna quote Konosuke. According to Panasonic's own history, and this is

what he said. Quote. The mission of a manufacturer is to overcome poverty by producing an abundant supply of goods. Even though water can be considered a product, no one objects if a passer by drinks from a roadside tap. That is because the supply of water is plentiful and the price is low. Our mission as a manufacturer is to create material abundance by providing goods as plentifully and

inexpensively as tap water. This is how we can banish poverty, bring happiness to people's lives, and make this world a better place. End quote. Now, I don't know about you, but to me, there's a pretty big gap in his philosophy and what we would see in business in general around the nineteen eighties, the nineteen nineties and later, with companies turning towards focusing on shareholder value you above everything else.

And again, I don't want to go so far as to claim that Panasonic has kept this idea as the central core component of its business practices, but I think you know that would be disingenuous. I just I dig the idea of using success in order to help others, with the ultimate goal of banishing poverty. That's a great goal. And that might be because I just watched so much Mr.

Rogers when I was a kid. So whether or not the company succeeded in this or was sincere in this, I can't really speak to, but man, I do love that philosophy. Anyway, Let's get back to the history. The company was growing more complex, and so in nineteen thirty three, Konosuke formally organized his company into three branches, each capable of doing business as if it were a separate entity. One division oversaw batteries, one oversaw radios, and the third

oversaw electro thermal products. And to those divisions had other stuff that they handled as well, But the goal was to make the head of each division have the authority and investment to make the right decisions for their particular branch. Kanasuke recognized that his company as a whole had really grown quite large and too complex to handle as if it were a single, unified entity, because a decision that might be great for one part of the company might

be a setback for another. So this gave more flexibility to things now. That July, the company expanded into a new factory northeast of Osaka. UH had a lot more employees at this point, and it was producing more than two hundred different products and growing in importance in the Japanese economy. In ninety four, Konosuke oversaw the opening of an employee training institute. Japanese students could go there and attend a three year course where they would learn and

practice skills in business and engineering. The company also obviously would benefit it from this relationship as well. UH In fact, it could be a very effective recruiting program for promising students to be brought into the workforce full time. Now, what came as a surprise to me was to learn that it wasn't until nineteen thirty five, which was seventeen years after Konosuke founded his company, that he actually incorporated it.

It became Mattsushida Electric Industrial Company Limited. He also began to develop overseas markets, which was a bit of a novelty in Japan, particularly in the electronics manufacturing sector. Konosuke hoped to expand sales to countries around the world. But if you're keeping track of the years, you realize we're getting up to some years where there was some major conflicts that would really throw a whole monkey wrench into that plan, so Japan and China went to war in

July ninety seven. That whole story is incredibly complex, aided and is outside the scope of tech stuff. But the following year, met Sushida's R and D division produced the company's first television set prototype with a twelve inch screen. In ninety nine, the set was able to display broadcasts that were originating from the Tokyo Broadcast Center, and the company also showed off this set to the general public

at a special innovation exhibition. There were high hopes that television would play a huge part in the following years, but that also got sidelined because in nineteen forty, Japan entered the larger conflict of World War two, and the United States would impose sanctions on Japan as a result of that, severely restricting Japan's access to steal kana Suke was concerned that this restricted access to raw materials would have a negative impact on the products that his company

was manufacturing, and he actually spoke quite passionately to his employees that they make you or that they don't compromise on quality. By ninety one, Kanasuke was obligated to turn his company's capabilities towards fulfilling military contracts. I don't know what Kanasuke's opinion was of Japan's stance in World War Two. It's kind of irrelevant because whether he chose eagerly to fulfill military contracts or he was actually compelled to by

the government, the outcome is the same. The company, Matt Sushieda, began to build stuff for the Japanese military. In fact, they founded two new companies to do this, the Matt Sushida Shipbuilding Company and the Matt Sushida Airplane Company, and they built wooden ships and wooden planes, like three planes and a couple of dozen ships. Now, to say that the war was disruptive would be an understatement. It was certainly disruptive for Matt Sushida. The company had never were

made this kind of stuff before. They were not familiar with it. They had to create all new processes and facilities to do it, They had to train in new skills to do it, and it took a lot of their focus off of the things that the company had been doing as their prime business. By the end of World War Two, upon Japan's surrender, the company had lost thirty two factories and offices, mostly in Osaka and Tokyo. Their home office was unscathed. The prime office in Osaka

was still untouched. The company's employees, at a peak during World War two, reached twenty six thousand, but then thousands of those employees left after Japan surrendered. Most of them had who had left were drafted into working for the company um as part of the war effort, and then some actual matt Sushida employees also resigned, making matters worse at Sushida, like a lot of Japanese companies, was deeply in debt after the war. The company, again, you know,

they had been forced to really produce military vehicles. If they had been able to choose, I'm sure they wouldn't have gone that route. They had never done it before. It was a very expensive thing for them to have to try and switch over to and they were counting on the government to you know, compensate them for it. But then they were on the losing side and the government didn't exist anymore. So now with the Japanese government defunct,

there was no one to pay those expenses. The company had to shoulder it itself, and Mattsushida had been forced to expand and then shoulder all that debt, and the company tried to pivot a little bit. They began to manufacture stuff like prefabricated wooden houses and even wooden wagon wheels because they had all this infrastructure to produce wooden stuff,

but there was no need to produce military vehicles. In fact, they wouldn't be allowed to the day after Japan's surrender, Konosuke held a meeting and said that the company was going to get back into producing consumer products, but there was a little thing standing in the way, and that would be the United States military. See, many of the businesses in Japan were ones that were under scrutiny from

the US government. A lot of them had been controlled by a single family for multiple generations, and those families were holding onto these companies in a way as kind of establishing and holding onto power. The US forces directed those companies to kind of abandon that approach, to either break apart or to change leadership, and they identified Matt Sushida as one of those companies, and this really offended Konosuke because he had founded the company himself. This was

not a generational thing. He actually was the founder and The company wasn't even thirty years old yet at this point, but Matt Sushida had built vehicles for the Japanese military during wartime, and so the company had a really big target painted on it. As a result, the US forces were demanding that Konosuke stepped down and for someone else to take control. Konosuke, however, had won his employees loyalty.

He had demonstrated his own commitment to them. He had helped them unionize, which is something that you don't typically see a business owner doing, and so the employees protested the directive even as Konosuke prepared to step down so his company could survive. UH. Several retail stores also joined in the protests, because these stores were stores that carried

the products the company made. Some of his other companies or companies that had worked with Matt Sushida, also ended joining this protest, and so, faced with resistance and demand that Konosuke was the driving force behind Matt Sushida, the US government reverse their course. They decided that he did not need to step down. And it sounds like I'm talking about something that was a fairly fast process, but it wasn't the demand he stepped down was issued in

nineteen forty six. The reversal did not happen until the middle of nineteen seven, and the push to designate the company as a family controlled entity wouldn't be reversed until nineteen fifty. One. Person who left the company around this time was Konosuke's brother in law. He had been with

the company since its founding, but he stepped down. Some people say he stepped down as an effort to kind of take the pressure off of Konosuke if he left, this brother in law, if he left, then everything maybe would be okay. But he went on to found a different manufacturing company called Sanio. In the meantime, Mattsushida saw several divisions and acquisitions removed from their company, and as we all know, this would not be the into Panasonic.

And when we come back, I'll talk about how the company went through the recovery process post World War Two. But first let's take another quick break the restrictions Matsushida was under post World War Two. We're pretty tough. The company was not allowed to borrow money. This was actually done kind of on a national level in Japan. It wasn't just singling out the company. It was all in an effort to kind of stave off inflation, but Matsushida

also had to pay employees wages and installments. They couldn't just pay everybody in full every payday. There wasn't enough cash on hand to do that. On top of that, despite streamlining workflow and really just saving wherever they could save, the company was forced to operate factories for half days. They just couldn't afford to run them full time. By nineteen fifty, the company was employing four thousand, four hundred thirty eight people, but in March of that year, five

hundred sixty seven of those people would get laid off. However, something else happened that brought about a new period of productivity and prosperity in Japan. And I wish I could say that it was something to celebrate, but no, it's not. It's war again, but this time it's the Korean War. The Korean War started on June twenty five, nineteen fifty, when North Korean forces backed by the Soviet Union invaded

South Korea. China would also side with North Korea and the United Nations and the United States would side with South Korea, and the Japanese economy rebounded demand in the region was calling for Japanese companies to ramp up production. In nineteen fifty one, Konosuke decided to do a grand tour of the United States and also of Europe to learn how companies operated in other countries, to learn more

about the electronics industry as a whole. All he saw a need to become a global citizen and to expand his company's operations on a more grand scale. And after the first of two US tours in nineteen fifty one, Kana Suke came back to his company and told his engineers about this cool thing he wanted them to make. He wanted them to build a washing machine. He had seen washing machines in the United States and he felt that there'd be a good market for them in Japan.

This turned out to actually be a pretty big request. It was something that the engineers had never really seen before, and they were depending upon materials that had been produced in other countries, so there was a language barrier when they were looking at the various manuals and descriptions of these things, and they sort of had to suss out how to build a washing machine, and not just the machine, but the components that would make up that machine, stuff

like various seals and switches and motors. However, eventually they did succeed. The company created an agitator washing machine called the m W one oh one, which could hold up to two kims of clothing or about four and half pounds or so. And my favorite bit about the washing machine story is that the quality assurance team was perplexed as to how to test these devices once they were finished.

I mean, you know, you would throw a sullied cloth into them to see that it would actually come out clean. But the testers were upset because there was no standard dirty cloth they could rely upon. They didn't have a set dirty cloth that would be a reliable test and a completely consistent and repeatable test. So you just had to get a cloth and get it dirty. But you know what, if one one on one cloth is too dirty or one wasn't dirty enough, and you don't know

if it really worked, it drove them nuts. The company also began to re establish its sales network, which had been essentially wiped out after World War Two, and initially they focused on building out the state network in Japan itself, but the company would also play a big part in establishing a new effort to get an autonomous economy in

Japan and then expand beyond it. Kanasuke had another ambition upon his return from his tour, which was to find another company, an electronics company that he could partner with to gain some technical guidance. So find someone who has already experienced in the sector and then partner with them to learn from them. Ultimately, after a lot of negotiations and back and forth, he chose the Dutch company Phillips, which had started off selling lightbulbs and at this point

was already a large electronics company. Together, they formed a new subsidiary called Matsushida Electronics Corporation or m e C in nineteen fifty two. Around that same time, Matsushida Engineers also built a new black and white television set, the seventeen K five thirty one, under the National brand. This had a rectangular screen, which kind of set it apart

from other early television sets in Japan. Most of them had circular screens, which was you know, weird to us now through rectangle being the more common appearance, and it was technically a new product, but it was also extremely expensive, so it wasn't like they were selling a ton of these, not a lot of people could afford it. In nineteen

fifty three, Matt Sushida established the Central Research Laboratories. This was a dedicated R and D facility that took what engineers were learning through their partnership with Phillips and then putting it to practical use. And the group developed new products as well as worked on ways to automate production to make the manufacturing process more safe and efficient and cheap.

And this wasn't just for the sake of innovation. Towards the end of nineteen fifty three, the Japanese economy was showing signs of slowing down a lot, and kind of Suke saw a need to create more efficient production systems in order to stay a viable business US without massive cutbacks. The company also began to develop dry cell batteries. Starting in nineteen fifty four, they introduced the hyper brand. But that kind of begs the question what the heck is

a dry cell battery? And yes, I know I technically used begs the question wrong. Well, remember that a battery is a way to store energy, and the way it releases energy is to have chemical reactions that go on inside the battery, and part of that chemical reaction means that it converts some of that stored chemical energy into

electrical energy. And in the early days of batteries, batteries were wet cells, and that means the batteries themselves had liquid components inside them, and sometimes they could slash out if you weren't careful. And sometimes those components are toxic or corrosive, like sulfuric acid type stuff. You don't want

that to get on you. That's a bad thing. But a German chemist named Dr Carl Gastner created the first dry cell battery, which uses dry components rather than liquid ones, and this was all the way back in six However, producing them in large quantities wasn't easy at first. Originally, Konosuke was looking to partner with an American company to develop dry cell batteries from Matsushida, but ultimately he decided against that and the company's own engineers developed their version

of the dry cell battery. And in general these are safer and more convenient than wet cell style batteries. Like with a wet cell battery, you can't just mount the battery any which way, right because if you turn it upside down, the liquid can come out, whereas the dry cell battery, it doesn't matter the orientation of the battery. It's gonna you know, all the components are just gonna stay where they're at, So it's better in that regard.

The company also produced its first electric refrigerator, the n R S Threete. So let's remind our cells have electric fridges work. It's tech stuff after all, and we're about to wrap up, don't worry. So in the very old days, you had an ice box, and that was literal. You had a box and it had a compartment where you would put a big old block of ice and that would keep the neighboring compartment cool. But it wasn't exactly

convenient and you had to replace the ice regularly. So how does something running on electricity keep things cool has to do with physics, and those physics rely on a compressor and a valve and some heat exchange coils. But that doesn't really explain things, doesn't, all right, So let's imagine this. You've got a continuous path, You've got a compressor on one end of that path, and you have an expansion valve on the opposite end of the path and on either side. So think of those the top

and bottom. Let's say that the compressors at the top, the expansion valves at the bottom, And then you've got a coil on your left and a coil on your right. And we'll say the coil on your left is the one that represents the coil that inside a refrigerator, and the coil on the right is one that represents the coil that's outside the refrigerator. Both of these are called heat exchange coils. The one that's on the outside is

also known as the condenser. So ultimately the whole idea is to transfer heat from the inside of the fridge and dump it on the outside of the fridge. The compressor's job is to circulate the refrigerant through the system and to compress it. The refrigerant is made of something that has a really low boiling point, like below the freezing point for water, So this is something that we would typically encounter as a gas, but uh, you want to get it low enough so that you can actually

turn it into a liquid. The compressor pumps gas from the fridge side, the cold side, and it compresses that gas right and and pressurizes it, and this also causes the gas to heat up. As you pressurize a gas, it's temperature increases, and this hot refrigerant gas then moves into the heat exchange coil on the outside of the fridge, and that's where the heat will dissipate. Typically it transmits the heat to a series of thin fins and then

the heat just uh dissipates into the environment. The gas inside the coil starts to condense, and it condenses into a liquid that's still held under high pressure. The pressure allows the refrigerant to stay a liquid even though it would normally boil off into a gas, because it was still warmer than what it's typical boiling point would be.

The refrigerant then will flow through the expansion valve, and that maintains the difference in pressure between the condenser side, which is again high pressure that's where the compressor is pumping refrigerant into, and then low pressure on the fridge side. So on the other side, the expansion valve is that low pressure coil, and when the high pressure liquid passes through the expansion valve, it immediately boils off, and as

it boils off, the temperature drops drastically. Uh, it drops down to whatever the boiling temperature is for that refrigerants. So since the boiling temperature is below zero, that means the coils go to below zero, and then that cold refrigerant can start to absorb the heat from inside the fridge, again, carrying the heat from the food that's in the fridge away, and the whole process starts up again. Mattsoshida's fridge was part of the National line of products, and it was

an expensive appliance. In fact, the company itself described it as quote highly acclaimed by people in high income households. In the quote by Mattsushido was starting to market radios to the United States, which was a big step for the Japanese company. The radio market in the US was already a mature one. On top of that, American consumers weren't really familiar with Japanese brands that much. Japan had not gained a reputation for electronics in the unit US

in the nineteen fifties. It was going to be a really tough battle. And you know, we haven't even reached the point where Matt Sushida introduced Panasonic as a brand name. But we've got to save some stuff for the next episode, right, and so in our next episode, we will continue the story of Panasonic, including the introduction of the Panasonic brand and leading up to what the company has done in

more recent decades. But in the meantime, if you have suggestions for future topics of tech Stuff, whether it's a company, a technology, a person in tech, a trend in tech, anything like that, let me know. Reach out to me on Twitter. The handle is tech 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. H