July 20, 2020 • 50 mins
The Japanese electronics company Panasonic is more than a century old. In this episode, we learn of its founding in 1918, how the company survived World War II, and how its founder positioned his company to enter the global marketplace in the 1950s.
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Episode Transcript
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Speaker 1 (00:04):
Welcome to text Tuff, a production from my Heart Radio.
Hey there, and welcome to Tech Stuff. I'm your host,
Jonathan Strickland. I'm an executive producer with I Heart Radio
and I love all things tech. And you know, guys,
it has been a while since I have done a
(00:24):
deep dive on the history of a tech company. And
that's partly because I've covered, you know, a lot of
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
(00:46):
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
(01:08):
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
(01:33):
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
(01:55):
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
(02:16):
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,
(02:37):
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
(02:58):
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
(03:18):
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,
(03:42):
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
(04:04):
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
(04:26):
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
(04:48):
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
(05:09):
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
(05:33):
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
(05:55):
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,
(06:18):
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,
(06:41):
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
(07:01):
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
(07:23):
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
(07:47):
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.
(08:07):
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,
(08:33):
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
(08:55):
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
(09:16):
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
(09:37):
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
(09:59):
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
(10:22):
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
(10:45):
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
(11:07):
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
(11:29):
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,
(11:50):
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,
(12:11):
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.
(12:32):
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
(12:53):
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
(13:13):
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
(13:34):
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
(13:55):
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.
(14:16):
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
(14:36):
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,
(15:00):
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,
(15:22):
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
(15:45):
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
(16:06):
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
(16:28):
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
(16:50):
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
(17:10):
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
(17:32):
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
(17:54):
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,
(18:15):
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
(18:37):
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
(19:00):
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,
(19:22):
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
(19:45):
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
(20:06):
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,
(20:29):
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
(20:50):
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
(21:10):
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,
(21:32):
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
(21:54):
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
(22:15):
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
(22:40):
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
(23:03):
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
(23:26):
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
(23:48):
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
(24:10):
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.
(24:31):
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
(24:52):
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
(25:12):
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
(25:35):
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
(25:58):
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
(26:21):
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,
(26:43):
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
(27:03):
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.
(27:25):
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
(27:48):
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.
(28:11):
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
(28:32):
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
(28:54):
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
(29:16):
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
(29:38):
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
(30:00):
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
(30:21):
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
(30:43):
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
(31:06):
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
(31:26):
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
(31:48):
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
(32:10):
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
(32:31):
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
(32:52):
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
(33:13):
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,
(33:33):
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,
(33:55):
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
(34:17):
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
(34:38):
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,
(35:00):
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.
(35:20):
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
(35:43):
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
(36:06):
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
(36:26):
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
(36:47):
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
(37:18):
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
(37:41):
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
(38:04):
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,
(38:27):
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
(38:50):
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,
(39:11):
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,
(39:33):
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
(39:57):
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
(40:17):
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
(40:38):
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
(40:58):
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
(41:18):
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
(41:41):
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
(42:02):
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
(42:23):
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.
(42:46):
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
(43:09):
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
(43:30):
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
(43:53):
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
(44:15):
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
(44:35):
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
(44:58):
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
(45:21):
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
(45:41):
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
(46:02):
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
(46:23):
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
(46:45):
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
(47:07):
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
(47:29):
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
(47:51):
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
(48:14):
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
(48:39):
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
(49:00):
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.
(49:21):
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,
(49:43):
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,
(50:05):
or wherever you listen to your favorite shows. H
Welcome to text Tuff, a production from my Heart Radio.
Hey there, and welcome to Tech Stuff. I'm your host,
Jonathan Strickland. I'm an executive producer with I Heart Radio
and I love all things tech. And you know, guys,
it has been a while since I have done a
(00:24):
deep dive on the history of a tech company. And
that's partly because I've covered, you know, a lot of
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
(00:46):
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
(01:08):
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
(01:33):
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
(01:55):
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
(02:16):
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,
(02:37):
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
(02:58):
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
(03:18):
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,
(03:42):
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
(04:04):
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
(04:26):
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
(04:48):
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
(05:09):
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
(05:33):
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
(05:55):
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,
(06:18):
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,
(06:41):
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
(07:01):
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
(07:23):
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
(07:47):
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.
(08:07):
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,
(08:33):
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
(08:55):
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
(09:16):
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
(09:37):
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
(09:59):
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
(10:22):
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
(10:45):
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
(11:07):
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
(11:29):
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,
(11:50):
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,
(12:11):
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.
(12:32):
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
(12:53):
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
(13:13):
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
(13:34):
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
(13:55):
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.
(14:16):
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
(14:36):
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,
(15:00):
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,
(15:22):
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
(15:45):
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
(16:06):
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
(16:28):
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
(16:50):
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
(17:10):
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
(17:32):
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
(17:54):
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,
(18:15):
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
(18:37):
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
(19:00):
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,
(19:22):
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
(19:45):
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
(20:06):
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,
(20:29):
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
(20:50):
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
(21:10):
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,
(21:32):
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
(21:54):
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
(22:15):
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
(22:40):
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
(23:03):
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
(23:26):
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
(23:48):
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
(24:10):
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.
(24:31):
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
(24:52):
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
(25:12):
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
(25:35):
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
(25:58):
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
(26:21):
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,
(26:43):
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
(27:03):
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.
(27:25):
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
(27:48):
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.
(28:11):
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
(28:32):
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
(28:54):
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
(29:16):
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
(29:38):
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
(30:00):
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
(30:21):
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
(30:43):
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
(31:06):
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
(31:26):
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
(31:48):
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
(32:10):
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
(32:31):
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
(32:52):
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
(33:13):
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,
(33:33):
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,
(33:55):
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
(34:17):
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
(34:38):
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,
(35:00):
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.
(35:20):
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
(35:43):
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
(36:06):
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
(36:26):
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
(36:47):
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
(37:18):
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
(37:41):
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
(38:04):
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,
(38:27):
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
(38:50):
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,
(39:11):
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,
(39:33):
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
(39:57):
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
(40:17):
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
(40:38):
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
(40:58):
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
(41:18):
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
(41:41):
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
(42:02):
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
(42:23):
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.
(42:46):
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
(43:09):
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
(43:30):
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
(43:53):
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
(44:15):
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
(44:35):
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
(44:58):
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
(45:21):
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
(45:41):
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
(46:02):
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
(46:23):
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
(46:45):
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
(47:07):
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
(47:29):
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
(47:51):
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
(48:14):
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
(48:39):
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
(49:00):
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.
(49:21):
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,
(49:43):
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,
(50:05):
or wherever you listen to your favorite shows. H
TechStuff News
Hosts And Creators
Oz Woloshyn
Karah Preiss
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