The new head of Matsushita Electric Industrial Co vowed to keep the Japanese electronics maker growing yesterday by continuing to cut costs and focusing on profitable products.
Fumio Ohtsubo, whose appointment as president of Matsushita, which makes Panasonic-brand products, won shareholder approval last month, said he hopes to continue the cost cuts started by his predecessor and put the company on track toward the next stage of bigger sales.
But he did not give specifics on a long-term profitability target but said he hoped to lift the operating profit margin, now at about 5 percent, higher. He acknowledged some of the company's current products were losing money.
"We want to make Matsushita a fighting company," Ohtsubo said, adding that the company will boost overseas production and deliver products that control significant market share.
"We don't want to deliver no action, or end up being all talk," he said.
Ohtsubo, 60, a production expert, has been credited with helping lead Matsushita back to improved profit on the back of healthy sales of plasma display panel TVs, digital video disk recorders and other gadgets, re-emerging from an electronics slump that battered the earnings of nearly all Japanese electronics companies several years ago.
Matsushita posted its worst loss since its founding 80 years ago in fiscal 2001. Ohtsubo's predecessor, Kunio Nakamura, who became president in 2000, embarked on a cost-cutting overhaul and concentrated on key profitable products to nurse Matsushita back to health.
Ohtsubo said that he saw his challenge as keeping that recovery going. The company will gain competitiveness by cutting costs from the initial design, he said.
"My mission is to achieve growth -- to take the company to that next stage," he said.
Among the products Matsushita has in mind as strategic areas to boost midterm growth are flat-panel TVs, businesses for the Internet-connecting home, electronics products for cars and computer chips.
Ohtsubo said the company will make "aggressive investments" in plasma displays and computer chips, although he said he was not prepared to announce concrete projects yet.
"We have pursued both destruction and creation," he said, referring to the company's efforts to both break from its past and achieve growth.
Cheaper Asian rivals have been posing a threat to the earnings of the once-powerhouse Japanese manufacturers, such as Sony Corp, which is also struggling to restructure its business.
One reason for Matsushita's recent success was that it was quick in coming out with plasma TVs, a category in which the firm commands leading global market share.
Ohtsubo -- who oversaw DVD recorders, displays, portable music players and other audiovisual goods before getting picked as president -- had long been seen as a candidate for the next president.
Joining Matsushita in 1971, Ohtsubo has widespread respect at the company for steering its booming TV business.
He previously worked in the company's Singapore unit and boasts extensive experience in the audiovisual sector.
Matsushita has been investing aggressively in producing computer chips and flat panels to keep its edge in more expensive products that can keep it ahead of cheaper rivals.
For the fiscal year ended March 31, Matsushita's profit nearly tripled to ?154 billion (US$1.3 billion) on a 2 percent jump in sales. For the fiscal year through next March, it is forecasting a 23 percent surge in profit to ?190 billion.
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