Panasonic Boosting Sales By "Encouraging" Employees To Buy Their Products

[Jason Dunn]

<div class='os_post_top_link'><a href='http://business.timesonline.co.uk/tol/business/markets/japan/article5723942.ece' target='_blank'>http://business.timesonline.co.uk/t...icle5723942.ece</a><br /><br /></div><p><em>"Its electronic gadgetry is gathering dust on the shelves of high street stores, nobody is buying new fridges and the mountain of unsold plasma televisions is growing by the day. However, in desperation, Panasonic has hit on the perfect counter-attack against the consumer slump: it has ordered every member of staff to go out and buy &pound;1,000 of Panasonic products."</em></p><p><img src="http://images.thoughtsmedia.com//dht/auto/1234565487.usr1.png" style="border: 0;" /></p><p>So you're Panasonic, and in rough economic times you're hard pressed to boost profits. So what do you do? Put the squeeze on your employees and "encourage" them to purchase about $1466 USD worth of Panasonic products. Oh, and this is after slashing salaries and bonuses. Having your salary cut is better than losing your job, but for a company to apply pressure to their employees to burn through their savings to purchase company products? That crosses the line into corporate abuse of power.</p>

[Felix Torres]

Reprehensible? Yes.
Unheard of? No.

UAW workers have been known to have trashed "foreign" cars found at factory parking lots and the union (not management) encourages its members to "buy american" (even if it often means canadian minivans). :)

There is a fine line between corporate loyalty and intimidation and it, sadly, has a tendency to vanish during tough times. Which Panasonic (as well as most japanese manufacturers) are currently facing. The aim, btw, isn't to increase profits, though, but to reduce losses:
http://www.thestreet.com/story/10461804/1/panasonic-to-cut-15000-jobs-sees-loss.html?puc=_cnnmoney&cm_ven=CNNMONEY&cm_cat=Free&cm_pla=Feed&cm_ite=Feed

Points to consider:

1- Japanese consumer electronics company got blindsided by a massive sales collapse in november/december which, since they batch-produce most of their products, means their product pipelines are clogged with product; in some cases, as much as a year's worth.
2- Panasonic is heavily-invested in plasma displays both for its own products and for partners; with Pioneer dropping out of the TV business and Vizio out of plasma displays, that leaves Panasonic holding the bag for a lot of excess capacity in plasma panels.
3- Panasonic is not a particularly strong player in LCD displays.

Desperation often overrides common sense and decency.
And panasonic is not alone in urging its employees to buy their own products.

Times are tough and getting tougher.
Keep an eye on Sony and Hitachi; they are closer to the edge than even Panasonic. Odds are, most of the big asian companies are going to have to leave many of their "peripheral" businesses and redefine themselves as specialists rather than generalists.

[Jason Dunn]

I've missed you Felix - a thoughtful response as always. :)

with Pioneer dropping out of the TV business and Vizio out of plasma displays...

Wow, I had no idea Pioneer was dropping out of the TV business - that's especially odd considering their plasma displays were rated at the top by pretty much everybody. Why didn't you submit this as news? You know we rely on you. :D

[Felix Torres]

The rumors about Pioneer surfaced last week out of Japan but they were just rumors. Confirmation didn't arrive until this week:
Pioneer Unplugs Its TV Business - WSJ.com (http://online.wsj.com/article/SB123442023382276577.html?mod=googlenews_wsj)

Vizio made its announcement earlier this week:
Another Manufacturer Drops Plasma - Gadgetwise Blog - NYTimes.com (http://gadgetwise.blogs.nytimes.com/2009/02/11/another-manufacturer-drops-plasma/)

Pioneer, Vizio exit plasma HDTV market: Consumer Reports Electronics Blog (http://blogs.consumerreports.org/electronics/2009/02/pioneer-confirms-tv-business-exit.html)

Technically this leaves just Panasonic and the Koreans in the plasma business but LG is converting one Plasma facility to solar cells:
LG turns panel plant to solar cell production line (http://www.eetasia.com/ART_8800549917_480200_NT_a939adf8.HTM)

...and looking to sell the rest. (Good luck with that!)

Hitachi, of course, cut back manufacturing capacity last year:
Hitachi to clip plasma panel production | Markets | Markets News | Reuters (http://www.reuters.com/article/marketsNews/idUST2182520080918)

So its really down to Panasonic and a less-than enthusiastic Samsung.
While some people are shocked to see Pioneer bow out, since the Kuro elite panels are so highly rated (and the top of the line Vizio PDPs were also highly regarded) the handwriting has been on the wall since last fall, when LCD manufacturers started showing off their latest LED backlit panels that can cheaply match or better the color gamut and black levels of even the best PDPs.

The Vizio mentioned in the NYT link above sounds like something really worth looking into. (Should be a good match for the Oppo BD player due by then.)

Now, if only somebody would drop that tech on an affordable 65" panel... :cool:

(As for me, I'm still out here; just been spending more time in the ebook arena. Things could get real interesting there by the second half of this year.)

[Yukster]

That was about the most biased article I read in a long time. Here's are more objective article without all the hyperbole http://search.japantimes.co.jp/cgi-bin/nb20090214n2.html

This was just for middle managers and executives, not for ordinary workers.

Actually, I think it was 100,000 Yen, which is about $1100 USD, so its not where close to the 1000 euro mark that the article was stating. Also, if you look at the buying power/worth of the Japanese yen, 100,000 yen is NOT that much.

To put it in another perspective, 100,000 yen is about what it would cost for a two people to go away for the weekend, using the bullet train.

I would buy 100,000 yen worth of products than to have my salary cut by that amount, wouldn't you? Also, if your work for Panasonic and is going out buy Sony, Toshiba, or another competitors products at this day and age, then you probably deserve to get fired.