Panasonic's plasma pusher

With company on comeback trail, Yoshi Yamada, CEO of Panasonic North America, is making plasma TVs its biggest focus.

When he took over as CEO of Panasonic's North American division in mid-2004, one of the first things Yoshi Yamada did was eliminate the executive parking spots. He then demolished the floor that held the executive offices and replaced them with cubicles.

It was part of a plan to make Panasonic--once one of the largest names in the business in North America--a wiry competitor once again. Panasonic in Japan had already undergone a massive overhaul.

So far, the changes in the U.S. seem to be working. Its TV sales are booming.

Yamada, who worked at Panasonic in the United States and Japan for decades, sat down with CNET earlier this month at the Consumer Electronics Show in Las Vegas. He discussed the future of plasma TVs, Panasonic's camera drive, and why some U.S. companies just don't understand the consumer electronics market.

Q: Panasonic has undergone some massive changes in the past four years, and most of these are a mystery to U.S. readers. Can you give us a quick overview of what has happened?
Yamada: In Japan, when Mr. Nakamura became president of the company, it was 2001. (Kunio Nakamura is now CEO.) We did a major reorganization and restructuring. We changed the whole organization of the company. It was very, very painful. But it was very, very successful at the end. The change has been tremendous in the past three to four years.

When I came to the United States in July 2004, for some reason, although Panasonic Japan had changed a lot, the overseas companies had remained the same. People's minds, the way the way they ran the business--it was all the same. I was kind of shocked when I came to the United States. (Laughs.)

I worked in the United States almost throughout the '80s. In those days I felt there were many issues. But when I came back here in July 2004, I saw very similar problems almost 20 years later. People's minds and the culture had not changed at all, although a lot of the competitors in the U.S. had changed a lot. It was very strange to see.

Were there too many executives? Or was there slow decision-making?
Yamada: Really slow. (Laughs.) I met one of the executives in the (U.S.) retail channel and asked him, "What do you think Panasonic should do?" He gave me very clear direction. He said, "Panasonic is very, very slow to respond in terms of new products, in terms of new technology, in terms of the competition, in terms of business processes. Everywhere you are too slow." I was shocked, but also I was very pleased to hear it.

It was kind of a dinosaur.

How did you begin to change it?
Yamada: The first thing I tried to do was reduce layers of decision-making by reorganizing internally. It took seven or eight signatures to sign off on a project. I changed the signature procedure to a maximum of two. That automatically means reducing the number of people.

What I learned was that the most difficult thing to do is change people's mindset. They get so used to they way they do things. Even if they understand the necessity, they are resistant to changing the way they work. Still, I see it to some extent.

Do you think you are mostly through the process?
Yamada: Yes. It has been over 18 months since I've been here and most of it is done. But it took more time, much more than I thought.

What have you done to revive the Panasonic brand in the U.S.?
Yamada: The first thing we did was, on Jan. 1 of last year, we changed our company name from Matsushita Electric Company of America to Panasonic Corporation of North America. That was the first major change. The second thing is that we made it very clear what our product category focus is.

It's very simple: plasma, plasma, plasma. You saw already our booth (at CES). We have over 100 plasma displays and in the center you see 40 65-inch plasma vertical displays. And a 103-inch plasma display.

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