Kunio Nakamura says flat-out that his mission to turn around Matsushita Electric Industrial Co. will mean more than just change and transformation. It will also mean the destruction of some long-held ideals.

That's not easy when his company's cult-hero founder, Konosuke Matsushita, built his Panasonic empire on such typically Japanese beliefs as catering attentively to customers, refining the workers' spirit and staying humble with corporate rivals.

Nakamura, Matsushita's sixth president, must revive the company's digital section, streamline sales, cut costs and forge key global alliances at a time when the demand for electronics and telecommunications products is plunging around the world.

Nakamura recently spoke to The Associated Press about the changes facing his company:

 

AP: You've said you are very concerned that Matsushita might fail if things don't change. Have they?

Nakamura: Since founder Konosuke Matsushita began Matsushita Electric in 1918, it has been a model of business success for the 20th century electronics industry. Everyone in the world recognizes that. Behind that success was our system of mass production of standardized products. But in a society of digital networks, that business model of mass production no longer works. We have to change it to a model that succeeds in the 21st century. That's why I am speaking about destruction and recreation.

 

AP: What are some of the specific changes?

Nakamura: First, we must have a state-of-the art device based on computer chips. Second, product development must be nimble and quick. ... The third point is the concept of services in the wide sense of that word.

 

AP: Is the process of destruction and recreation complete?

Nakamura: We can't say it's over yet. It's in transition. It's about half finished. I will keep spreading the same message until everyone has the same sense of crisis, stressing that we can't survive if we keep manufacturing in the old way.

 

AP: Some people say Matsushita is losing ground to Sony Corp.

Nakamura: No way. I don't think we can be compared in that way, that we are losing to Sony. The strategies for Sony and Matsushita are totally different, and our businesses vary. ... We are through and through a manufacturer.

 

AP: Restructuring is straightforward and fast in the United States because there are layoffs. But you have to carry out restructuring Japanese-style.

Nakamura: In the past eight years, we have cut 12,000 jobs. It's not that we haven't trimmed our work force. But the employment situation here is different from the United States, so a company has a social responsibility in Japan to offer jobs. We create new businesses so workers can move to new assignments, and we offer training to upgrade their skills.

 

AP: So you are going to stick to the policy of no layoffs?

Nakamura: That's right. We may consider it if a totally unprofitable business project arises in Japan. But we don't foresee that so far. The question of layoffs is that we can't do it until there's a social system offering far more job mobility like the one that exists in the United States.

 

AP: How is Matsushita different from an American company?

Nakamura: We have a philosophy established by Konosuke Matsushita, the founder. We are unique in that we develop our strategies upholding that philosophy.

 

AP: In your everyday life, when do you find yourself referring to Mr. Matsushita's philosophy?

Nakamura: It comes up most often when I'm trying to make a decision. I always think about how the founder would have made his decision.