Details of Comprehensive Collaboration between Matsushita Electric Industrial and Matsushita Electric Works Announced; Based on report submitted by Collaboration Committee.

Business Editors

OSAKA, Japan--(BUSINESS WIRE)--April 23, 2004

Matsushita Electric Industrial Co., Ltd. (MEI (NYSE: MC)), best known for its Panasonic brand name, and Matsushita Electric Works, Ltd. (MEW), today announced the overall direction and certain specific details of a comprehensive collaboration between the two companies. This collaboration is pursuant to the basic agreement between MEI and MEW signed on December 19, 2003.

In January 2004, MEI and MEW established a joint "21st Century Collaboration Committee" to discuss the optimum structure of the Matsushita Group for the year 2010. The Collaboration Committee discussed the following three main topics:

-- (1) Initiatives to maximize synergy effects and achieve

business growth

-- (2) Policies, systems and infrastructures to be shared by the

two companies

-- (3) Initiatives to ensure smooth integration of corporate

cultures, while raising employee morale

The Collaboration Committee was representative of the diverse employee base of both companies, including participants from varying age groups and professional backgrounds. Open discussions were held on such areas as corporate communications, R&D, intellectual properties, business fields, accounting, finance and human resources. The results of these discussions were subsequently presented in a final report to the presidents of both MEI and MEW at the beginning of April.

The details outlined below were agreed upon by both companies after receiving the above-mentioned final report from the Collaboration Committee. In-depth plans and actual implementation of various initiatives will be the responsibility of individual project groups. Furthermore, both MEI and MEW will approve implementation of initiatives through the necessary corporate decision-making processes.

In April of this year, MEI and MEW, under common management philosophies and a common vision to contribute to the realization of a ubiquitous networking society and coexistence with the environment, began a new era of cooperation after MEW became a majority-owned subsidiary of MEI. The two companies will combine management resources to enhance overall corporate value through unified brands and management strategies, based on an optimized, customer-first operational structure. In addition to providing customers all over the world with solutions for comfortable living based on the concepts of "peace of mind, security, and brand loyalty," as well as providing products that are "easy to use" and "inspiring," MEI and MEW aim for global excellence by maximizing synergy effects between the two companies to create new growth and increase productivity.

The details of specific initiatives are as follows:

Collaboration towards new growth

1. Corporate communications

(1) Brand unification 

-- The "NAIS" and "National" brands currently used by MEW will be

unified under the "National" brand for products sold in Japan,

and the "Panasonic" brand for those sold in overseas markets.

In line with this change, the "NAIS" brand will be

discontinued.

-- The color of the "National" logo will be changed to orange.

(currently, MEI uses a red "National" logo, while MEW uses a

yellow "National" logo)

-- The above changes in brands and logo colors will be

implemented from October 2004.

(2) Corporate communications facilities

-- MEW's corporate showroom located in Shiodome, Tokyo will be

re-named the "National Center" (tentative name), and along

with the Panasonic Center in Ariake, Tokyo, will constitute

the main corporate communications facilities for the

Matsushita Group.

-- In addition to the corporate communications facilities

mentioned above, beginning in October 2004, seven corporate

showrooms throughout Japan will be renovated under a unified

concept to present a variety of product solutions.

2. R&D / intellectual properties

(1) Unified technology management

-- From the year ending March 31, 2005 (fiscal 2005), MEI and MEW

will share a common technology vision and mid-term technology

strategy. Furthermore, MEW will participate in MEI's

technology management system.

-- The companies also aim to achieve increased efficiency in

development by upgrading Development Process Innovation

Management.

(2) Joint R&D

-- Networks

MEI and MEW will establish a new "eHII Networking" architecture (tentative name). To achieve this, the two companies will jointly develop basic technologies, including high-speed power line communications, while ensuring connectivity between both companies' equipment.

-- Energy

The two companies aim to achieve the industry's highest level of energy efficiency in home-related products by combining MEI's proprietary "black-box" technologies (those that cannot be easily imitated by competitors) in the areas of energy-related devices with MEW's black-box technologies in high-performance construction materials. To this end, a new "Eco Life Solutions Center" (tentative name) will be established in May 2004.

-- Semiconductors / components and devices

MEI's strengths in semiconductors and components and devices, along with MEW's strengths in materials and processing, printed circuit board and electronic parts surface mounting technologies will be fully utilized to develop super-thin, ultra-compact device technologies for ubiquitous networking products such as compact video and audio equipment and mobile communications equipment. Meanwhile, a new "Next-generation Components and Devices Committee" will be established in May 2004, for the purpose of defining R&D themes and implementing various initiatives.

-- Lighting

By combining the black-box technologies of MEI and MEW in the areas of high density surface mounting and light distribution design, the two companies will create a value chain from components and devices to lighting equipment, aiming to achieve the top position in the global LED lighting market.

(3) Unified intellectual properties management

-- To strengthen intellectual properties, the companies will

integrate various functions and systems during fiscal 2005.

1. Integration of strategy development functions

-- The two companies will concentrate Group intellectual

properties strategy functions

2. Integration of intellectual property rights negotiations functions

-- The two companies will further strengthen license

negotiations by strategically combining the respective

strengths of MEI and MEW in this area.

-- The two companies will also consider integrating their

respective affiliated intellectual properties research

companies.

3. Unified intellectual property systems

-- The two companies will integrate intellectual property

rights application/registration processes, bonus rewards

and other systems, as well as underlying data processing 

system infrastructures.

3. Business operations initiatives

(1) Collaboration V-products

-- During fiscal 2005, MEI and MEW will develop and launch* a new

line of competitive products by integrating core technologies

of the two companies. These products will be called

"Collaboration V-products."

* Product launches will be announced individually.

(2) Creation of a network solutions business

-- By utilizing MEW's "EMIT System," which is a networking system

for equipment in commercial, residential, and other buildings,

and MEI's "Home Network System" for networking home

appliances, a new "eHII Networking" architecture (tentative

name) will be created for commercial and residential

applications.

Commercial buildings

For commercial buildings, the companies will offer total systems, including MEI's video surveillance and distribution systems, and MEW's lighting control and security systems.

Residential buildings

In this area, MEI's wireless/video communications technology and MEW's sensor and security technology will be integrated and applied to security and other convenient services that create added value in residential buildings.

Homes

For the home, MEI and MEW will create comprehensive systems connecting video and audio equipment, home appliances and other housing equipment.

To achieve the above-mentioned initiatives, the companies will establish two new groups, namely the "Ubiquitous Security Business Strategy Project" and the "Home Safety System Business Strategy Project" to carry out joint R&D and business operations in this field.

(3) Strengthened marketing activities

-- MEI and MEW will strengthen integrated marketing functions and

enhance overall brand image through advertising and marketing

activities that promote a wide range of combined products from

both companies.

(4) Increased business in Chinese market

-- Within the comprehensive collaboration between MEI and MEW,

China has been designated as a key overseas market. The two

companies will therefore share management infrastructures in

China, as well as integrate strategies relating to this

market.

-- Strategic business areas in the Chinese market are lighting,

combining light bulbs and lighting equipment, the home

environment solutions business, which will focus particularly

on home interiors, and the beauty and health products

business.

-- A "Chinese Lifestyle Research Center" (tentative name) will be

established in fiscal 2005.

-- MEI and MEW will integrate promotion and development of sales

to mass merchandisers, advertising and marketing, as well as

organization of trade shows and other displays.

-- Activities of the "Chinese Human Resources Strategy Task

Force" will be further expanded.

3-A. Specific business initiatives (I) - electrical supplies

(1) Integration of electrical supplies sales group

-- To strengthen marketing in this area, MEI and MEW will discuss

the integration of relevant sales and marketing operations

into MEW.

-- Specifically, the companies launched a new "Electrical

Supplies Business Project" in April 2004, with the aim of

fully integrating all marketing functions within fiscal 2005.

(2) Comprehensive building solutions business

-- MEI and MEW will provide comprehensive systems in this area

based on the two companies' strengths in the fields of energy

efficiency, environment and security. Main products will

include lighting, video and audio equipment, electric wiring,

distribution panelboards and air conditioning equipment.

-- In security systems, the companies will expand business in

product lines such as access authorization, video surveillance

and other security systems.

-- Priority will also be placed on the rapidly growing markets of

systems renovation and maintenance.

(3) Intercom business

-- The intercom for the home entrance is expected to be the

centerpiece of future home networks. As such, business

strategies and product planning functions in this area will be

unified.

-- Product competitiveness will be enhanced by integrating MEI's

wireless technology with MEW's security technology.

-- Overlapping products in this business area will be reviewed

and, where necessary, overlaps will be eliminated.

3-B. Specific business initiatives (II) - building materials and equipment

(1) Joint marketing activities

-- The two companies will take advantage of strengths in their

respective sales channels, while jointly carrying out sales,

marketing and promotion activities.

-- In addition to the previously-mentioned 9 domestic corporate

showrooms, MEI and MEW will jointly manage 124

equipment-related showrooms. These showrooms will focus mainly

on building materials and equipment, and reflect regional

customer needs and preferences.

(2) Solutions for residential living spaces

-- MEI and MEW will use their wide range of strengths in product

proposals, construction and servicing to provide total

solutions for the home.

-- New services will also be introduced to address the individual

needs of customers.

(3) Elimination of overlapping businesses

-- Overlapping businesses, such as kitchen systems and bath

systems will be reviewed and, where necessary, overlaps will

be eliminated.

A new "Building Materials and Equipment Project" will be responsible for implementing these initiatives.

3-C. Specific business initiatives (III) - lighting

(1) Integration of light bulb and lighting equipment strategies

-- The companies will integrate respective business strategies

pertaining to MEI's light bulb business and MEW's lighting

equipment business.

-- In May 2004, a new "Lighting Business Strategy Committee" will

be established to unify decision-making in this area.

Furthermore, MEI and MEW will establish a "Lighting Business

Strategy Planning Department" (tentative name) responsible for

new product R&D and joint marketing activities.

(2) Enhanced competitiveness and increased sales

1. Establishing the top lighting business in the domestic market

-- The two companies will cooperate in the areas of light

bulbs, lighting equipment, and components and devices to

drastically reduce lead time and increase new product

introductions.

2. Strengthened industrial-use light bulb / components and devices business

-- The two companies will enhance product competitiveness in

the areas of liquid crystal display (LCD) backlights and

light bulbs for video projector systems (VPS), by

integrating light bulb and component technologies.

3. Expansion of R&D and sales in Chinese market

-- MEI and MEW will expand their business in new markets

through innovative product proposals relating to lighting

systems design, etc.

-- Technologically superior light bulbs and components and

devices will be supplied to local Chinese manufacturers.

3-D. Specific business initiatives (IV) - home appliances

(1) Strengthened marketing activities

-- The companies will establish the "Appliance Marketing

Committee" (tentative name) to jointly carry out marketing and

sales activities (advertising, catalogues, home pages,

marketing campaigns, etc.) through resale channels for the

Japanese market. As a result, the companies aim to increase

sales in home appliances (cleaning and cooking equipment, air

conditioners, etc.) and personal appliances (beauty, health,

and other personal care products).

-- MEI and MEW will strive to increase sales in the key Chinese

market. To accomplish this, product competitiveness will be

enhanced through various initiatives, including the

establishment of the new "Chinese Lifestyle Research Center"

(tentative name).

(2) Review of overlapping products and enhanced product competitiveness

-- Overlapping product categories, such as electric carpets,

kitchen waste processors, air purifiers, hygiene toilet seats

and alkaline-ion water purifiers, will be reviewed for the

purpose of eliminating unnecessary duplication. In addition,

MEI and MEW will integrate their respective core technologies

in these areas to enhance product competitiveness.

To implement these initiatives, MEI and MEW will jointly establish the "Home Appliances Strategy Project."

Framework to support a new Matsushita Group

4. Accounting systems and finance

(1) Consolidated financial reporting

-- With the additions of the Matsushita Electric Works Group (MEW

Group) and the PanaHome Group, the number of consolidated

companies of MEI (the parent company and its consolidated

subsidiaries) will increase from 375 (as of December 31, 2003)

to more than 600 companies. MEI, through close cooperation

with such subsidiaries, will implement timely and enhanced

disclosure under the new group structure.

1. Standardized fiscal periods

-- Beginning in 2005, MEW will change its fiscal year, which

currently ends on November 30, to one that ends on March

31 (subject to approval at MEW's general meeting of

shareholders scheduled for the middle of February 2005).

As such, the period from December 1, 2004 through March

31, 2005 will be treated as a one-time short fiscal

period, for the purpose of making the transition to the

new fiscal year.

2. Segment reclassification 

-- Regarding consolidated segment information disclosure for

MEI, a new segment "MEW and PanaHome" will be created to

reflect the addition of the MEW Group and the PanaHome

Group in MEI's consolidated financial reporting.

(2) Group finance strategy

-- A "Group Finance Committee" will be established during fiscal

2005 for the purpose of strengthening the new Matsushita

Group's financial structure and increasing overall corporate

value.

1. The committee will focus on creating cash flows, reducing assets and managing capital policies, all aimed at increasing free cash flows and achieving consolidated Capital Cost Management (CCM) above zero (0).

2. To minimize financing costs and foreign exchange rate risks, a global financial platform will be structured to take maximum advantage of scale merits relating to funds and foreign currency exchange, as well as implement best practices.

3. A new finance company will be established to strengthen the financial network that connects the more than 600 consolidated companies in the new Matsushita Group.

5. Materials procurement, logistics, IT platform, asset utilization

(1) Standardized group materials procurement and centralized purchasing

-- Suppliers will be selected based on new standardized

purchasing policies.

-- A new "Electronic Bidding System" will be implemented at all

business domains in both MEI and MEW. The new system is

scheduled to completed in September 2005.

(2) Reduction of logistics costs

-- MEI and MEW will make more efficient use of logistics routes

through centralized purchasing, rerouting, etc.

-- MEI and MEW will use each other's respective logistics

infrastructures (facilities, routes, etc.) to improve

efficiency. The two companies will use MEI's infrastructure

for home appliances, while MEW's logistics infrastructure will

be used for electric equipment and building materials.

(3) IT platform

-- A new IT system will be created to facilitate the sharing of

information platforms and IT know-how.

1. The two companies will cooperate in achieving IT systems compatibility in the areas of sales and purchasing, production management, accounting and procurement, thus increasing efficiency and overall IT systems capability.

2. Information sharing will also take place in the form of unified IC employee identification cards, electronic mail addresses and Web management.

(4) Efficient utilization of assets

-- A new "21st Century Facilities Management Committee" will be

established in May 2004 to share information, aimed at optimum

utilization of both companies' facilities and reduction of

assets.

-- MEW will participate in MEI's "Construction Investment

Committee" to achieve overall optimum use of investment funds 

and assets.

6. Environmental management

(1) Unification of group environmental administration functions

-- Environmental Management Systems (EMS) of both companies will

be integrated during fiscal 2005.

-- Environmental strategies, environmental support and other

environmental administration functions will be unified under

MEI in April 2005.

-- The Sustainability Report for the new Matsushita Group will be

published beginning for the year ending March 31, 2006 (fiscal

2006).

(2) Improved environmental performance

-- A joint task force will be established to address common

environmental issues, including the reduction of CO2 emissions

and industrial waste.

7. Human resources and corporate culture

(1) Creation of a "customer first" culture

-- A new "Market Training Exchange Program" will be introduced to

increase product and market knowledge of both MEI and MEW

employees.

-- MEI and MEW will also introduce a new training project aimed

at enhancing a "customer first" corporate culture.

(2) A corporate culture supporting autonomy and diversity

-- The two companies will jointly establish a "Collaboration

Challenge Trainee Program," which will promote interaction

between highly motivated employees from both companies.

-- The new Matsushita Group will consist of a diverse employee

base in terms of gender, age and nationality.

(3) A corporate culture that fosters competitiveness

-- All current training programs and courses will be made

available to employees at both companies.

-- A new "Collaboration Training Program" is planned with the aim

of further strengthening various businesses within MEI and

MEW.

-- Recruiting activities for mid-career and global professionals

will be unified.

In the future, a "Human Resources Exchange Project" will be launched to strengthen business, while further solidifying a highly-efficient management organization.

Future plans and implementation

The aforementioned initiatives will be discussed in further detail by various project teams. The subsequent implementation of these initiatives will take place through the necessary corporate decision-making processes.

Disclaimer Regarding Forward-Looking Statements 

This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Matsushita and its group companies (the Matsushita Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Matsushita Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Matsushita Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Matsushita undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Matsushita in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, Asian currencies and other currencies in which the Matsushita Group operates businesses, or in which assets and liabilities of the Matsushita Group are denominated; the ability of the Matsushita Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the ability of the Matsushita Group to realize expected benefits of various restructuring activities in its business and organization; the ability of the Matsushita Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Matsushita Group to maintain competitive strength in many product and geographical areas; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; and fluctuations in market prices of securities and other assets in which the Matsushita Group has holdings; as well as future changes or revisions to accounting policies or accounting rules.