It's official: Matsushita now Panasonic

Japanese electronics maker Matsushita Electric Industrial Co. said Thursday it will drop the name of its charismatic founder and become Panasonic Corp. to strengthen its global image.

Matsushita President Fumio Ohtsubo acknowledged it was a tough decision to give up the Matsushita and other brand names the company has built with consumers and employees for 90 years.

But he said the value of the Panasonic brand had suffered because the company had stuck with the old name.

"We must create more than what we are giving up," he said, speaking from Osaka headquarters to reporters in the company's Tokyo office via a video feed.

The name change was approved at a board meeting Thursday and will become effective Oct. 1, pending approval at a shareholders' meeting in June.

The move signals the importance of brand recognition amid intensifying global competition — and makes sense given that Matsushita Electric Industrial Co. is far better known outside Japan as Panasonic, one of its brand names, than as Matsushita.

The company, founded in 1918, will also drop its local brand, National, for products such as rice cookers, washing machines and refrigerators, by March 31, 2010, it said.

Matsushita said the decision was to "unify its global brand," but said it will continue to run its business based on the philosophy of its founder, Konosuke Matsushita.

Matsushita, which makes a wide range of gadgets including flat-panel TVs, digital cameras and car navigation equipment, has been mulling changing its name to Panasonic for some time to avoid consumer confusion.

Brand power is increasingly critical. A rapid decline in prices for gadgets has hurt profits, and consumers tend to be willing to pay more for products from companies with strong reputations like Sony Corp. and Panasonic.

Also Thursday, Ohtsubo said computer chip production will be expanded in Japan with a $860 million investment.

The company will strengthen its flat-panel TV business through plasma display panel TVs — Panasonic's forte — as well as liquid crystal display TVs in an alliance with Hitachi and Canon, he said.

Matsushita will also expand into developing a new kind of panel technology called OLEDs, or organic light-emitting diode display. But Ohtsubo said the TVs likely won't be for sale until about 2015.

Sony already has a small OLED TV on the market, and other makers, including Samsung Electronics Co. of South Korea, are working on the technology.

Konosuke Matsushita's rags-to-riches story and humanitarian views have been the pillar of the company.

Like Akio Morita, the founder of archrival Sony Corp., Matsushita is one of the charismatic entrepreneurs credited with leading Japan's modernization and economic success after its defeat in World War II.

Ohtsubo said the decision to change the company name was relayed last month to members of the Matsushita family still holding positions in the group's companies. He said they welcomed the decision as a plus for the company's future.

Ohtsubo acknowledged he had mixed feelings because of his pride and other emotions for the name "Matsushita," but he said the decision was fitting for marking the 90th anniversary of its founding.

"Rather than festering in nostalgia, we must make a decision for Matsushita's future," he told reporters, still using the old name. "This time, we are taking up the challenge toward global excellence."

Matsushita, who died in 1989 at 94, has inspired Japanese corporate culture with his unpretentious view on life and work, and for insisting only good companies that contribute to social well-being can hope to succeed.

Known in Japan as "the god of management," he is famous for quotations such as "Business is people," and "Every person has a path to follow." He began his career as an apprentice at a brazier store when he was just 9 years old after his landowner family lost its fortune.

Although he was self-taught, the disarming Matsushita wrote books, founded a major publisher and became an award-winning philanthropist.