Once a symbol of Japanese superiority in electronics, Panasonic Corp. has been having a tough time of late. Huge losses in the past few years have prompted the company to dramatically cut staff, and at the end of March it said it was going to restructure yet again, in an attempt to improve results in several money-losing divisions. In Canada, Panasonic has installed a new president – Michael Moskowitz – who took on the top job in this country at the beginning of April.
Panasonic has been described recently as a “troubled” company and even a “sinking ship.” What is the main problem?
We are a very diverse company, and in many ways that is a good thing, but it is also a difficult thing to manage. The company has grown to such an extent that there are underperforming business units. Some, particularly on the consumer side, have not done as well. It is a cutthroat industry. We have to make some tough decisions about [which units] we are not going to support.
What is an example of one of the troubled units?
The TV business is a very difficult business. It is very challenging from a profitability perspective and we are losing money on it.
What will Panasonic look like a few years from now?In the next 12 or 18 months, there will be a streamlining of areas that don’t make money. There will be businesses that will either be sold, merged, or just closed, if they don’t produce. The core business we will hold ourselves, but there may be things that aren’t as valuable, and we will outsource those. [We will be] a little bit more narrow, more focused on the product categories that we have in the profitable areas, and very focused on net profit and free cash flow.
One of the things that we are going to do much better in the future is to leverage our relationships with corporations. If we are selling and marketing to an institution that is putting together a new security system, why aren’t we talking to it about its mobile sales force using Toughpads [rugged mobile computers]? And why not be in its boardrooms and executive offices [with audiovisual equipment]? There is tremendous opportunity from that perspective.
Is the Panasonic brand name still strong, in light of the rise of Apple, Samsung and others?
That depends on where you are in the world. It is [still] a top 10 brand in Canada. But I would be lying if I said it is a cool, cutting-edge brand. It is not. We have to do a better job at that. It is tough to be trusted and high value, but also really cool and hip, particularly when you have a very diverse company.
How are you trying to attract younger customers?
By being digital, for example. For many years we believed in traditional media, but we are reformatting our whole Web experience right now. There is a big focus is on social media, on digital display, and on our e-commerce engine that we are building. We are spending a tremendous amount of time, energy and money building infrastructure so we can talk to customers directly in a one-to-one relationship.
How do you compete in so many businesses that have become commoditized?
[Take] appliances as an example. We don’t think we can do a very good job of competing in the mass-merchant appliance business. But we have picked our niches and we are expanding on those. We have a very strong microwave business, and we have expanded that into additional small appliances – rice cookers, bread makers, toaster ovens, etc. And to support our microwaves, we brought out an induction cooktop and a unique oven, [making it] a family of products.
How did Panasonic prepare you for the move from executive vice-president to president of the Canadian operations?
It was a two-year transition. There was a mentorship/succession plan. I met with many different business units and product groups, [and went to] factories around the world. That introduction was critical. It was a planned transition.
Was the key challenge in understanding all the parts of the company?
The various parts of the company are all very different. Our customers in the consumer area are end users or retailers. On the other hand, we have government agencies, public safety agencies, school boards and corporations that buy projectors and light bulbs and ceiling fans. The various cultures internally are also different.
It is hard to run the Canadian arm of a multinational whose headquarters is thousands of kilometres away?
The challenge is making sure you have a voice around the table [where there is] decision making on products. It is not necessarily how loud you are, but how influential you are. The corporation values our feedback and our ability to execute.
You have worked at the top of other tech companies, running XM Satellite radio, and Palm’s Canadian operations. What did you learn there that helps you in this new job?
[XM] taught me the value of recurring revenue streams. It taught me that it is not just about selling a product, it is about selling service and support. Many companies say, “Once I have sold this, I am done with [the customer], and then I have to sell another product.” [At Panasonic], we don’t just make one product. We can up-sell and cross-sell our customers.
The other thing [I learned] is that you need to be cutting-edge, but you don’t need to be on the bleeding edge of technology all the time. Our business is about how to evolve our products into better products. We are very good innovators and a great manufacturer, but you don’t always have to be at the bleeding edge of technology to be successful.
Has Panasonic considered manufacturing in Canada?
There used to be TV assembly here, years ago. If costs weren’t prohibitive, we would potentially manufacture here. But most things have moved overseas. Still, product development and feedback to our factories and our development centres happens here.
There [isn’t even] much manufacturing going on in Japan. It is a high-cost provider and they have moved things to China and Taiwan. That is just the way the world is working.
Which technology is coming down the pipe that you find the most exciting?
There are a lot of great products out there. Our appliances are really cool. Our beauty products are really innovative. We are coming out with all these really great new devices. But what really gets me excited is when we solve a problem for individuals and customers. When we do a great job with integrating our technology around public safety, or when we set up a classroom and can control everything in that classroom, to me that is awesome.
President, Panasonic Canada Inc.
Born in Toronto; 42 years old.
BA from York University in Toronto; MBA from Dalhousie University in Halifax.
Worked for Sharp Electronics and Sony in the 1990s.
From 1998-2007, worked for Palm, including stints as president in Canada and president of the Americas International division.
President and CEO of satellite radio company XM Canada from 2008 to 2011.
Joined Panasonic Canada in 2011, rising to executive vice-president in 2012 and president in 2013.Report Typo/Error