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[John J. Nevin, former CEO, Zenith]
In 1956 and again in the early 60's, the Japanese equivalent of
our Federal Trade Commission which was really established by US
authorities after the war twice charged the Japanese industry
with unlawful cartel action. In both instances the Japanese industry
pleaded 'nolo contendere', didn't really deny the charges.
[Shuichi Kato; narrator]
The cartel may have had the tacit support of the Japanese
government, but the manufacturers had to hide their double pricing
system from U.S. authorities. They did this through a plan that
required the collusion of U.S. dealers such as Alexander's and Sears.
[Hiroshi Kohno, writer]
Sales proceeded very smoothly. Matsushita the man is still today
considered the god of sales. He took very good care of the important
dealers in America.
[Shuichi Kato; narrator]
This is how the plan worked. When Japanese manufacturers sent a
television through customs, they would declare an official price,
high enough so that the U.S. Customs would not investigate. The
manufacturers would then offer a secret refund to the U.S. retailer,
often through a Swiss bank account. The U.S. dealers proved
enthusiastic.
(picture shown of a check written by Matsushita to Sears Roebuck)
[Shuichi Kato; narrator, picture of Japanese doing exercise and
other rituals]
This is the face of Japanese corporations that strikes fear in
Americans. 1962, Matsushita celebrates its first shipments of the
year. Secretly, the Japanese manufactures were exporting their goods
at prices far lower than in Japan, and perhaps below the costs of
manufacture. Japan's television industry expanded rapidly.
[John J. Nevin, former CEO, Zenith]
The effect of trying to compete with this dumping of Japanese
television receivers at very low prices in the United States was to
force the American television manufacturers including companies like
General Electric, GTE Sylvania, Ford Motor Company that owned
Philco, Maganavox, to the wall. And one after an other, they
either went through bankruptcy, or were acquired by foreign
competitors.
[Shuichi Kato; narrator]
This price fixing cannot on its own explain one country's failure,
or another's success. It is obvious other economic factors were at
play. The Matsushita Company refused to be interviewed about its
history. But the cartel founded by K. Matsushita met until at least
1977, by which time at least 90% of the U.S. industry was gone.
Konosuke Matsushita was perhaps the most respected industrialist in
Japan, revered as a moral authority. How could he be seen so
differently outside our shores. And why did he devote himself to
this plan.
One of the themes of Japanese life has been a moral double standard.
We protect those within our family or group, and we are often
indifferent to those outside it. In our society, even the Japanese
can be outsiders. But the ultimate outsider is the foreigner. K.
Matsushita believed that business would restore Japan, transform our
country into a paradise on Earth. But for business to prosper, he
and his country needed the outside world. How the rest of the world
would fit into Japan's revival, this has never been clear.
America insists on seeing a world in its own image. Your world view,
in its own way, has been as insular as Japan's. Perhaps it is your
religious past, but America is one of the last countries still to
believe in a holy war. You find energy and purpose when you have an
enemy, and today some Americans would like Japan to fill that role.
But had America been attentive, Matsushita and other Japanese
manufacturers could not have harmed the U.S. industry as they did.
In the 60's and 70's, this country seemed so vast and rich, it could
afford to be careless with its future. Japan was all but ignored.
America's heart and mind were elsewhere, consumed by the cold war,
the holy war of its day.
(an old 60's newsreel on Kennedy's visit to Japan is shown)
When Japanese companies took aim at the U.S. television market, they
faced in many ways, an easy target. U.S. companies had been drawing
large profits from the television business. When challenged, many
firms simply gave up the field in favor of short term profits
elsewhere. In this way, they abandoned not just television, but
related fields such as video recorders, and semiconductors for years
and even decades to come. As for the U.S. government, I think its
actions were negligent. Frontline investigated:
The television dispute became public in 1968, when U.S. producers
charged the Japanese with dumping goods at illegal prices. After a
three year inquiry, the treasury department ruled the Japanese had
been dumping. At the time, no penalties were assessed.
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