President of Matsushita Electric Resigns : Management: The change is not expected to shake up MCA Inc., the entertainment giant owned by Matsushita.
The president of Matsushita Electric Industrial Co., which owns Los Angeles-based entertainment giant MCA Inc., resigned Tuesday in the face of an embarrassing loan scandal and a lingering sales slump.
In a characteristically Japanese gesture, Akio Tanii publicly accepted responsibility for the company’s problems and said he was moving aside to make way for new management at the Osaka-based manufacturing giant. Tanii was immediately replaced by Yoichi Morishita, an executive vice president.
People close to MCA, whose units include Universal Pictures and Universal Studios theme parks, said they do not expect to be affected by the change. While there has been friction between the two companies, Tanii was not involved in MCA’s day-to-day operations.
“I don’t think it really impacts us at all,” one high-ranking executive said privately. “The problems at Matsushita are structural. We are actually one of their better performing divisions.”
Tanii’s departure had been expected since December, when Morishita was promoted to executive vice president, according to sources. MCA executives have met Morishita but said they do not know much about his management style.
Matsushita, which manufactures such brands as Panasonic and Technics, has been ensnarled in a loan scandal involving its National Leasing Co. subsidiary since last year.
National reportedly loaned more than $385 million to an Osaka restaurateur who subsequently was charged with fraud. As news of the scandal spread, several senior Matsushita executives resigned or were demoted. Chairman Masaharu Matsushita and Tanii took 50% pay cuts for three months.
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“The leasing business is not the core business of the company, but the trouble in that business is still regrettable,” Tanii told a news conference in Osaka on Tuesday. “I wanted to make clear who should be blamed.”
Exacerbating Matsushita’s problems is the worldwide downturn in electronics sales.
In quarterly earnings reported Tuesday, Matsushita posted a 60% drop to $429 million in pretax profit for the three months ended Dec. 31. Sales also fell, dropping to $16 billion from $17.1 billion.
The company expects pretax profit of $632 million for the six months ending March 31, against $926 million the year before.
Some analysts say electronics companies such as Matsushita expanded too quickly during the boom years of the 1980s.
“The company doesn’t seem to be making adequate preparations for the downturn,” said Mike Jeremy, senior analyst at Baring Securities in Tokyo. “They’ve been setting their expectations too high.”
Matsushita purchased MCA for $6.59 billion in 1991. Tanii did not participate in the face-to-face negotiations, but raised eyebrows when he failed to state categorically that upper management in Japan would not interfere with movie-making autonomy at the studio.
In contrast, Akio Morita, chairman of Sony, made assurances that the Japanese parent would not meddle in artistic content at Columbia Pictures when Sony’s purchase of that studio in 1989 sparked concern over the sale of an American “cultural asset.”
Tanii’s resignation fits into a cultural pattern of ritual atonement in Japanese society, in which a chief executive or an organizational leader takes responsibility for the transgression of subordinates--even in cases where the leader had no supervisory role or knowledge of the act in question.
A similar gesture occurred several years ago, when Shoichi Saba and Sugiichiro Watari resigned as chairman and president, respectively, of Toshiba Corp. to take responsibility for the illegal acts of a subsidiary.
Reuters contributed to this report.
