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Panasonic narrowly avoids zaibatsu designation
In 1946, as Panasonic was preparing to resume manufacture of consumer products, tine Genera! Headquarters (GHQ) of the Supreme Commander for the Allied Powers (SCAP) laid down policies for economic reconstruction of the country, and for reorganization of companies that participated in the war effort. In March, the company was designated as a "restricted concern," and its assets were frozen. It was also designated as a zaibatsu (a family-controlled industrial and financial combine) and as such, given no relief from its huge wartime debts. It was also subjected to a purge affecting senior public and industry officials. The company was paralyzed by a total of seven Allied directives that threatened to dissolve it entirely.
These laws were intended to break up businesses and power concentrations that had existed for generations, and Matsushita was indignant on seeing them directed at his company, which was the work of a single generation.
The company fought tie zaibatsu designation for over four years, filing objections at SCAP headquarters more than 50times. Eventually SCAP understood the company's position, and the zaibatsu designation was lifted toward the end of 1950, along with most of the restrictions.
While the company was still laboring under these restrictions, Matsushita was ordered to resign for his role in the company's wartime activities. Having no recourse, he prepared to step down. News of this came as a shock to the Matsushita Labor Union, formed in 1946, and to the company's retail stores and other affiliates. They declared that Matsushita was a mainstay of the company's reconstruction effort, that his loss would mean the destruction of the company, and resolved to get the resignation order rescinded. This attitude was a surprise to SCAP officials, who had seen a great many labor unions lobbying for the dismissal of their companies' management. In May 1947, SCAP reviewed the case and, in a rare reversal of policy, permitted Matsushita and the company directors to remain in office.
In the latter half of 1948, borrowing restrictions were enacted as part of a package of financial belt-tightening measures to control inflation. Panasonic still had huge wartime debts and promissory notes to pay off, and money was so tight that the company was forced to pay wages in installments.
In 1949, the government announced the Dodge Plan, a balanced national budget that slashed government spending, sending the economy into a deflationary spiral that bankrupted many small and medium-scale enterprises. Panasonic did its best to cope by unifying the organization, strengthening its sales division, making personnel adjustments and reorganizing its management, but by July it was forced to operate its factories only half days. Losses mounted and by the end of the year the company was in huge arrears for the commodity tax, leading the press to dub Matsushita the "King of Arrears." In March 1950, the company laid off 567 of its 4,438 employees, one of the few layoffs in the company's history.
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