Declaring a move beyond ceramic capacitors (1972)

A design to thin out the breadwinner

What President Sato Hikohachi set out in a lecture at the end of 1971 was a numerical target for shrinking his own founding business: bring ceramic capacitors down from 45% of sales to under 30%. It was framed not as a withdrawal but as the design of a ratio. The unit price had fallen to about ¥1.60 apiece, less than half the price of a single cigarette. To a man who treated a state in which every division made money as a sign of decline, and who was carrying five divisions that made none, thinning the breadwinner was no contradiction.

The results immediately after the declaration were not good. Sales fell to ¥10.6 billion in the year to February 1975, ordinary profit sank to a ¥700 million loss, and by 1978 the company was calling for 200 voluntary retirements. Adding products did not let a company weighted toward exports escape the swings of the cycle and the currency. Even so, the stance of redesigning from the material up bore fruit in the nickel-electrode MLCC of 1984. The reach of the policy lay in this: it settled how far back into the materials the company would own things before it settled what to make.