Buying Erie (ETP): a global footprint in one stroke (1980)

Going global without chasing low wages

The heart of this decision lay in an idea opposite to the usual reason for going abroad — the search for cheap labour. Most electronic-component makers of the day were shifting production to low-wage countries to escape the strong yen and high domestic costs. Akira Murata instead took over the whole of ETP — a firm centred on industrial and military lines that barely competed with Murata’s own products — and with it seized bases and customers across North America, Europe and Latin America in a single move. Cash stored up on the high share prices of the convertible-bond boom met the accident of ETP coming up for sale, and one acquisition completed the shift from reliance on exports to the United States toward a multipolar production and sales network.

That multipolar network sustained the management that followed. In 1979 Murata took the contrarian step of unifying 96% of its export contracts into yen, and it was precisely the overseas bases that kept it from leaning on exports to the United States alone that underwrote the currency strategy. Akira Murata himself, meanwhile, named the cultivation of talent and the building of a more profitable constitution as the next tasks. The coexistence of the boldness to buy a target outright once it was for sale and the caution to choose only one that did not compete became the groundwork for the Murata that, from the 2010s on, bought up one piece of foreign technology after another — VTI, pSemi and the rest. Buy a non-competing partner whole, when it can be bought — that judgement opened the road by which Murata spread across the world while remaining a pure component maker.