In a presentation beamed to Panasonic offices around the world last week, company president Kazuhiro Tsuga stunned middle managers with the blunt message that their bonuses would be cut by more than a third.
A couple of hours later, he warned investors in Tokyo that Panasonic would lose close to $US10 billion in the year to March as it writes down assets and restructures - taking cumulative losses at the 94-year-old firm to nearly $US25 billion in five years. Tsuga branded the maker of Viera TVs a "loser" in consumer electronics.
Tsuga's move, and its execution, mark him out as a bold leader who is not averse to taking the tough decisions to turn around Panasonic. With local rivals Sony and Sharp, Panasonic is battling something of a death spiral of crushed demand in an anemic global economy, intense competition, a bloated business portfolio and weakened finances.
Tsuga, 55, who has a liking for muscular cars, preaches survival through tough love.
He warned his managers that businesses failing to earn margins of at least 5 percent would have no place in a re-modeled Panasonic, according to a source.
His promotion to the top job just four months ago is a bold move by Panasonic, which is Japan's biggest commercial employer with 300,000 staff churning out everything from light bulbs and bicycles to TVs, robotic hair washers and air conditioners.
His ultimatum to kill off weak units and beat a path away from consumer electronics to household appliances, car batteries, solar energy and lighting, sets him on an alternative restructuring route to his rivals.
Tsuga's house cleaning, including not paying a dividend for the first time in more than six decades, comes at a price.
Panasonic shares, already bumping along at multi-decade lows, slumped by almost a fifth on the huge loss forecast, wiping $US3 billion off its market value and prompting Standard & Poor's to cut its credit rating to close to junk. On Tuesday, the stock touched its lowest since early 1975 - when Tsuga was still at college.
Installed behind the president's desk, with a large globe alongside, he swiftly slashed headquarter staffing to just 150 from 7,000 to speed up decision making. By April, he wants to have identified almost three dozen of Panasonic's 88 businesses for closure, sale or merger.
Seeking out low productivity units, Tsuga may tackle the industrial devices business, which includes semiconductors, switches and motors. It employs around a third of Panasonic's workforce but brings in only a fifth of sales.
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