SAITAMA — His friends backed him up 15 years ago when he left his lofty position at one of the world’s largest electronics makers and ended up at a small audio manufacturer. But when he decided to pursue a piece of analog equipment seemingly destined to die in an increasingly digital world, they wrote him off.
Sanju Chiba, former vice president at General Electric Co., has no regrets. He says his decision to build the world a stylus-free record player was in fact the best one he has ever made.
In mid-December, as his staff worked against the clock to fill mounting orders for Christmas delivery at a small factory next to a railroad, Chiba said he has gained far more than he’s lost since leaving GE, now the world’s largest company in terms of market value.
Touted as the world’s only analog record player that does not use a stylus, the company’s Laser Turntable, which uses an optical pickup similar to those in CD players, has been attracting growing attention from music lovers worldwide.
After running in the red for 11 years, Saitama-based ELP Corp. has finally started turning a profit.
And his philosophy about staying out of mass production seems to be paying off.
“Some 30 billion to 40 billion analog records are said to be out there in the world, with many sleeping in storage,” Chiba said. “Our players go directly against the current mass-production, -consumption culture” by effectively reviving these records.
The 62-year-old Gunma native was the highest-ranking Japanese at GE when he left the firm in 1987 after a fight with then chief executive Jack Welch over whether to sell or continue running a loss-making unit.
He started his GE career in 1969 at a warehouse in Tokyo’s Shibaura district and climbed the corporate ladder, mainly in procurement. He became vice president of GE’s overseas unit in 1985, overseeing consumer appliances, including TVs, VCRs and telephones.
Chiba’s GE career coincided with the burgeoning mass-production, mass-consumption culture, and his firm symbolized the trend, he said.
With some 40,000 workers under his command, he had weekly numbers to meet in the cut-throat consumer electronics market.
“We were force-feeding our products to consumers,” he recalled. “They bought TVs, but not because they didn’t have one. They already had TVs in their homes and they worked all right.”
The fierce price competition ate into profits, leaving those left standing with little gain.
“Those were the days of being driven by numbers,” Chiba said. “I felt an emptiness in doing my job.”
Having been at the center of a culture of accumulation, and coming to question its meaning, he was enthralled by the idea of making a business out of reviving old vinyl LPs.
The basic technology of the Laser Turntable was invented by an American graduate student in the 1980s. The inventor tried to sell the technology in Japan with the help of Chiba. But major Japanese consumer electronic firms shunned the proposal. The compact disc, after all, was quickly becoming the dominant music medium.
Chiba, who had become president of a Tokyo audio equipment firm, ELP’s predecessor, decided in 1989 to buy the technology for his company and have it manufacture the players.
It took six years for the firm, which Chiba eventually bought out, to develop a commercial product.
To get to that point, Chiba sold off all other operations, such as producing sound-effects systems for cinemas. He also sold off his personal assets, including houses and real estate, to pay off massive debts — as much as 1 billion yen at one point — and bankroll the project.
He now lives in a rented house “for the first time” in his life, with his wife and daughter. His income is a little more than 10 percent of what he earned at GE.
His company’s headquarters-plant is only a few times larger than what he had as his personal office at GE in New York.
And he now commutes by bicycle instead of the chauffeured limousine he once enjoyed as vice president at GE.
Yet, he said he is happy as can be, finally seeing a business once considered a long shot take off.
“My family used to say I should have stayed at GE, but they don’t complain anymore, after seeing how happy I am,” Chiba said.
The record player without a stylus has proved popular with music buffs who can once again play records that have grown too fragile to put under a needle.
Chiba said his product, by combining digital technology with analog, can literally revive worn-out records since the player’s optical pickup uses part of the grooves not damaged by styli.
However, the player cannot work its magic on every analog disc out there; some records were stamped with irregular grooves that elude the optical pickup.
ELP broke even for the first time in the business year to May 31, 2001, and Chiba expects 30 million yen in pretax profit in the current fiscal year.
When they were first released, the players cost 3 million yen apiece, and most of the clients were institutional buyers, including the National Library of Canada and the National Theater of Japan, which house rare collections.
Improved production efficiency has brought the price down to less than a third since then, and today ELP is receiving more orders from private music connoisseurs.
It has sold some 800 units.
Producing the players is a highly labor-intensive affair, and only 15 units can be made per month. At present, 10 workers are racing to clear a backlog of 30 orders.
Chiba said his office receives inquiries every day from overseas. Curiously, a number of orders are coming from Russia, Poland and Yugoslavia. He said he does not know why they are concentrated in Eastern Europe.
In this digital age, mass production and mass consumption will only intensify. For small companies to survive, Chiba said, they must return to the analog format, he said.
“In digital products, it is hard to differentiate yourself from rivals because it’s basically a world of 0 or 1,” he said. “In such competition, only the largest one can survive, with its volume advantage.”
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