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Stringer Shakes Up Struggling Sony

Stringer Shakes Up Struggling Sony

Sony CEO Howard Stringer has taken some sharp measures to revitalize the battered company, including the assumption of the president's role and the reorganization of several important business operations into new units with new leadership.

By Jeff Meisner E-Commerce Times ECT News Network
02/27/09 12:03 PM PT

Sony CEO Howard Stringer has taken over the stumbling company's main consumer electronics business after removing Ryoji Chubachi from the helm.

Stringer, who has been with Sony since 1997 after a long career in television, will replace Chubachi as president.

Chubachi has been reassigned; the 32-year Sony veteran will become vice chairman of product safety, quality and environmental issues.

The changes will become effective April 1.

The company will also reorganize its various businesses into several new groups.

The global recession and political infighting within Sony have conspired to besiege Japan's largest consumer electronics company with mounting problems. The company forecast a record US$2.7 billion loss for 2009.

Sony's stock was up 2.58 percent to $16.67 per share in mid-day trading on Friday.

New Plan

Sony said Friday it would combine its Vaio computer, Walkman and Sony Computer Entertainment game businesses in a new unit -- the networked products and services group.

The new group's focus will be to develop devices that can work with each other and connect to the Internet. Kazuo Hirai, 48, who's in charge of the game business, will head the new division.

The company's Bravia LCD (liquid crystal display) televisions, Cyber-shot digital camera, and audio and video operations will form the new consumer products group. Hiroshi Yoshioka, 56, who now heads the TV unit, will take charge of the division, Sony said.

A Long Time Coming

"This should have happened four years ago," said Rob Enderle, principal analyst at the Enderle Group. "The big problem with Sony is the lack of authority at Stringer's level. You put a guy like Stringer in charge and don't give him the tools he needs to fix the company. There's concern that it might be too late, but it's absolutely the right way for the company to go."

Stringer was one of the few executives at Sony who recognized years ago that the company needed to make changes, Enderle told the E-Commerce Times.

"He is the least tied to the old way of doing things at Sony," he noted.

For years, Sony has been hampered by infighting among top management, but it's taken massive losses and a global recession to bring that reality sharply into focus for the company's board of directors, said Enderle.

"This is the first step to cleaning house and getting everybody on the same page," he observed. "Stringer's going to discover that people at the lower level are going to be resistant to change, and he's going to get rid of them and replace them with people who know how to follow orders."

Still a Strong Brand

Despite its management issues, Sony remains a company with a solid reputation for making quality consumer electronics products. However, the company needs to find the right product mix to bring to consumers, Enderle said.

"The PS3 needs to be rapidly replaced," he said. "It's carrying too much cost, and it's priced out of the segment. I think they need to bring in something much more competitive. The PlayStation for a long time was Sony's version of the iPod."


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