Sony's New CEO Promises Big Cuts
FILE - A May 11, 2005, file photo shows the exterior of the AMC Grand 24 movie theatre in Dallas, Texas. A Chinese conglomerate has announced Monday May 21, 2012 it will buy U.S. cinema chain AMC Entertainment Holdings for $2.6 billion to create the world's biggest movie theater operator. (AP Photo/Ron Heflin/file) / RON HEFLIN
Sony's new chief executive Howard Stringer, the first foreigner to head the Japanese electronics and entertainment company, promised a decisive turnaround Thursday centered on cutting jobs, closing plants and shedding unprofitable businesses.
But analysts said his plan lacked vision and creativity, although they didn't deny the need for the cost cuts, which included slashing 10,000 jobs, or about 6 percent of Sony Corp.'s global work force by the end of March 2008.
The shake-up also called for closing 11 of its 65 manufacturing plants and shrinking or eliminating 15 unprofitable electronics operations by the same deadline. Sony refused to say what those businesses were.
Stringer, a British-American dual citizen and former president of CBS News, acknowledged that times have changed. Unlike the old days, when Sony ruled electronics with its manufacturing finesse, it now faces tough competition and cheaper prices that are turning Sony products into mere "commodities," he told reporters at a Tokyo hotel.
"Staying ahead of this curve by offering the consumer truly differentiated products where we can maintain our standing as a premium brand is a fundamental strategic imperative," Stringer said. "We need to focus selectively and aggressively on being the No. 1 consumer electronics and entertainment company on the planet."
Sony said it would focus now on so-called "champion products" including the PlayStation 3 next-generation video-game console, Bravia liquid crystal display televisions and the Walkman MP3 music players — which have fallen miserably behind Apple Computer Inc.'s iPod.
Analysts were not impressed. Instead of deciding on spin-offs or outlining a clearer way of relating electronics with entertainment, Sony's proposal sounded all too similar to other plans to streamline company structure to avoid duplication, they said.
"If I had to give a grade to Howard Stringer, I'd give him a C-plus," said John Yang, analyst with Standard & Poor's in Tokyo.
"Sony still wants to be the master of the universe. They want to conquer entertainment; they want to conquer consumer electronics; they want to conquer games," Yang said in a telephone interview.
Founded more than a half-century ago, Sony over the decades has symbolized Japan's stunning modernization exemplified in the Walkman and PlayStation video-game consoles.
But the company has never really made good on its promise to generate a dynamic ballooning of profits by linking its electronics operations with its movies and music units, although the popular "Spider-Man" series have helped maintain profits in troubled times.
The company has been criticized for falling behind in slimmer TV models, such as liquid-crystal and plasma display sets, losing market share to South Korea's Samsung Electronics Co. and domestic rivals Sharp Corp. and Matsushita Electric Industrial Co., which makes Panasonic brand goods.
© 2009 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. But analysts said his plan lacked vision and creativity, although they didn't deny the need for the cost cuts, which included slashing 10,000 jobs, or about 6 percent of Sony Corp.'s global work force by the end of March 2008.
The shake-up also called for closing 11 of its 65 manufacturing plants and shrinking or eliminating 15 unprofitable electronics operations by the same deadline. Sony refused to say what those businesses were.
Stringer, a British-American dual citizen and former president of CBS News, acknowledged that times have changed. Unlike the old days, when Sony ruled electronics with its manufacturing finesse, it now faces tough competition and cheaper prices that are turning Sony products into mere "commodities," he told reporters at a Tokyo hotel.
"Staying ahead of this curve by offering the consumer truly differentiated products where we can maintain our standing as a premium brand is a fundamental strategic imperative," Stringer said. "We need to focus selectively and aggressively on being the No. 1 consumer electronics and entertainment company on the planet."
Sony said it would focus now on so-called "champion products" including the PlayStation 3 next-generation video-game console, Bravia liquid crystal display televisions and the Walkman MP3 music players — which have fallen miserably behind Apple Computer Inc.'s iPod.
Analysts were not impressed. Instead of deciding on spin-offs or outlining a clearer way of relating electronics with entertainment, Sony's proposal sounded all too similar to other plans to streamline company structure to avoid duplication, they said.
"If I had to give a grade to Howard Stringer, I'd give him a C-plus," said John Yang, analyst with Standard & Poor's in Tokyo.
"Sony still wants to be the master of the universe. They want to conquer entertainment; they want to conquer consumer electronics; they want to conquer games," Yang said in a telephone interview.
Founded more than a half-century ago, Sony over the decades has symbolized Japan's stunning modernization exemplified in the Walkman and PlayStation video-game consoles.
But the company has never really made good on its promise to generate a dynamic ballooning of profits by linking its electronics operations with its movies and music units, although the popular "Spider-Man" series have helped maintain profits in troubled times.
The company has been criticized for falling behind in slimmer TV models, such as liquid-crystal and plasma display sets, losing market share to South Korea's Samsung Electronics Co. and domestic rivals Sharp Corp. and Matsushita Electric Industrial Co., which makes Panasonic brand goods.
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