Sony named Howard Stringer as its chairman and chief executive today, marking the first time a foreigner will head a major Japanese electronics...
TOKYO — Sony named Howard Stringer as its chairman and chief executive today, marking the first time a foreigner will head a major Japanese electronics company and comes as Sony seeks to improve results at faltering core electronics business.
A former CBS president, Stringer, who is Welsh and speaks no Japanese, has overseen Sony’s entertainment business, one of the company’s few bright spots in recent years. He replaces Nobuyuki Idei, who has led Sony for a decade.
The management changes come at a time when fears are growing about Sony’s ability to revive its electronics operations, which have been battered by cheaper competition from Asian rivals.
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The decision was made at a board meeting today, subject to shareholders’ approval in June, Sony said.
In another shakeup, Kunitake Ando will step down as Sony president and will be replaced by Ryoji Chubachi, an executive with experience in Sony’s electronics and networking divisions.
Koya Tabata, an analyst with Credit Suisse First Boston Securities (Japan) in Tokyo, said Stringer already works well with Sony’s Japanese and electronics employees.
Having a foreigner at the helm is a plus for a company like Sony, which makes much of its profits abroad and has a high portion of foreigners among its shareholders, he said.
“It’s fascinating as a symbolic change that Sony’s leader will be a foreigner,” Tabata said. “Idei was good at drawing a picture for a strategy but he lacked the power to carry it out.”
Idei, 67, said the time was ripe to hand over leadership to a new team.
Tokyo-based Sony, which also has entertainment businesses, such as movies, music and video games, has been struggling amid nose-diving prices of electronics products and has relied on hit movies to boost profits.
Products that were once pillars of Sony’s power, such as TVs and portable players, have declined in sales in recent years. Cheaper electronics goods from Asian and other rivals have been a problem.
In recent years, competition from South Korean rival Samsung Electronics has battered Sony, and Sony has set up a joint venture with Samsung in liquid-crystal displays.
Sony has also fallen behind Japanese rivals such as Sharp in liquid-crystal display TVs and Matsushita Electric Industrial, which makes Panasonic brand products, in the DVD recorder market.
Analysts also say Sony missed the boat with portable music players by delaying a release of products to play MP3 music files, taking a beating from the iPod by Apple Computer.
What was dubbed “Sony shock” happened two years ago, when Sony share prices dropped on worse than expected earnings results.
Although Sony’s profits have since improved, they have not made a dramatic revival.
Hit in Hollywood
Movies “Spider-Man” and “Spider-Man 2” have been among the few bright spots in Sony’s otherwise faltering performance.
Stringer, 63, who holds dual British and U.S. citizenship, has overseen the company’s entertainment operations, including the recent acquisition of a consortium of U.S. film and television studio Metro-Goldwyn-Mayer MGM.
Sony said the management transition would begin immediately but that the changes would become official June 22, subject to approval at a general shareholders’ meeting on the same day.
Ken Kutaragi, known as the father of the PlayStation game console and thought to have been a candidate for the top job at Sony, will resign his spot on the board and lose his position as executive in charge of semiconductors and home electronics.
Kutaragi will remain atop the game division and take on the new title of group executive officer April 1, Sony said.
Sony was established by engineers in 1946 as a maker of telecommunications and measuring equipment following the end of World War II.
Information from Reuters was included in this report.