When the queen doesn’t like your products you know you’re in trouble.
Howard Stringer was officially made Sony Corp.’s new chief executive officer (CEO) Wednesday at a company shareholder meeting in Tokyo. In remarks about how he plans to turn the troubled electronics maker around, the Welsh-born executive put a new spin on the mantra “the customer is king.”
He recounted a luncheon with the U.K.’s Queen Elizabeth II, where the conversation turned to Sony’s products.
“I have a lot of trouble with your remote controls,” The Queen told him, according to Stringer. “Too many arrows.”
Making Sony’s products better and easier to use is one part of Stringer’s plan to recover ground on rivals and regain Sony’s electronics crown, he said. Job cuts are also on the horizon.
Sony’s shareholders overwhelmingly approved Stringer’s appointment, along with that of Ryoji Chubachi, who was made Sony’s president and CEO of its electronics business. More than 5.6 million votes were cast in favour of the changes, and 114,527 against, as 6,449 shareholders, the largest turnout at a shareholder meeting in Sony’s history, packed into a Tokyo hotel for a close-up view of the new CEO.
The appointment of 63-year-old Stringer, who holds U.S. citizenship, marks the first time a foreigner has taken the helm at Sony, which last year saw about 70 per cent of its sales come from outside of Japan. It also represents a radical shakeup of the sprawling giant, which has struggled in recent years to make a profit in its core electronics business and keep its leadership status, as consumer electronics goods move from analogue to digital.
Stringer’s first act as CEO was to reassure shareholders.
“I am a foreigner. I was born in Wales. I live in America and now I live in planes, but I am first and foremost a Sony warrior,” he said.
Stringer was named in March to replace Nobuyuki Idei after it became clear that Idei’s plan to improve Sony’s profit margins had failed. That plan, dubbed TR60 in recognition of Sony’s 60th anniversary in 2006, aimed to boost the company’s profit margins to at least 10 per cent in the fiscal year ending March 2007. But in January, Sony said it would not meet its earnings forecast for a second year in a row.
Sony has been hit hard in recent years by increasing competition in the digital consumer electronics market, where margins are thin. Many of its audio and TV products have become also-rans behind those of rivals such as Sharp Corp. and Matsushita Electric Industrial Co. Ltd., known for its Panasonic brand.
Stringer said at a news conference in March that Sony needed restructuring, although he wasn’t specific about what he wants to do, saying he would disclose his plans in September.
On Wednesday, answering questions at the shareholders’ meeting, he said Sony was besieged by competitors and confessed that his own family thought him “insane” to take on the top job. He also gave some broad hints about how he plans to turn the company around.
“We have so many rivals it’s frightening. The week after next I will meet Bill Gates and Steve Jobs and I will (shake hands and) look down and see if I still have a hand,” he said.
The former chairman and CEO of Sony Corp. of America said the number-one priority remains making the electronics business profitable. He sought to reassure shareholders that his background in the movie business would not hinder that process.
“Entertainment supports electronics. It’s not…more important than electronics,” he said.
Sony has great engineers and technology, Stringer said, but needs better, easier-to-use products to shore up the company’s brand. The depth of its problems means he will also have to cut jobs, although he promised to do so carefully.
“I know I cannot use an ax in Japan, but we need to change. I have to be tough (and) it’s my responsibility to be tough…because this company is too great to fail,” he said.
Among the other appointments approved Wednesday was that of Katsumi Ihara, who became the new number-three at the company as an executive deputy president and president of Sony’s Home Electronics Network Company. The new chief financial officer is Nobuyuki Oneda, who also became an executive vice-president.
Idei was made chief corporate advisor, and outgoing president Kunitake Ando is now an advisor.