* CEO Stringer to replace electronics head Chubachi
* Sony reorganizes electronics businesses to stem losses
* U.S. shares rise 3.2 percent
(Adds CEO quotes, background)
By Kiyoshi Takenaka and Nathan Layne
TOKYO, Feb 27 Sony Corp (6758.T), facing a
record loss this year, said Chief Executive Howard Stringer
would take direct control of the ailing electronics arm at the
center of its problems in a bid to rebuild the company's
reputation for hit products.
Stringer will become company president in place of Ryoji
Chubachi, who now runs the electronics division. Chubachi, an
engineer who rose through the ranks, will become vice
The shake-up consolidates Stringer's control of the
sprawling conglomerate and may make it easier to unite factions
that analysts say have hindered Sony's ability to replicate the
success of its legendary Walkman portable music player.
"This is an important first step, and perhaps, by this, the
rating of management of Sony gets reassessed," Macquarie
Securities analyst David Gibson said.
"Everyone kind of likes what Stringer does but knew that he
was working with a tough supertanker to turn."
Sony shares trading on the New York Stock Exchange rose 52
cents, or 3.2 percent, to $16.77 on Friday morning.
Sony has been crippled by tough competition against all its
major products. It trails Apple Inc's (AAPL.O) iPod in portable
music and Nintendo's 7974.OS Wii in games, and is losing
money on liquid crystal display TVs.
The management reshuffle comes about a month after Sony
warned it would post an annual operating loss of 260 billion
yen ($2.7 billion) for the year to March 31, hit by sliding
demand and a strong yen. [ID:nT20158]
The maker of Bravia flat TVs outlined plans in December to
streamline production and cut 16,000 jobs in the second major
restructuring since Stringer, a former journalist who rose up
the ranks of U.S. television network CBS, became CEO in 2005.
"It's a very difficult time, but in difficult times ...
there's opportunity," Stringer told a news conference. "This
today is an opportunity that I welcome to put in a new team of
management to add to the excitement of our company."
Stringer also said the maker of Cyber-shot digital cameras
now plans to cut costs by more than $3 billion in the year
starting April 1, up from $2.5 billion announced last month.
Sony's No. 3, Katsumi Ihara, who like Chubachi has been
with the company for about three decades, will move to Sony
Financial Holdings (8729.T), the insurance and banking arm.
A FREER HAND
The previous structure had been designed to twin Stringer's
command of TV programming and other content with Chubachi's
expertise in technology to unlock value across an empire that
ranges from electronics to movie making and music.
Stringer now will have a freer hand to accelerate reforms,
one fund manager said.
"It's positive for Sony," said Koichi Ogawa, chief
portfolio manager at Daiwa SB Investments. "It has to bite the
bullet and needs drastic job cuts and restructuring in the
loss-making television sector to turn the business around.
"A foreign CEO would fit much better for such a tough
As part of the overhaul, Sony plans to set up two new
business groups. One will cover network-oriented products and
services, such as PlayStation video game operations and Vaio
personal computers. The other will handle TVs, digital cameras
Sony plans to make 90 percent of its electronics product
categories network-enabled and wireless-capable by the year
starting April 2010, moving into the direct line of fire with
Apple and Microsoft Corp (MSFT.O).
The game and PC unit will be headed by Kazuo Hirai, head of
Sony's video game business, while the TV, digital camera and
camcorder operations will be led by Hiroshi Yoshioka, who
currently oversees its TV business.
Sony will also establish one unit to develop common
software and technology for the group and another to promote
efficiency in manufacturing, procurement and logistics.
Some investors have doubts that Stringer can turn the
company around. Sony's stock has lost more than half its value
since he became CEO in 2005.
"I don't know the reason for Chubachi's stepping down,"
said Fujio Ando, senior managing director at Chibagin Asset
Management. "But I don't expect much change from the firm just
by Stringer doubling in the role of president."
(Additional reporting by Taiga Uranaka, David Dolan, Yuko
Inoue and Franklin Paul in New York; editing by Rodney Joyce,
Karen Foster and Lisa Von Ahn)