Sony Corp. has named Kazuo Hirai to take over as its president and CEO, heralding the end of the seven-year tenure of Welsh-born American Howard Stringer.
Stringer cut about 20,000 jobs while at the helm of the electronics maker but was unable to find the hit products the company needed to turn around lackluster sales. Sony recorded net losses for three straight years to fiscal 2010. Another net loss is expected for fiscal 2011.
The company’s troubled TV business, a key obstacle to profitability, is forecast to record its eighth consecutive annual operating loss in fiscal 2011, leading to mounting calls for top management to take responsibility.
Hirai, who at 51 is 18 years younger than Stringer, will become the youngest Sony president since the company’s co-founder Akio Morita when he replaces Stringer as president and CEO on April 1. Morita was 50 when he took charge.
Stringer will also step down as chairman of the company at a regular shareholders’ meeting in June, and will be made chairman of the board of directors, a separate position from the company chairmanship.
Hirai, currently executive deputy president, will have to restructure the firm in the teeth of an extremely difficult business climate, with a soaring yen pushing up the cost of Japanese-made products abroad and the European debt crisis threatening global demand.
He joined Sony’s subsidiary Sony Music Entertainment (Japan) Inc., previously named CBS Sony Record Inc., in 1984 and has built up a strong track record in software.
His ascent to the presidency was already decided when he was promoted to deputy president last spring. Until that promotion, he had never been in charge of one of Sony’s electronic businesses, the area where Sony faces most challenges, and because of that gap in his resume, Stringer considered letting Hirai replace him as president and as CEO at different times.
Stringer discussed his resignation with external directors on Feb. 1, according to Sony sources, and concluded that a staggered handover could delay urgent managerial decisions. The discussions led to the arrangement under which Stringer will assume the post of chairman of the board of directors to support Hirai, while Hirai will be vested with all of the reins of management.
Hirai will inherit Stringer’s strategy of integrating software and hardware businesses, pitching packages that encourage customers to download Sony-distributed movies and music on its TVs and tablet computers. Apple Inc. has established a healthy lead with a similar strategy.
Stringer succeeded Nobuyuki Idei as company chairman and CEO in June 2005 and took over as president in April 2009. Depressed economic conditions following the collapse of the U.S. investment bank Lehman Brothers Holdings Inc. in fall 2008 forced an aggressive rationalization program.
(This article was compiled from reports by Satoru Daiguji and Shohei Makiuchi.)
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