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Sony chief outlines turnaround plan

TOKYO - Sony Corp.'s 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 many analysts said his plan lacked creativity and vision for a world in which consumer electronics companies are being forced to adapt nimbly to shifting information and entertainment consumption patterns brought on by the Internet and wireless revolutions.

Those same analysts did not, however, deny the need for cost cuts, which included slashing 10,000 jobs, or about 6 percent of Sony's global work force, by the end of March 2008.

The shakeup also calls for closing 11 of Sony's 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, acknowledged that times have changed. Unlike the old days when Sony ruled electronics with its manufacturing finesse, it faces tough competition and cheaper prices that are turning Sony products into mere "commodities," he said.

"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 PlayStation3 next-generation video game console, Bravia liquid crystal display televisions and Walkman MP3 music players - whose sales are miserably far behind those of Apple Computer's iPod.

Analysts were not impressed by Stringer's game plan.

Instead of deciding on spinoffs or outlining a clearer way of relating electronics with entertainment, Sony's proposal sounded much like other plans to streamline the corporate structure to eliminate redundancies, 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."

Slightly more upbeat was analyst Mitsuhiro Osawa of Mizuho Investors Securities. Osawa said the direction Sony laid out was fundamentally sound, and all Sony must do is show results, especially during the Christmas shopping season.

"If there had been good surprises in the announcement, the news would have been positive," Osawa said. "There weren't any surprises and so the news was neutral."

[Last modified September 23, 2005, 02:45:59]