Sony Warrior Hints at Retrenchment

Sir Howard Stringer announced plans for an overhaul at Sony yesterday after being approved by shareholders as the Japanese company's first foreign chief executive.

Sir Howard, who has joint US-British citizenship, was appointed in the hope that he will repeat his successful stint in charge of Sony's music and movie division in the America.

He and other members of the new board faced tough questioning at the two-hour meeting with 6,000 disgruntled shareholders in Tokyo. They were asked to explain their plans for reviving the once dominant firm whose share price is half what it was five years ago and whose core electronics division has been stuck in the red for two years.

Declaring himself "first and foremost a Sony warrior," he said he would announce a strategy in September expected to include cuts to Sony's product range and reductions in struggling businesses.

"We cannot fight battles on every front," Sir Howard, 63, said. "We have to make choices, and that is why this summer we will get together and decide what the company's priorities ought to be."

Sony's electronics and entertainment divisions are coming to the end of a three-year, 330bn yen (£1.6bn) cost-cutting plan, but analysts say Sony will have to be more ruthless to compete with domestic and regional rivals in new products such as flat-screen TVs.

Sony's television unit lost ¥25.7bn on an operating basis last year owing to poor sales of cathode ray tube TV sets; the firm has also lost out to Apple's iPod in the expanding market for portable music players.

On a brighter note, Sony is expected to use its extensive library of films, acquired through its stake in Metro-Goldwyn-Mayer and Columbia Pictures Entertainment, in an attempt to increase digital output via broadcasters and next-generation DVDs.

Sir Howard oversaw thousands of job cuts in the US, but admitted that repeating the feat would be harder in Japan. "I know I cannot use an axe in Japan, but we need to change. The world has changed and we have more competitors than ever." His appointment was approved by an overwhelming majority of shareholders, after his predecessor, Nobuyuki Idei, noted: "The question is not whether someone is Japanese or a foreigner. The more important question is that person's managerial competence and what kind of spirit he possesses."