Kazuhiro Tsuga, the new head of Japan’s sprawling electronics maker Panasonic Corp, has set a priority to get the lumbering and loss-making company to make decisions quickly.<\/p>\n
The 55-year-old, three-decade Panasonic veteran replaces Fumio Ohtsubo, 66, who moves to the chairman’s office where he will still wield some influence over business strategy in a corporate culture that tends to take its time when it comes to making decisions.<\/p>\n
“My main concern is whether I can instill a sense of speed,” Tsuga told reporters at a briefing on Wednesday.<\/p>\n
Panasonic, founded as a plug maker almost a century ago when Japan embraced electricity, has to move rapidly. It has warned of a record 780 billion yen ($9.7 billion) loss for the year to end-March.<\/p>\n
Much of that – some 580 billion yen – is for restructuring operations and cutting costs, particularly in the struggling TV business, which Tsuga has led since April.<\/p>\n
But he comes to the top job with a record for taking tough decisions and turning businesses around.<\/p>\n
A fluent English speaker who completed his education in California, Tsuga last year unveiled plans to end production at a plasma panel plant in the southern industrial city of Amagaski, which had only been completed two years earlier and had capacity to produce 330,000 screens a year.<\/p>\n
He will be Panasonic’s youngest chief from outside the group’s founding family, and his appointment is something of a departure in Japan, where promotion is traditionally age-based.<\/p>\n
“At 55, I don’t feel that young,” he quipped.<\/p>\n
Turning down the volume<\/strong><\/p>\n Tsuga has said he will pursue profit over volume, and pledged to get the ailing TV business back on a firm footing within 2 years.<\/p>\n That will be some challenge, and analysts say the blood letting – Ohtsubo’s cost-cutting axed 17,000 jobs – may not be enough if TV sales continue to shrink.<\/p>\n By 2015, flat panel industry research company DisplaySearch reckons annual global sales of liquid crystal TVs will contract by 8 percent to $92 billion. Plasma sets, a market Panasonic dominates, will decline 38 percent to $7 billion.<\/p>\n Even the deep staff cuts leave the sprawling conglomerate fatter than its rivals. The group’s vast product range stretches from refrigerators, TVs and sound systems to batteries and nose-hair trimmers, as well as running old folks’ homes.<\/p>\n A global workforce of 350,000 is treble that of Samsung Electronics, double Sony’s and 60,000 more than General Electric, whose revenue is $30 billion higher.<\/p>\n For every worker, Panasonic generates revenue of around 23 million yen ($285,700) a year, compared with nearly 43 million yen at Sony and over 55 million yen at Sharp, Thomson Reuters data shows.<\/p>\n In the driver’s seat<\/strong><\/p>\n Tsuga, a keen golfer who also enjoys driving, has spent much of his career in research, and studied computer science at the University of California, Santa Barbara.<\/p>\n A native of Osaka in western Japan, Panasonic’s home city, he was singled out as someone to watch after he led negotiations in the mid-1990s with other consumer electronics makers to fix a standard for DVDs.<\/p>\n That reputation was further enhanced in 2009 when he was in charge of the automotive systems business and was credited for a quick turnaround in Panasonic’s car navigation business in the wake of the global financial crisis.<\/p>\n Repeating that group-wide is likely to be tougher.<\/p>\n During Ohtsubo’s 6-year presidency, Panasonic shares lost two thirds of their value, double the decline on the benchmark Nikkei average over the same period.<\/p>\n Joining Panasonic in eroding stock value are Sony and Sharp Corp. All three trade at below book price – effectively the value of their assets that shareholders would get if the companies were liquidated – against a domestic sector average of 1.58 times book, according to Thomson Reuters data.<\/p>\n The three combined expect to lose $17 billion this year, highlighting the savaging of Japan’s electronics industry by foreign rivals led by Samsung, weak demand and a strong yen.<\/p>\n Panasonic’s long-term debt – it has close to $13 billion of bonds issued – is now more than a quarter of its total capital and has been growing steadily over the past 5 years. The industry mean is below 5 percent.<\/p>\n Yet it’s not only bond and equity investors who are looking to Tsuga to engineer a rebound.<\/p>\n Sitting alongside him at a flower-bedecked table at the Tokyo press conference, Ohtsubu reminded his successor of his own expectation for a V-shaped earnings recovery.<\/p>\n “I don’t mean for this to pressure him, but the restructuring I did was necessary to ensure a rebound in profitability next business year,” Ohtsubo said, glancing over at Tsuga.<\/p>\n Panasonic shares rose as much as 3.9 percent on Wednesday to a 4-month high, and closed 1.5 percent higher at 759 yen.<\/p>\n The stock has rebounded 30 percent this month since the group warned of its record full-year loss, giving it a market value of around $23 billion, more than Sony and almost three times bigger than that of Sharp.<\/p>\n","protected":false},"excerpt":{"rendered":" Kazuhiro Tsuga, the new head of Japan’s sprawling electronics maker Panasonic Corp, has set a priority to get the lumbering and loss-making company to make decisions quickly.<\/p>\n","protected":false},"author":7,"featured_media":5360,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[25,1768,479,1205],"class_list":["post-6956","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hardware","tag-active","tag-kazuhiro-tsuga","tag-panasonic","tag-sharp"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/6956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=6956"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/6956\/revisions"}],"predecessor-version":[{"id":6960,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/6956\/revisions\/6960"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/5360"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=6956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=6956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=6956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}