Sony Corp. Chief Executive Officer Kazuo Hirai is treating his TV unit like another Chrysler Group LLC: An ailing business that can be revived with sufficient cash. Investors say it’s more like General Motors’ former Oldsmobile division — that is, better shuttered than saved.
Hirai has pledged to make profits at the TV unit by March 2014 after losing $8.7 billion in the past eight years. He cut the number of models and ended a panel-making venture as part of his turnaround plan. Investors say it’s too much effort for too little return.
“Sony would be better off without the TV business,” said Tetsuro Ii, president of Commons Asset Management Inc. in Tokyo, which owns no Sony shares. Investors, he said, “are hoping the company won’t end up becoming like GM,” and he will only buy its stock when Sony “shows the competitive advantage it used to have over global peers.”
Sony earlier cut its sales target to 15.5 million units from 17.5 million. Struggles with the unit have contributed to four consecutive annual financial losses for Sony and a 92 percent plunge in its market value since a peak about 12 years ago.
It will take another three years of losses before TVs become profitable again, according to the average of four estimates compiled by Bloomberg.
Sony was downgraded twice this year by Moody’s Investors Service and Standard & Poor’s. Both ratings companies have questioned whether Sony can ever recover in the TV market.
Hirai, who took over from Howard Stringer in April, has slashed the number of Bravia models in the U.S. to 22 from 40 to cut costs.