Stringer, 67, will assume the expanded role from April 1, Tokyo-based Sony said today. Chubachi, 61, will become vice chairman in charge of product safety, quality and environmental issues.

The reassignment of Chubachi, a 32-year veteran at Sony, may help clear the way for Stringer to reorganize the company as the global recession erodes sales. Sony is cutting 16,000 workers and shutting plants to weather a slump that forced the worlds second-largest maker of consumer electronics to forecast a record 260 billion yen ($2.7 billion) full-year operating loss.

“The Japanese cant take decisive actions toward their comrades during hardship,” said Yuuki Sakurai, general manager of financial and investment planning at Tokyo-based Fukoku Mutual Life Insurance Co., which manages $54 billion in assets. “As a non-Japanese without such loyalties, Stringer is better positioned to conduct the large-scale restructuring that Sony has to do.”

Sony rose 2 percent to close at 1,668 yen on the Tokyo Stock Exchange before the companys announcement, while the Nikkei 225 Stock Average climbed 1.5 percent. The stock fell 69 percent in 2008, after gaining for four straight years.

Non-Japanese Head

Stringer, a Welsh-born U.S. citizen, became the first non- Japanese to head Sony when he was appointed in June 2005. Before joining the electronics maker in May 1997, Stringer was president of CBS Inc., where he stayed for three decades, and chief executive officer of media and technology company TELE-TV.

Chubachi spent much of his career at Sony working in the recording media business and was instrumental in developing the 8-millimeter video camera, according to the companys Web site. He became president in June 2005.

“Chubachi personifies Sonys enthusiasm for hardware, while Stringer represents its software focus,” Sakurai said. “The company has now concluded it cant focus on both.”

Stringer said in December 2007 he plans to connect Sonys flagship PlayStation 3 console with its other electronics such as mobile phones as part of a growth plan starting this fiscal year ending March 31. The strategy builds on plans by Nobuyuki Idei, who Stringer replaced amid investor discontent over failure to meet business targets.

New Groups

The company said today it will combine its VAIO personal- computer, Walkman and Sony Computer Entertainment game businesses in the newly formed Networked Products & Services Group to focus on creating gadgets that can work with each other and connect to the Internet. Kazuo Hirai, 48, whos in charge of the game business, will head the new division.

The electronics maker said it will also create a software and technology team and a manufacturing and procurement team across divisions to bolster connectivity of products and services and save costs.

“These moves are bolder than we had anticipated and are positive,” Hitoshi Kuriyama, an analyst at Bank of America Corp.s Merrill Lynch & Co., wrote in a report. “We believe the new management and organization will be effective in bringing out Sonys potential in this new networked age.”

Cost Savings

The reorganization will allow the company to save $3 billion in costs in the year starting April 1, more than the previously estimated $2.5 billion, Stringer said at a briefing in Tokyo.

The new management team will face the challenge of reviving earnings when demand for electronics, computers and mobile phones is falling because of the recession. The company will probably be unprofitable until next fiscal year, according to the average of analyst estimates compiled by Bloomberg.

“This is the worst recession of our lifetime,” Stringer said. “But in difficult times, there is opportunity.”

Sony said its chip, electronic devices, and chemical and energy businesses, including batteries, will remain under its Semiconductor & Component Group.

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