| Jereel Hunter said: You ask if I'm still talking, and yet you post walls of text that barely relate to the points I make. 1) You seem to be inventing numbers that I used. I didn't mention numbers about the impact of cutting the employees. I merely stated that cutting 10,000 employees comes at a price, in addition to the savings related to a reduced workforce. Yes, Sony can cut down their number of TV models and streamline their production to reduce the cost of TV's per model. That was never disputed. 2) "I didn't say ONLY SONY TVS LOSE MONEY. I said Sony tvs are the one thing holding Sony from profitability. It would be wise for you to make these distinctions in future arguments... Yes Sony Ericsson loses money." I didn't realize a division that loses money didn't hold back a company from profitability. My bad. 3) Noone's arguing that PlayStation isn't a Sony pillar. But its current success came at the cost of incredibly massive losses early in the generation. The point is Sony has a track record of making expensive decisions which don't pan out as well as they'd like in the long-term. 4) To paraphrase what you said - Sony isn't geared for the current economy, and has many eggs in an unprofitable basket. Sony is competing with people who produce equivalent products at a lower cost. Sony is rife with inefficiency. Does this give Sony areas to tighten up in order to make themselves profitable? Yes. But it can't happen overnight. Sony is claiming this massive turnaround will result in profit within the year. So despite currently running deep in the red, and adding on the nearly $1 Billion they anticipate in restructuring costs, they expect to make this turnaround fast enough to be in the black for the next fiscal year. Right now, they've got a blueprint for areas to tighten up, but it's not a switch they flip. They don't hand over the $926 million in estimated restructuring costs and overnight, they're a sleeker, profitable company. They need to modify production, redirect assets, redesign products, etc, then they need sales to increase accordingly. You act as if I am foolish to question the direction of Sony, but so far the only thing Sony has given is words. Let's look at facts. 12 years ago, Sony had a market cap over $100 Billion, and were profitable. They have steadily lost money (and thus shareholder confidence) in the last several years, to the point where their current Market Cap is $16.8 Billion. Kaz' announcement hasn't caused any sustained rise in stock price, which shows that the people who could bank some money on Sony's turnaround have chosen not to. Even your defense of Sony paints the picture of a lumbering, ineffective company not entirely prepared to fight on it's competitor's turf. Hopefully for Sony's sake they can change that. |
1) This is what you said:
"They are reducing costs, but the lost jobs also hit production and development. Claiming that they'll make new products to excite consumers is all well and good, but heavy workforce reductions make that easier said than done."
I demonstrated that Sony is already bloated and they can afford to trim product lines that are unnecessary. Related, and a counter-argument to yours.
2) While the sarcasm is noted:
Company A has 5 divisions, and division A makes 100M, Division B 200M Division C 300M DD -50M, and DE loses 600M. Division D is ericcson, Division E is tvs.
I said "This is a fact Jareel, and you can go ask kowen for confirmation, the tv segment has been the single thing holding sony out of profitability for several years now."
Your response was "Only their TV's lose money? That's a fact? Looks like Sony-Ericsson's lost some serious money."
Go look at the financial reports if you don't believe me.
3) You're on the right track with that thought, but not necessarily accurate. During times of good economic strength they do well with this strategy. It's just that they've always been ham-fisted with it, so now in times of short measure, they're coming up to fat to compete in the races. In better times, BR would have been explosive, and nobody would care about a 50$ difference. Now they do, and now that extra fat that Sony has is keeping them back.
So, it's not that they make "expensive decisions that don't pan out in the long term". It's "Sony generally makes expensive decisions, and this time did not work out in the long-term, primarily due to changing economic conditions."
4) The fact of the matter is that you said "sony cannot go from -7B to black. It's impossible.
You were right, that is impossible, but it's also an imaginary figure. 3B of it isn't losses, it's lost potential. And that is a major difference. So now we're working with a figure half that size. I already explained the many things they can do to change it, and you're right that it isn't an overnight change, but it is a POSSIBLE change, and that is what is important.
Right now that stock market is arguing whether that change is possible or not, and is dealing with a lot more than simple if they can or can't reach it. Like I said previously, stocks are about growth and if this return to black means they wil have to trim a lot of manufacturing capability, then it will effect their overall growth capability, which also decreases the stock value. Remember stocks are about potential to grow, not just whether they can hit sales targets. MS grows only like 5% a year, which is why their stocks also never grow by much. But they are massively powerful, how can their stocks not keep rising??!?! Right?
I believe that at the very least Sony is completely capable of returning to a profitable company. They have sony BMG, sony pictures, sony playstation. All are massively profitable. All their hardware is situated around these branches of software. They can possibly return to all content and then rebuild again, but they would lose a lot in the process.
What they need to do is stay big, pray for the economy to improve and cut the fat. That's all they need to do. They are like a massive representation of the typical 80s investor, reckless, on coke all the time and wasteful. They will adapt.
