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In late March, Sanyo Electric Co. (SANYY
) revealed it will likely post a $1.1 billion loss -- its worst ever -- for the year ended Mar. 31. Then the company announced an even bigger surprise. To turn things around, Sanyo selected Tomoyo Nonaka, a 50-year-old former TV journalist with no senior management experience and little knowledge of electronics. When she takes over as chairman and CEO on June 29, Nonaka will become one of the very few females running a major Japanese company. "I wasn't surprised at this appointment -- I was amazed," says John Yang, a Standard & Poor's (MHP
) equity analyst in Tokyo. "Given the lack of a track record, I'm not sure how Nonaka's going to turn Sanyo around."
There's no time to lose. Overall, net income from Sanyo's consumer unit dropped 20% through Dec. 31. In the year ahead Deutsche Bank (DB
) forecasts the company will eke out $94 million in profits but that total sales will shrink to $22.5 billion from $24 billion last year. The share price, down 37% over the past 12 months, reflects growing pessimism.
Sanyo believes Nonaka is the right person to shake things up. She attended Sophia University in Japan and the University of Missouri at Columbia in the U.S., then became one of Japan's best-known broadcasters, covering everything from royal weddings to the Olympics and business. After quitting television in 1996 she began serving on government advisory committees and corporate boards, including Sanyo's. As a relative outsider at the company, she may be able to make tough decisions -- such as trimming its workforce of 82,000 -- that a Sanyo lifer might not be willing to do.
Nonaka will have strong backing from Sanyo's new president, Toshimasa Iue. A grandson of Sanyo's founder and son of the current chairman, Iue was appointed the same day as Nonaka. The 42-year-old Iue has an MBA from Boston University and made his name at Sanyo after taking over its batteries division in 1999. He helped turn the operation into the industry leader by focusing on rechargeables and new lithium ion technologies, striking lucrative deals to provide batteries for Nokia Corp. (NOK
) phones and Ford Motor Co. (F
) hybrid cars. Today the unit is Sanyo's most profitable, with margins of 6%.
One of the most urgent tasks that the new team will face is buffing up Sanyo's tarnished image. Panasonic, (MC
) Samsung, and Sony (SNE
) are much better known and are perceived as far cooler than Sanyo. The company "has not been good at attracting customers in an era of so much choice," Nonaka told reporters after her appointment. Sanyo is betting that this former broadcaster will do a better job getting the message across. By Ian Rowley, with Hiroko Tashiro, in Tokyo