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Sony executives apologized Tuesday for inconvenience caused by a massive global recall in laptop batteries, but said the problems were now fixed and that none of the company's top leaders would resign over the incident.
The embarrassing spate of battery recalls that is threatening to tarnish the once impeccable Sony brand power is coming at a time when Sony has been struggling to turn around its core electronics business.
It could hurt the Japanese electronics and entertainment company's sales during the critical year-end shopping season. For some, Sony's woes have shaken this nation's confidence in its long prized manufacturing prowess.
Sony slashed its profit forecasts last week, citing the battery recall as well as price cuts in Japan for the next-generation PlayStation 3 video game console. Sony expects an 80 billion yen ($673 million) profit for the fiscal year through March 2007 with battery like Sony VGP-BPS13 battery , Sony VGN-FW19 battery , Sony VGP-BPL21 battery , Sony VGP-BPS21 battery , Sony VGP-BPS6 battery , Sony VGP-BPS2C battery , Sony VGN-C25G battery , Sony PCGA-BP3T battery , Sony PCG-TR1/B battery , Sony PCGA-BP52 battery , Sony VGP-BPL26 battery , Sony VPCCA190 battery , down 38 percent from its projection in July.
John Yang, equity analyst with Standard & Poor's in Tokyo, said the recall problem is unlikely to devastate Sony's battery operations because only a handful of major companies compete in that business.
"It's definitely making a dent in Sony's image," he said. "But if Sony does well with games and LCD TVs, Sony still has a chance to come back as one of the major players."
Sony Corp said improvements in production, design and inspection have been made to prevent a recurrence of any laptop overheating problems. Company officials said the problems were caused by microscopic metal particles that mistakenly got inside the battery, causing short-circuiting.
Sony said last week that about 9.6 million lithium-ion batteries, manufactured between August 2003 through February this year, are being recalled worldwide after reports of some computers using the Sony battery packs overheating and bursting into flames.
Top management, including Chief Executive Howard Stringer and President Ryoji Chubachi, would stay on at the company and make the successful completion of the recall a priority, Sony officials said.