Home > News > Company News > Nippon Sheet Glass's Naylor Resigns Amid 'Disagreements'

Nippon Sheet Glass's Naylor Resigns Amid 'Disagreements'

Post Time:Apr 19,2012Classify:Company NewsView:788

Nippon Sheet Glass Co. said Craig Naylor, its American chief executive, resigned over "fundamental disagreements" on strategy with the board of directors, becoming the second foreign CEO to abruptly step down from Japan's second-largest glass maker in three years.


The company's chairman, Katsuji Fujimoto, wouldn't elaborate on the nature of the disagreement, saying only that the board and Mr. Naylor, who had a long career at DuPont Co. DD -0.24%before being lured out of retirement to become Nippon Sheet Glass's CEO, disagreed on priorities for a restructuring plan announced in February, as well as "organizational management."


"It was his decision to resign so it was not a dismissal," Mr. Fujimoto said at a news conference. "But it is true that we were compelled to make the decision to replace (him) with someone who can act with speed in this tough environment."


Like many Japanese manufacturers, Nippon Sheet Glass has struggled to turn a profit amid weakness in key markets like Europe and a strong yen that makes products made in Japan more expensive abroad.


In the electronics sector, Sony Corp., Panasonic Corp. 6752.TO -0.62%and Sharp Corp. 6753.TO +0.20%have all unveiled new management teams in recent months to freshen up strategy as they brace for heavy losses in the fiscal year ended March.


Having expanded significantly with a multi-billion dollar acquisition in Europe six years ago, Nippon Sheet Glass now forecasts a net loss of ¥3 billion ($37.2 million) for the just-ended fiscal year, its third loss in four years, and announced plans to cut 3,500 jobs globally in February. Its share price has slumped by nearly 50% since Mr. Naylor became president and CEO on June 29, 2010.


Though Nippon Sheet Glass officials were quick to dismiss suggestions of any possible parallel with the ouster last year of Olympus Corp.'s 7733.TO -1.14%British CEO Michael Woodford, the departure of Mr. Naylor is an example of a foreigner experiencing difficulties while running a Japanese company, where the executive suite is often a close-knit community of individuals who have risen through the ranks together.


Sony's CEO Howard Stringer stepped down in April, saying the electronics maker would be able to restructure faster and better with a Japanese speaker at the helm.


While Japanese companies have turned to outsiders in an effort to become more global and enact major changes, communication barriers can derail a foreign executive's restructuring efforts. A non-Japanese CEO can also encounter resistance to changes that go against the strategy of past management, who often hold sway in hierarchical Japanese firms long after they have vacated the corner office.


Mr. Naylor will be succeeded by executive vice president Keiji Yoshikawa, a 39-year veteran at the company.


Nippon Sheet Glass said that current board member and executive officer Clemens Miller, a German national, will become chief operating officer and will "take direct responsibility for the day-to-day management" of the company's operations, along with Mr. Yoshikawa and chief financial officer Mark Lyons, who was also promoted to the position of representative director.


Mr. Naylor is the second foreign CEO to quit unexpectedly at Nippon Sheet Glass, after British national Stuart Chambers stepped down in 2009 citing "personal family reasons" after just over a year in the job.


Mr. Naylor couldn't be reached for comment. According to Mr. Fujimoto, it was Mr. Naylor's decision not to attend Wednesday's news conference.


Mr. Yoshikawa, the new chief executive, told reporters at the news conference that he was surprised when Mr. Naylor told the board in early April that he wanted to step down, coming just a day after the pair had attended a cherry blossom-viewing party together with no indication from Mr. Naylor of his intentions. Mr. Yoshikawa said the pair had often talked until late at night at his house, and went to see sumo wrestling together.


Mr. Naylor is "very even tempered," and so should have gotten along very well with Japanese colleagues, one U.S. acquaintance said. The thoughtful executive "understands governance. He contributes well to group discussions," the acquaintance added. "He's prepared to support group consensus."


Unlike some volatile Americans, Mr. Naylor "is not the kind of guy to blow his stack because you didn't do it my way."


Mr. Naylor's resignation also came two days before Olympus faces shareholders at an extraordinary meeting where the company plans to explain how the camera maker will turn itself around with new management following one of the country's biggest corporate scandals.


Olympus ousted Mr. Woodford after he questioned acquisitions made by current and former management, which would later be uncovered as part of a plan to conceal more than $1 billion in past losses.


But Nippon Sheet Glass's Mr. Fujimoto dismissed any similarities. "There is nothing in the likes of what happened at Olympus at our company," he said.


Mr. Fujimoto, who has served as CEO or chairman of the company since 2004, remains a powerful influence at Nippon Sheet Glass. As the company's president, he oversaw a major expansion including Nippon Sheet Glass' 2006 acquisition of U.K. glass maker Pilkington PLC for £2.25 billion ($3.58 billion).


At the news conference, reporters raised the notion that the rapid turnover of CEOs at Japanese companies could be taken as an indication of an overbearing chairman, and asked Mr. Fujimoto whether he had any plans to step down.


In a curt response, Mr. Fujimoto said that decision wasn't up to him. "That is a decision for the board's nomination committee," he said.


Mr. Lyons, the CFO, said Nippon Sheet Glass has no immediate plans to raise further capital, but added all options would be considered going forward.

Source: http://online.wsj.comAuthor: shangyi

Hot News