A Knight For Sony; Howard Stringer on his plans for rescuing the electronics flagship of the Japanese economy.(Interview)

Howard Stringer was about to embark on a round of Oscar weekend party-going when he got the call from Japan: Sony's chairman and CEO Nobuyuki Idei was stepping down and vice chairman Stringer, who is based in New York, was the pick as his successor. After checking with his wife, who lives with his two children in England, Stringer accepted. The 63-year-old Welsh-born former head of CBS News (who was knighted in 2000) is now the first gaijin to head the electronics flagship of the Japanese economy, which has seen its stock price and market share drop in recent years. Stringer plans to run the company from New York, not Tokyo, with frequent trips in between. He faces the challenge of directing a firm with assets in film and music, a mighty game division and a woefully underperforming electronics division. Just hours after Stringer returned from Japan, where he formally announced his new role, he spoke with NEWSWEEK's Steven Levy about his plans to restore the luster to one of the world's greatest brands.

NEWSWEEK: Why did Mr. Idei choose you as the first foreigner to lead Sony?

Stringer: I think he liked the way I did it here in the United States. We did a lot of tough things. We laid off 9,000 people, did successful integration at Sony BMG [music] and did a lot of breaking down walls at Sony Electronics in this country. I think he thought that, in the end, there was an advantage to being an outsider. Sony is built up on a web of interpersonal relationships that go back to the dawn of history. The old boys never go away. But that also makes it very difficult for the insider who has to attack the problems of too much management, and turning that around.

How will you use that outsider status?

You have to do what's right; you can end up killing a company with kindness. There is a sense inside the company that some of the pride has been singed with concern about the direction of the company, and it's a very proud company. In a meeting I went to a few weeks before, I said, "The business of Sony has become management, not making products." Engineers are stars, like actors in Hollywood. Point them in the right direction, and let them go. But when push comes to shove, if we reach the conclusion that the only way to solve this problem is to do something tough, I'm happy to be the idiot foreigner, and I'm going to take charge of it.

Does that mean layoffs?

I'm not trying to scare an ...