Former aircraft designer Shimada may find silver lining in Toshiba gloom

The crisis at Toshiba Corp may have a silver lining for new boss Taro Shimada, allowing him to keep - at least for now - businesses pivotal to his digital strategy that predecessors had planned to sell.

Investors last week voted down management s plan to spin off Toshiba s devices unit with nearly 60% opposition, as well as a rival shareholder proposal to solicit buyout offers. That left the troubled 146-year-old conglomerate without a clear immediate direction.

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But it could give Shimada, a former aircraft designer and Siemens AG executive, leeway for his plan to boost subscription revenue by tying software to hardware.

It also allows him to hang onto equipment maker Toshiba Tec Corp, which was considered "non core" in the now-rejected spin-off. Shimada has praised some businesses at Toshiba Tec for marrying digital to hardware and sources say he didn t want to sell it.

It s unclear if Shimada will be able to appease the hedge funds that own around 30% of Toshiba and are impatient for a private equity buyout. But as Thursday s vote shows, they don t have enough support to completely call the shots.

The outcome of the vote gives Shimada "carte blanche" to show he can deliver, said veteran Japan analyst Jesper Koll of Monex Group.

"For the first time in over a decade, you ve got a CEO at Toshiba who actually is a technologist, who understands technology, who has hands-on experience," he said.

Big manufacturers are increasingly pushing into higher-margin digital services. Shimada s former employer, Siemens, wants to expand its customer base through digital services that improve factories, buildings and train systems.

Shimada says he s the first Toshiba head to understand digital. He was brought in as chief strategy officer for digital in 2018 by then CEO Nobuaki Kurumatani, also a company outsider, who wooed him over ramen noodles in Tokyo s Shimbashi district.

Kurumatani stepped down last year amid a governance scandal and shareholder opposition. Toshiba later said the former boss violated ethical standards. Shimada became the third CEO in about a year when he took over this month from Satoshi Tsunakawa, who remains board chairman.

source https://www.suchtv.pk/technology/item/112201-former-aircraft-designer-shimada-may-find-silver-lining-in-toshiba-gloom.html