Nikon announces major shakeup & reorganization; Kimura out as President

Ade

After a tough fiscal year which saw Nikon's valuation cut in half, Nikon today announced the most sweeping corporate reorganization in 15 years.

- Nikon President Makoto Kimura will be replaced by Kazuo Ushida effective June 27. Kimura will remain as board chairman.

- Nikon will abandon its de-centralized "group of companies" structure adopted in 1999. Under the new structure, the various group companies will be absorbed into a single corporation, with divisional heads reporting directly to the new chief Ushida.

- Nikon will continue to diversify its business with the establishment of a Medical Business Development Division.

- In another sign of diversification, incoming President Kazuo Ushida does not come from the Imaging Company. He is currently President of Precision Equipment Company. He was appointed Head of Development of the Precision Equipment Company in 2003 and has climbed the executive ranks since then.

http://www.nikon.com/news/2014/0516_03.htm

http://www.nikon.com/news/2014/0516_02.htm

Beso

Nice of you to post this @Ade. I know we all have a vested interest in Nikon's well being.

paulr

New horizons for Nikon, Mr Kazuo Ushida is not from a photographic background, so maybe a total shakeup in of the Photographic division of Nikon. Profit for share holder will take priority, rather than prestige at all costs.
Lets hope that improvement rather than cutback filters through to the photographic division.

donaldejose

Nikon is in a declining market. They have to adapt to that fact and start producing cameras for cellphones as their lower line of cameras. Compact cameras will continue to decline unless they can offer image quality clearly superior to cell phones. To me this means the CX chip in compact cameras. The DX chip should be the sales leader but Nikon has to produce some top quality yet not "professional cost" DX glass to match the potential of the chip. FX will continue to expand with 24mp being the norm when the D5 arrives and a 50mp FX sensor will soon be here (in 2015 if not this year, I think). Then Nikon has to produce some sharper FX lenses to top the DxOMark charts. You don't want to see Sigma being the best 35 or 50mm lens you can use with your D800e at half the cost of Nikon's lens. Nikon needs to fight back against the Sigma Art lenses. Nikon should also try to take market share away from Canon. In a shrinking market you take market share away from others. How to do this? Nikon already has superior Image Quality sensors. Perhaps adding a line of superior extremely sharp lenses designed for high mp sensors will help.

We all wish Nikon the best and we all will benefit from the improved products they market (if that is the way they choose to increase profits).

NSXTypeR

If Nikon is hurting that means all the other camera makers are hurting too- I think the camera market is just Nikon and Canon and then everyone else.

PB_PM

Indeed, all camera manufactures are facing losses from the last year, so it is not unique to Nikon. Canon, Ricoh/Pentax, Sony, Samsung and Panasonic are big electronics companies, with imaging divisions that make up part, in some cases a small part, of the company. Unlike those other camera makers Nikon depends a lot more on the imaging division to stay afloat.

It's good to hear that Nikon will bring more focus to other areas, but I also hope that Nikon does not downplay the imaging division to the point that the users are forced to abandon the brand.

TaoTeJared

Everyone just got shuffled around and most if not all the directors of the board are internal - that is not a sign of change but a sign of digging in. Playing musical chairs between all the top executives (especially in Japanese companies) is not a sweeping change but a group of people who are trying not to change and want to remain in controol. It just illustrates the joke of where the true decisions come from, and titles mean little. Until they bring in a majority of people onto the board from outside the company and let go the top executives I highly doubt anything will really change, which is not a good sign. A big shake-up would letting go the top - if they all remain then nothing has really changed.

If Nikon is hurting that means all the other camera makers are hurting too- I think the camera market is just Nikon and Canon and then everyone else.

You need to add Sony to that now - they have taken market share from everyone and are growing quickly. They have also said they want to be #1 and are doing everything to accomplish that (and have the money to do so.) Canon is so insulated by it's size and diversity it is difficult to know with them but they have also said compact sales have significantly dropped. Pentax we know was broke and picked up by Ricoh. Olympus has had it's accounting regulatory issues which is a bit difficult to re-align how it's doing, but it has grabbed a significant market in what use to be the lower end DSLR market. Panasonic is about at it's wits end with it's camera division and the company has said if it is not making money soon it is gone. Leica is booming in-comparison to historical sales and Zeiss is making a hell of a run for it so there still is a good boutique market out there.

The camera market has really changed in the sense that there are many more choices grabbing the 800-2000 market (for full set-up of lenses and bodies) which also shows where camera buyers are moving to. Really Nikon and Canon have failed miserably in innovation in this segment and have just "stuck to their guns" and continue to pump out the same stuff.

Hval

TaoTeJared,

I agree with much of what you have written. Having said that I have a few comments:-

Perhaps the change in Directors will work as those now in command may have been wanting to make effective change but had not been allowed to.

I tend to agree that neither Canon nor Nikon have made revolutionary changes but have made evolutionary changes. I do think though that evolutionary change is not necessarily a bad thing. I have a feeling, and it is only a feeling, that Nikon appear to be unsure as to where to go in the future?

A final thought of mine is about the large price rises in new products. Are these price rises a reflection in actual manufacturing and shipping costs, an attempt to maximise profits from an understanding that less and less product is being sold, or just general greed?

I really, really wish that camera body manufacturers could take lessons from Leica/ Apple on how they develop their user interfaces. To me, improve these and there would be more of use. I must be a prime example. I gave up on my Panasonic GH-1and 2 due to the poor menu and button interface. Mind you, the comparatively poor low light capabilities for photography didn't help either. I tend to use my D800 in the same way I used my Canon T90. I ignore much of the functionality of the menu systems - purely because I don't have time (work can be about 65 to 80 hours a week), nor a desire, to learn them. This is why I find the Leica T so attractive - a really simple interface that let's me do so much.

Ade

Now that Kimura is out as Nikon's top boss (pending June 27 transition), what's next for Nikon?

During his tenure Mr. Kimura championed several initiatives:

- Nikon 1 and the CX format. Nikon 1 has been one of Kimura's projects since even before he took over the presidency. For various reasons, the Nikon 1 has not been a financial success. Will Ushida sideline Nikon 1 in favor of new low-end DSLRs (e.g., the rumored D2300)? Is the underwater/rugged niche (think AW1) the future of the entire Nikon 1 line?

- Nikon Df. Launched with a marketing frenzy, and Kimura personally showcased the Df to the financial press. Widely panned, the Df was selling at a discount barely a month after its introduction. Will Ushida approve a Df successor? Or is "Pure Photography" now a dead concept?

- The mysterious "non-camera consumer product". Kimura hinted that Nikon is pursuing future products to "change the concept of cameras". Will Ushida accelerate introduction of non-camera products? Many speculate Nikon will introduce a mobile phone, while Kimura has acknowledged experiments with heads-up displays (think Google Glass).

- Kimura has been slow to pursue other business opportunities (namely in the health / biosciences fields), which may be a factor leading to his ouster. With the re-org under Ushida this will surely be one of Nikon's top priorities for the next several years.

Other shuffles:

- Imaging Company boss Yasuyuki Okamoto, while remaining President of the division, will relinquish day-to-day operations and P&L responsibility to Nobuyoshi Gokyu, the newly-appointed division GM. Mr. Gokyu is currently President & CEO of Nikon USA. Toru Iwaoka, head of marketing, will now head to New York as the new chief of Nikon Inc.

TaoTeJared

Without knowing the group dynamics of the executives and reading it on it's surface, three things seem apparent - Medical Business will get a large focus, maybe a whole new marketing effort, and probably the divestiture of some holdings (office buildings, etc.)

Nobuyoshi Gokyu who was the CEO is now the Sr. VP (down one step.) He has always overseen the Imaging Division (camera) and that would indicate zero change for the camera business and they think it is doing well.

Japan is a tricky place to know where breakdowns are in a company. The "Save face" embedded in the culture is so strong that it is very difficult to see if it is the executives who are failing or the down-stream workers who are pushing back against change. In most of the world you will see dismissed personnel but in Japan they tend to keep them but knock them down a step and shuffle them to the side and let a lower "ranked" manager take over. When that happens, you don't see that till well after it has happened (usually a couple of years.)

NSXTypeR

If Nikon is hurting that means all the other camera makers are hurting too- I think the camera market is just Nikon and Canon and then everyone else.

You need to add Sony to that now - they have taken market share from everyone and are growing quickly. They have also said they want to be #1 and are doing everything to accomplish that (and have the money to do so.) Canon is so insulated by it's size and diversity it is difficult to know with them but they have also said compact sales have significantly dropped. Pentax we know was broke and picked up by Ricoh. Olympus has had it's accounting regulatory issues which is a bit difficult to re-align how it's doing, but it has grabbed a significant market in what use to be the lower end DSLR market. Panasonic is about at it's wits end with it's camera division and the company has said if it is not making money soon it is gone. Leica is booming in-comparison to historical sales and Zeiss is making a hell of a run for it so there still is a good boutique market out there.

I forgot about Sony. Their products are really interesting and they really need to be commended- there's more variety in Sony's camera division than anywhere else in the field. Plus their high end compacts are in my opinion still the best.

But it doesn't help when their lineup is confusing. They have 2 maybe 3 adaptors for their mirrorless full frame camera to put their legacy DSLR lenses on and I have read up on it but still don't quite understand it.

Ade

Nobuyoshi Gokyu who was the CEO is now the Sr. VP (down one step.) He has always overseen the Imaging Division (camera) and that would indicate zero change for the camera business and they think it is doing well.

This part is not correct. See my post above.

Nobuyoshi Gokyu is currently CEO of Nikon USA (aka Nikon Inc), not Nikon Japan. His current rank is Corporate VP. He does not currently oversee the Imaging Company.

Mr. Gokyu is being promoted to GM of the new Imaging Division, Japan. With that he gains control and P&L responsibility of the entire Imaging Division world-wide. He will move back to Japan and his rank will move up from Corporate VP to Senior VP. In fact he will be equal in rank to Yasuyuki Okamoto, who as the President of the Imaging Division will retain the rank of Senior VP.

TaoTeJared

Here is the info from your link to Nikon's website.
http://www.nikon.com/news/2014/0516_02.htm

Nobuyoshi Gokyu
Senior Vice President (as of June 27, 2014)
[New]
General Manager of Imaging Business Unit
[Current]
President & CEO of Nikon Inc.

It is not a promotion to go from President & CEO to a Senior Vice President.

Msmoto

Maybe this all means we will see a full fame mirrorless from Nikon? What we do not know is whether the shuffle is a political internal move or if it really means the direction is going to be shifting. I would think Nikon has many projects which are in final stages but require executive decisions to be released.

And, the press releases provided by Nikon may be more of a whitewash than anything based upon truth. Historically, my experience has been along the lines of Nikon answering my questions with some sort of canned response rather than answering my question. And, my previous profession suggests to me that when I hear answers to questions I have not asked, I am dealing with an Ostrich.

Ade

Here is the info from your link to Nikon's website.
http://www.nikon.com/news/2014/0516_02.htm

Nobuyoshi Gokyu
Senior Vice President (as of June 27, 2014)
[New]
General Manager of Imaging Business Unit
[Current]
President & CEO of Nikon Inc.

It is not a promotion to go from President & CEO to a Senior Vice President.

@TaoTeJared

Unfortunately your interpretation of the above is 100% wrong. Please read carefully as I've already posted the correct info twice.

Nobuyoshi Gokyu is currently President and CEO of Nikon USA, also known as Nikon Inc. Nikon USA is a regional office.

Just to be clear, he is not President or CEO of Nikon Corp. (Japan). He currently lives in New York, not in Tokyo.

As the functional "President & CEO" of the US regional office, Mr. Gokyu "only" holds a company-wide rank of Corporate Vice President.

Now, Mr. Gokyu is being promoted. He is moving back to Japan to be the new GM of the Imaging Division. As GM he will have day-to-day control over the entire Imaging Division, world-wide.

So Mr. Gokyu moves up from being head of the US to being head of the entire Imaging Division. And hence he is receiving a rank promotion, from Corporate Vice President to Senior Vice President.

snakebunk

I think Nikon needs to focus more on fewer concepts/products. For example I think they should either do all or no cameras in a retro style. Or either all or no Nikon 1 cameras and lenses should be water proof.

It may be a good time right now to switch all cameras to mirrorless and be different from Canon, and reduce the number of camera models.

But I really don't know anything about the photography business.

Ade

I agree that they should focus on fewer products.

But I'm afraid Nikon's tendency is to add even more products to fill every conceivable price point. I mean, we currently have nine different versions of the Nikon 1 still available for sale in the US. Really, Nikon??? Does the market really need a J1, J2, J3 and a J4 all at the same time?

(Screenshot, Nikon USA website)

Someone at Nikon thinks the above is perfectly ok...

tc88

I’m not familiar with accountings, but I’m afraid some of these are necessary to prop up the profit numbers. It’s my guess, but to prop up the paper profits, they may have to keep on building the cameras even if they have to be kept as inventory. If the older models are declared discontinued, they may have to be treated differently in accounting which in turn could turn ugly quickly.

Also promoting the Nikon USA’s head to higher position could very well mean business as usual since Nikon USA is at the center of all those reports of bad customer services.

Ade

Being head of Nikon USA means Mr. Gokyu is intimately familiar with the North American market (Nikon's largest single market) and he also has responsibility over Central & South America.

But prior to his role at Nikon USA, Mr. Gokyu was also instrumental in establishing Nikon's presence in China, one of Nikon's strategic future markets, where they've had some trouble lately. In fact Gokyu was Nikon China's first Managing Director and he helped grow the Chinese market for nearly 5 years.

And prior to that, he was Managing Director for the entire Asia-Pacific region.

So given Mr. Gokyu's in-depth familiarity with several of Nikon's most important markets, it makes sense for him to get the nod as the new GM of the Imaging Division.

But @tc88 I'd have to agree that there have been many issues with Nikon USA in the past few years, though the handling of some of those issues -- such as the D600 & D800 defects -- were probably being closely dictated from Japan and not necessarily Mr. Gokyu's own doing.

In a way Mr. Gokyu is lucky that he was leading the US office -- and not part of the Imaging Company in Japan -- when these quality problems occurred. He's able to escape much of the blame and get the big promotion.

MikeGunter

Hi all,

Nikon is far more than the US, so keeping that in mind...

While the Nikon 1 might be a winner elsewhere, I don't see it as much of anything Nikon can hang their hat on; it looks like a turd to me.

I've panned the Df as $1700 worth of crippled D6xx camera crammed into a metal $2800 body. It's a crowned head that Nikon pushed with clever marketing that some smart kid with clear eyes will someday call out as a naked king prancing around the street.

There are other choices in the market. Sony is making great strides. So is Fuji.

My best,

Mike

manhattanboy

Thom has a pretty good article on this here:
http://www.dslrbodies.com/newsviews/nikon-management-changeunch.html

Although I thought his write-up on the camera market in general was better and more relevant to the thread discussion about what should Nikon do next:
http://www.dslrbodies.com/newsviews/whats-the-plan.html

The M&A division is interesting. Is Nikon going to go on a buying spree?

Ade

Interesting analysis and agreed on the second article.

One point in the first article I'd disagree a bit with is that at Nikon (vs. at Canon), the Chairman of the Board role is pretty much a figurehead. In fact the old Chairman of the Board (Kimura's predecessor) retired a couple of years ago after only a short time on the position, and no one noticed -- that role was left empty. My guess is that Kimura will also retire within a couple of years.

Also I don't think Thom noticed that (as we've been discussing above) it is Gokyu who will become GM of the new Imaging Division, which addresses the 2nd half of his article.

On the M&A division, yes it looks like Nikon is going to go on a buying spree. But likely they will focus on buying health & biosciences companies, and smaller firms with relevant intellectual properties. It will be interesting if we get a surprise acquisition!

TriShooter

The major message for me is that Nikon is centralizing which means they want more control of their management in the near term. This is a smart move on their part because what they have been doing is not working well for them. They have lost what made Nikon special which was quality, customer focus, and not spending an inordinate amount of time disabling features in their cameras to protect their higher priced cameras. Some people like to own the best, and will pay for it even if the advantage is not breathtaking.

Centralizing is a step toward re-focusing the company on its core markets, and finding new growth opportunities. Wedding photographers flinch when I fire off a few rounds at a wedding in a church with good acoustics. LOL. If Nikon wants to grab a piece of that market they will have to make a camera for it. Wedding photographers do not need the fast tracking on a D4 very often. Making what customers want is what drives sales into any market. If manufacturers will sell people what they want, instead of what they think people need, they will make money in any kind of market, and be the last man standing. BUT:

Shunning high growth markets like the newspapers did with the internet, especially after seeing the high body count, is akin to committing suicide. Newspapers, and the paper companies who sold them paper where told by their own management as far back as 1982 that electronic distribution of news was the future. This was before the internet was open to the public when users were using 300/ 1200 baud modems People right now want cell phones, and tablets with good cameras and they are going to buy them whether Nikon cares to make them, or not.

People who want the best available will be buying FX, and DX cameras until the other alternatives are better.

sevencrossing

Nikon seem to have make some big decisions
Do they bring out another mirror less system with a lager sensor than the Nikon 1
If so DX? FX ? or something completely new and do they keep the F mount
and most critical of all, when

madm002

I was talking with some Nikon managers about this (Japanese Guys).

It had been planned to Gokyu-san to make this move several years ago. If he had not achieved that position he would have essentially retired.

However I disagree he can escape all the Nikon 1 issue, it was pushed VERY heavily here in the Americas and failed. But he is a sharp, tough guy and I see this as a good thing.

Iwaoka coming over was a surprise. That was not who was supposed to get that position. To me it means there will be more central control imposed on the Americas units from Japan. They are really tightening up their planning and forecasting processes, for reasons that have already been discussed by Thom Hogan.

Ade

@madm002

Agreed that Mr. Gokyu was being groomed for a higher position. Although, he wasn't the only one, and the GM position he will take is essentially a new one.

Also I think Mr. Kimura was planning to stay on as group President for much longer. So the shuffle now was unexpected.

Lastly, I think Gokyu benefitted that others in Japan got (more?) blame for recent troubles, opening the position for him. Specifically I'm thinking of Mr. Kosaka, GM of Production and Gokyu's senior, who will now retire.