U.S. Is Losing Industrial Base--Sony Chief

Sounding more like a Democrat in Congress than a leading Japanese businessman, Sony Chairman Akio Morita warned that the United States must erase its huge budget deficit and reverse the erosion of its industrial base.

But while the congressman would blame Japan for this country’s industrial deterioration, Morita placed the principal blame on the strong dollar. And he chides U.S. industrialists for buying so many Japanese components.

“The American people fail to understand their problems,” Morita said. “You are losing your industrial base, while you are berating Japan. American industry is itself shifting production offshore and buying Japanese products. We are confused.”

Morita, a co-founder of the $5-billion electronic equipment firm, figures that an industrially healthy United States is critical to a free-market society and he said that its current manufacturing weakness is “a sad thing . . . we like to have a good competitor.”

Morita made the comments in a Los Angeles interview during a tour of Sony’s U.S. installations. The company’s biggest U.S. facility is a San Diego television plant that employs 1,600.

Morita said the biggest reason for the record trade deficit between the two nations is the skewed currency exchange rate that makes Japanese products so cheap here and U.S. products so costly in Japan. And he pointed out that the deficit is only worsened by the flight of U.S. manufacturing plants to low-cost nations and the increasing use in “American” products of components from Japan, Korea and other countries.

Although the U.S. semiconductor, auto and other industries explain such practices as essential to compete with low-cost imports from those nations, Morita said the U.S. firms should instead commit to the newest manufacturing technologies on their own turf--something he said that has already started to happen.

He said that Sony’s videotape plant in Alabama uses a plastic material from a Japanese company. Although the plastic product was invented by an American company, he said, the Yankee firm couldn’t seem to manufacture it well enough for use in videotape.

“You have a basic invention by Americans, but the production technology is in Japan. So the Americans are buying Japanese products. Such a thing should be made by Americans. The inventor must get the benefit. It’s a sad thing.”