Toshiba Puts Cost of U.S. Sanctions at $320 Million

Toshiba Corp., in an announcement Wednesday of its business performance for the past year, said U.S. trade sanctions against the giant electronics company sliced its exports to the United States by $320 million.

Osamu Iyemura, senior vice president of the Tokyo-based company, said, however, that overall sales and net profit recorded a marked increase in the fiscal year that ended March 31 over the previous year.

The decline in U.S.-bound exports that Toshiba blamed on trade sanctions represented less than 20% of its total sales in the American market in the past fiscal year.

Iyemura said exports to the United States were $1.76 billion, a 12% drop from the year-ago period. The amount fell short of the company’s projected U.S.-bound exports of $2.08 billion.

Japan’s No. 2 electronics company sells products in the United States ranging from household appliances such as videocassette recorders and other audio-visual equipment to office machinery and heavy industrial equipment.

Banned on Post Exchanges

“We attribute the export decline to U.S. sanctions over a semiconductor trade dispute and the Toshiba affair,” he said.

Illegal sales of sophisticated milling machines to the Soviet Union by the firm’s subsidiary, Toshiba Machine Co., were suspected of making Soviet submarines more difficult to detect by sonar and angered the United States.

The Toshiba case cost the company an estimated $240 million in sales to the United States, Iyemura said.

The Pentagon banned Toshiba products from military post exchanges worldwide in January. That decision alone cost an estimated $40 million to $50 million. In addition, company officials said furor over the case led to the postponement or cancellation of Toshiba’s contracts with American companies.

Toshiba Machine also reported a loss of $3.2 million during the same period--its first deficit in 11 years--compared to the posted profit of $15.2 million a year ago.

Foreign Exchange Loss

Exports fell 13.6% as a result of Japanese government sanctions, which banned Toshiba Machine’s exports to the Communist bloc for one year beginning May 21, 1987, as a result of its illegal sales. Sales to communist nations plummeted to $5.6 million from $39.2 million in fiscal year 1986.

Also during the past fiscal year, the Reagan Administration slapped retaliatory tariffs on personal computer imports from Japan in a dispute over semiconductor trade. Iyemura said the tariff cost the company about $80 million in sales of computer chips to the United States.

Toshiba’s business results showed that strong domestic sales boosted the electronic firm’s overall sales by 8% over the previous year to $28.58 billion, producing a net income of $486 million, a whopping 78% increase.

Total exports reached $8.85 billion, accounting for 31% of overall sales, unchanged from the preceding year.

Iyemura said the company overcame an estimated $480-million loss in foreign exchange caused by the appreciation of the Japanese yen against other currencies with cost-reduction and other efforts.