U.S. Electronics Industry Asks for Help
The chairman of the American Electronics Assn., declaring that the ability of U.S. electronics firms to compete globally is “at risk,” on Friday called on the American government to help “provide an environment that permits U.S. industry to be more competitive.”
“Together, government and industry must make a commitment that the United States will be the world leader in developing and utilizing new technologies,” Gary L. Tooker, also president of Motorola, told a lunch sponsored by the American Electronics Assn.
The 3,500-member association, which includes many small companies, has traditionally shunned involvement with government. But government support, at home and abroad, has become key, Tooker said.
An eroding share of the global electronics market--to 49% in 1989 from 64% in 1985--has cost U.S. industry the loss of more than $110 billion in annual sales, with the Japanese the main beneficiaries, he said. Each 1% of the global market is worth $7.5 billion, he noted.
U.S. red ink in bilateral electronics trade with Japan also continues to hover around $20 billion a year, he said, noting: “All the forecasts suggest it will get worse.
“While we continue to make only limited progress in penetrating the Japanese market, Japanese firms aggressively seek to dominate markets in the other parts of the world, including our own,” he said. “This is no longer an acceptable situation.”
But Tooker acknowledged that the U.S. industry faces problems of its own: “Until recently, technology companies, in general, have shunned any involvement with government. . . . However, our ability to compete in the new global marketplace is at risk. We need the reach and power of the government” to help preserve a “world-class (American) infrastructure that incorporates and supports new technologies.”
“Long-term research and development must be fostered,” he continued. “Increased savings must be encouraged. Finally, government must create a financial environment that ensures that resources are available to make the necessary investments.
“Industry, government, and the financial industry must lengthen their horizons,” he added. “Short-term mentality is inhibiting our competitiveness in a variety of critical areas, such as capital formation, research and development, and productivity enhancement.”
Tooker warned U.S. firms that they must reduce the time needed to commercialize new technologies.
He disclosed that officials of the American Electronics Assn. and the Japan Industrial Electronics Assn., in a meeting Thursday, had agreed, for the first time, to establish a working group to tackle “sourcing problems” in the United States. But he refused to give details.
He said he hoped the agreement would speed up the pace of opening the Japanese market, which he said was growing faster than the global market as a whole.
But he complained that results so far have been “slow and tedious.”
Asked about negotiations under way on extending a U.S.-Japan agreement on semiconductor trade, Tooker refused to comment beyond saying a goal for American chip sales in Japan would be necessary to stimulate action providing greater access.
Japan has been reported resisting American demands that a target of 20% of the Japanese semiconductor market be established for American chip sales here. The current agreement expires July 31.
