US Auto Partsmakers Seek Entry

TRYING to make inroads into the Japanese market has been a lesson in frustration for Jim Cote. The vice president of marketing and sales for Teves America, a subsidiary of ITT Automotive Inc., Mr. Cote supplies auto manufacturers with some of the world's most advanced anti-skid brake systems. His clients include Ford, Cadillac, Saab, and Jaguar.

But Teves has been locked out of Japan. Every time one door seems to open, Cote says in frustration, the company is blocked by yet another.

``In all the discussions we've had with the Japanese here in North America,'' Cote says, ``the common reply to us after a technical presentation has been that they have to go back to Japan, because that's where all the decisions have to be made.''

Inevitably, Cote says, except for one small licensing agreement, no orders come back, even though Teves' anti-skid brakes business has been growing at a near-exponential rate in the United States and Europe.

Still, Cote is optimistic, especially in light of a three-day meeting in Las Vegas beginning today of representatives from 50 US component suppliers and from all the Japanese auto manufacturers.

``The value of this meeting is that you will get together all the right people who can make the decisions,'' Cote says. ``It might be a breakthrough.''

That's exactly what US makers of auto parts need.

According to the US Commerce Department, this country exported just $554.9 million worth of automotive parts and materials to Japan last year.

The Japanese insist the Commerce Department underestimates US auto exports. The problem, they claim is that the standard coding used by the US government doesn't include some of the textiles, glass, electronics and other materials used on Japanese auto assembly lines.

According to the Japan Automobile Manufacturers Association (JAMA), the true value is closer to $1 billion.

Even then, however, when compared with the $10.6 billion worth of automobile components Commerce says we imported from Japan last year, the figure is still ``relatively minimal,'' says William Raftery, president of the Motor & Equipment Manufacturers Association (MEMA), which represents US parts suppliers.

The imbalance has been enough to shake even some of the stiffest supply-siders in Congress. There is growing support for applying the sanctions found in the so-called ``Super 301'' trade bill.

But, surprisingly, Mr. Raftery has been asking federal lawmakers not to act - yet.

``I believe it's essential we keep the pressure on the Japanese,'' Raftery emphasizes, ``but I personally believe at this particular point in time ... trade is about to break open and [sanctions] would be a counterproductive measure which could backfire.''

The test will come at the Las Vegas meeting. Unlike previous conferences, the MEMA-sponsored event will emphasize one-on-one meetings between US parts company representatives and the Asian decisionmakers. So it will be immediately clear if Japan's automakers are really intent on opening their doors.

``The intention [is] to come out with a feeling of solid business development,'' promises Bill Duncan, deputy general director of JAMA, which is co-sponsoring the meeting.

Just how much new business will Las Vegas generate?

Eventually, says Raftery, ``billions.''

But Jim Hodges, a vice president at the Gates Rubber Co., cautions ``You have to get in small ... and prove your credibility as a source. It's a long-term process.''

While US suppliers complain that the Japanese have created structural barriers to imports, many also concede there have been practical reasons for the Japanese to be wary of US-made components.

Until recently, acknowledges Borg-Warner sales manager Greg Griffin, concerning quality, ``We slouched off, while they pushed for constant improvement.''

But today, most experts insist, US partsmakers have come to embrace the Japanese penchant for quality; they've incorporated statistical processing controls and can deliver parts on a just-in-time basis. And in more than a few cases, such as with anti-skid brakes, US suppliers actually hold the technological edge.