American firm hopes it's 'just the beginning'; Japan's 'Ma Bell' buys US beepers
Fort Lauderdale, Fla.
Will the Japanese go ''beep'' in the night? At least one United States company, Motorola Inc., hopes so.
Motorola, after four years of trying, has finally landed a contract to sell Nippon Telegraph & Telephone Public Corporation (NTT) what the Japanese call ''pocket bells'' and Americans call electronic beepers or pagers. Motorola will start to ship the pagers later this month from its manufacturing facility here.
Although the contract to supply 45,000 pagers is worth only $9 million, Motorola and many outside observers think it could amount to more than just a little beep.
Notes Al Rosenblatt, managing editor of Electronics Magazine, ''Selling to NTT is like selling to Ma Bell -- it opens up big possibilities.'' And Stephen L. Levy, Motorola's senior vice-president who engineered the transaction, says the sale of the pagers is considered a ''first step'' toward breaking into the Japanese telecommunications market, one of the largest in the world.
''We would hope this is the beginning of a long-term relationship,'' said Mr. Levy in a phone interview.
The Motorola sale is also considered important because it is the largest transaction involving NTT and a US electronics company. According to the Department of Commerce, NTT purchases about $3.3 billion worth of goods each year. However, until January of last year US firms were not allowed by the Japanese to bid on any of NTT's procurements.
Since then, says one Commerce Department official, many companies have shown an interest, although only five others have gotten as far as Motorola. Last summer some 40 to 50 companies went to a seminar, hosted by the Commerce Department in Japan, on bidding for NTT contracts. Some 60 to 70 firms have now applied to NTT to ''qualify'' for competitive bidding.
''The level of interest is high,'' says a Commerce Department official.
In get so far as a sale, however, companies must display a lot of what the Japanese call ''gaman,'' or what Americans call ''patience.'' This was the case with Motorola.
The firm actually began working on landing its NTT contract in 1978, when it established a multi-million dollar strategic budget. During this period the company leaned on the US government to try to initiate discussions to open up telecommunications sales in Japan.
At this time Motorola's Washington lobbyist was Lionel H. Olmer. In February 1981 Mr.Olmer became under secretary for international trade in the Department of Commerce, where he has even more to do with US-Japanese trade relations. Mr. Olmer declined to be interviewed on his role in helping Motorola crack the Japanese market. However, Motorola says that throughout 1980, while bilateral negotiations were going on, ''The US government relied on Motorola during the talks as its example to prove to the Japanese that US companies can perform as well as any Japanese concern on price and quality.''
In late 1978 Motorola officials met in Japan with NTT's technical staff, preparing for design work and translating technical documents not available in English. According to a Department of Commerce official, this translation process can be long and costly. NTT only sends out information in Japanese. This must be translated, and all replies must be in Japanese as well -- sometimes within a month. Technical specifications often are as thick as five-inch books.
Communications, admits Mr. Levy, were a major problem. For example, there were misunderstandings about what was required of Motorola. Initially, Motorola says, its engineers were frustrated by NTT's insistence on high levels of quality and performance, even though written specifications typical of US supplier-customer relations were lacking. For example, NTT had specific objectives for performance and reliability, but it did not have specifications for each circuit and component. At one point, pagers sent to Japan for testing were given tests for which Motorola had not prepared them. Mr. Levy says Motorola also found that the Japanese placed ''a higher premium'' on appearances -- that is, how the pagers looked. ''This required some getting used to,'' he says.
With all the stress on quality for the Japanese pagers, Motorola decided to establish a separate assembly line at its plant here, which has done all the design work and will do 85 percent of the assembly. Final assembly and testing will be done in Japan. ''Workers were told to pay attention to detail,'' says Mr. Levy, ''and told to make sure they did things correctly the first time.''
Managers were encouraged by Motorola's incentive program, which rewards executives who reach certain quality goals. One source at the plant says the company gave the project a high priority, cutting its own red tape.
Motorola wasn't the only party learning from the project. According to one source, NTT wasn't accustomed to competitive bidding. When some of the Japanese trading companies were asked if they would like to take part in joint ventures with US companies in supplying equipment to NTT, they replied, ''We didn't know NTT took competitive bids.'' They are now interested in such joint ventures. NTT had no comment.
Motorola's long-term commitment to cracking the Japanese market has required substantial time and money. Motorola had to convince the Japanese that the company could deliver on time the right product at the right price to NTT's demanding specifications. Motorola officials felt they had to enter the Japanese market -- the second-largest market for pagers in the world. Besides, the Japanese have now started to challenge Motorola in the business in this country. So part of its strategy is to try to beat its main competition, Nippon Electric Company and Matsushita Electric Industries in their own backyard first.