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B-205135 1 (1983-03-23)

handle is hein.gao/gaobabjam0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED STATES ! ))WASHINGTON D.C. 2054 ~RELEASED B-205o135 MAR 1983 088095 The Honorable Sam Gibbons -- .. Chairman, Subcommittee on Trade Committee on Ways and Means House of Representatives Dear Mr. Chairman: You requested that we compare several Japanese and American firms to determine what, if any, differences exist in their ap- proaches to achieving high productivity and product quality. This effort was also to respond to Section 203 of H. R. 4346, which if enacted, would require a General Accounting Office study of trends in Japanese productivity in selected basic and high technology com- panies. We chose the semiconductor industry for study, but after several months of negotiating to gain the support and cooperation of American semiconductor firms, we have not been successful. This outcome is regrettable in view of your ongoing dialogue with this industry, as well as your deliberations on trade policy, particularly with Japan. And of paramount importance is the need to base policy options on objective analyses of company-level in- formation. We had planned to compare five Japanese and five American- owned companies in the United States in the same industry or with the same product lines. We had hoped to determine whether signifi- cant differences exist in (1) corporate structure, (2) capital availability and cost, and (3) production processes. While consid- erable study has been done in the first two categories, we wanted to determine to what extent any differences disclosed were within management's control and discretion to change. We intended, how- ever, to primarily emphasize how manufacturing process design and operations compare. (Our study guidelines are contained in enclo- sure I.) Concentrating on production processes would be valuable, because very little detailed information is available on actual production operations, and because production efficiency and product quality are the true test of management's competence. Moreover, comparative efficiency and product quality achieved at the company level were the crux of your request. We selected the semiconductor industry for study because (1) this technology is at the core of the microelectronics revolution, (2) technological leadership in this industry is considered vital to our national security, (3) Japanese semiconductor competition

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