The Nightly Business Report; To Be the Best

<v Narrator>Are American companies losing the race to be the best in the international marketplace? <v Narrator>A special report on quality in American business, coming up on the Nightly Business <v Narrator>Report. <v NBR Speaker>The Nightly Business Report produced in association with Reuters, <v NBR Speaker>the world's largest electronic publisher, <v NBR Speaker>made possible by Digital Equipment Corporation, offering customers <v NBR Speaker>the power of BMS software and the open environment of Unix based <v NBR Speaker>systems. <v NBR Speaker>Kidder, Peabody, one of the world's major investment firms and G.E. <v NBR Speaker>Capital providing business with comprehensive financing, two companies of G.E. <v NBR Speaker>financial services. <v NBR Speaker>By A.G. Edwards, members of the New York Stock Exchange, serving individuals

<v NBR Speaker>and businesses through more than 380 locations, A.G. <v NBR Speaker>Edwards investments since 1887 and by the <v NBR Speaker>financial support of viewers like you. <v Jim Wicks>Good evening. We hope you've had a pleasant Independence Day, now because the stock <v Jim Wicks>markets were closed today. We're bringing you a special edition of the Nightly Business <v Jim Wicks>Report. <v Linda O' Bryon>It deals with a topic that has taken on growing importance for U.S. <v Linda O' Bryon>businesses over the past several years, quality and the number of companies striving <v Linda O' Bryon>to be the best both at home and abroad. <v Linda O' Bryon>We'll focus on how a variety of companies are seeking to be the best in their industries. <v Linda O' Bryon>We'll also try to offer some insight into how consumers feel about the quality of <v Linda O' Bryon>American companies, goods and services. <v Linda O' Bryon>For that, we'll use a survey conducted last year by the Gallup Organization for the <v Linda O' Bryon>American Society for Quality Control. <v Jim Wicks>Now, because the quality of American goods has been under fire in recent years, we'll <v Jim Wicks>start there. The survey asked more than a thousand people how they would rate

<v Jim Wicks>the quality of American goods in general. <v Jim Wicks>48% gave U.S. <v Jim Wicks>made products a high rating, down slightly from a similar survey the groups conducted <v Jim Wicks>in 1985. The percentage of people who rated American products as average <v Jim Wicks>remained the same at 36%, while those giving them low quality marks rose <v Jim Wicks>to 15%. The survey suggests that while most Americans believe the quality <v Jim Wicks>of domestic goods is acceptable, there is room for improvement. <v Katie Mann>Take a look at any bookstore and you'll see a barrage of new books on quality <v Katie Mann>today. Quality is like a buzzword among business people, but there's one organization <v Katie Mann>that's been talking quality for over 40 years, The American Society for Quality <v Katie Mann>Control. <v John Condon>Our primary objective is to provide an <v John Condon>array of programs and activities <v John Condon>to satisfy the professional needs of our membership. <v Katie Mann>John Condon is president of the ASQC, he says the main goal of his organization

<v Katie Mann>is education. Today, the group has 63,000 members worldwide. <v Katie Mann>They represent a huge number of businesses and industries. <v Katie Mann>The ASQC is headquartered in Milwaukee, Wisconsin. <v Katie Mann>It holds seminars and conferences here and around the country. <v Katie Mann>One of the first points it tries to get across to members is what quality means. <v John Condon>Quality today is basically satisfying customers <v John Condon>needs and expectations. <v Katie Mann>Meeting consumer expectations may sound like a simple idea, but for many companies, <v Katie Mann>turning that idea into reality is difficult. <v Katie Mann>Quality experts say a common pitfall is building a product, then trying <v Katie Mann>to mold American tastes around that product. <v Katie Mann>It's a backward approach that was especially common during the 1970s, and that approach <v Katie Mann>got some companies into deep trouble. <v Katie Mann>For example, Harley Davidson. <v Katie Mann>In 1981, when a group of Harley Davidson managers bought back the company from AMF, <v Katie Mann>they purchased a company in a serious financial slump.

<v Katie Mann>In an effort to turn the situation around, the new owners invested in statistical process <v Katie Mann>control or SPC. <v Katie Mann>During our visit to the Harley-Davidson plant, we saw SPC in action. <v Katie Mann>Dennis Bilton discovered that the boardings in an oil pump he produced seemed closer <v Katie Mann>together than normal. He stopped production and took the pump in for inspection. <v Katie Mann>Using robotic equipment, <v Katie Mann>a coworker discovered that the borings were off by 2/10000 of an inch. <v Katie Mann>That may not sound like much, but Harley managers say that tiny imperfection can cause <v Katie Mann>problems in starting the engine. <v Katie Mann>The part was scrapped, Bilton's equipment re-adjusted. <v Katie Mann>Managers at Harley say SPC involves tracking and charting every nuance <v Katie Mann>of manufacturing, and it requires a level of trust that's often lacking between workers <v Katie Mann>and managers. <v Leonard Ricard>That's the most important thing, that the employee doesn't get beat up because he's <v Leonard Ricard>identified a problem, but in fact the process has stopped and he's rewarded <v Leonard Ricard>for determining the fact that something has to be done. <v Katie Mann>SPC is one of many processes preached by the American Society for Quality Control,

<v Katie Mann>but officials at the ASQC and at Harley warn that by itself, SPC can't <v Katie Mann>transform a company's quality. <v Katie Mann>Donald Hansen says he learned that the hard way. <v Katie Mann>Hansen is president of Delta Resins, which produces chemical resins and high temperature <v Katie Mann>coatings used in the foundry industry, he invested in SPC in 1986. <v Donald Hansen>What we missed is uh the fact that a tool <v Donald Hansen>is fine in controlling the process, but what we had to do is change the culture of our <v Donald Hansen>people in the education and the philosophy of the whole quality process. <v Katie Mann>Hansen says that change in corporate culture is now underway beginning with <v Katie Mann>him. At the ASQC officials are encouraging other company leaders to take the <v Katie Mann>same kind of hard look at themselves. <v Katie Mann>They say investing in quality is the only way U.S. <v Katie Mann>companies will be armed for future survival. <v Linda O' Bryon>Companies are working hard to promote the quality aspects of their business through <v Linda O' Bryon>advertising, but they still have to prove themselves to consumers.

<v Linda O' Bryon>When the ASQC/Gallup survey asked consumers to rate service companies, <v Linda O' Bryon>banks came out on top. 54% gave banks a high rating, compared <v Linda O' Bryon>to 52% in the 1985 poll. <v Linda O' Bryon>Hotel's placed second with 44% saying they give a high level of service. <v Linda O' Bryon>Hospitals and insurance companies were next, although both slipped in consumer's eyes <v Linda O' Bryon>from three years previous. <v Linda O' Bryon>Airlines saw the biggest decline in consumer satisfaction, with only 32% giving them <v Linda O' Bryon>high marks for service, down from 47% in 1985. <v Jim Wicks>When it came to naming companies associated with high quality 15% <v Jim Wicks>of the respondents couldn't name any one. <v Jim Wicks>Of the ones they did named General Electric received the highest number of mentions with <v Jim Wicks>21%. General Motors and Ford shared a distant second place at 14%. <v Jim Wicks>IBM and Sears were both mentioned by 13%. <v Jim Wicks>And, you know, here's an interesting point, all three U.S. <v Jim Wicks>automakers placed in the top 10 with Chrysler ranked 8th.

<v Linda O' Bryon>After years of criticism, this may be another sign that the quality improvement programs <v Linda O' Bryon>instituted by the Detroit car makers are, in fact, working. <v Trudy Gallant>The emphasis on quality in the automotive industry came out of necessity after small, <v Trudy Gallant>fuel efficient Japanese cars invaded the U.S. <v Trudy Gallant>marketplace during the energy crisis of the mid 1970s. <v Trudy Gallant>American consumers loved their mileage, and they also discovered the cars were well-made. <v Trudy Gallant>Meanwhile, Detroit automakers had what was often called a find and fix approach to <v Trudy Gallant>quality. <v Arvid Jouppi>We were sloppy, uh we didn't really re-emphasize performance. <v Arvid Jouppi>We wanted vehicles that would get up and go and we didn't really care specifically <v Arvid Jouppi>about quality. <v Commercial Spokesman>There's no great mystery to satisfying your customers. <v Commercial Spokesman>Build them a quality product, treat 'em with respect, it's that simple. <v Trudy Gallant>But today, the auto companies are bending over backwards to please customers, claiming <v Trudy Gallant>their cars are the best made and the best backed. <v Commercial Narrator>GM is the only American car maker to offer a bumper to bumper warranty for 3 <v Commercial Narrator>years or 50,000 miles on every car or light truck we make.

<v GM Employee>What we produce here makes the economy stronger and provides good jobs. <v Trudy Gallant>And the UAW is involved through joint quality councils with carmakers and <v Trudy Gallant>through image campaigns aimed at workers to remind them that quality sells cars <v Trudy Gallant>and saves jobs. 1980 marked the worst year in Ford Motor Company's 80 <v Trudy Gallant>year history, with a $1.8 billion loss that forced the company to re-evaluate <v Trudy Gallant>and to look at quality as a possible driving force out of red ink. <v Bob Madon>At Ford, our goal is to build the highest quality cars and trucks in the world. <v Trudy Gallant>Ford executives say that policy has paid off. <v Steve Geoffrey>Since 1980, we've made uh 68 to 70 percent <v Steve Geoffrey>improvement, in things gone wrong, we've reduced a number of things going wrong <v Steve Geoffrey>by that amount. In over 20 percentage points I think improvement <v Steve Geoffrey>in customer satisfaction. <v Trudy Gallant>Guided by quality guru Dr. Edward Deming, the company made revolutionary <v Trudy Gallant>changes in how it approached manufacturing. <v Trudy Gallant>Customers were consulted at the beginning of the development process.

<v Trudy Gallant>The design was still on the sketchpad and feedback continued along the way. <v Trudy Gallant>Suppliers and plants were encouraged to strive for excellence through the Q1 awards <v Trudy Gallant>competition. <v Steve Geoffrey>And probably another major improvement has been involving the worker <v Steve Geoffrey>in the development process. In the case of the Taurus Sable, team Taurus <v Steve Geoffrey>there were over 450 recommendations made by the workers. <v Trudy Gallant>Workers were also given additional monitoring tools like SPC Statistical <v Trudy Gallant>Process Control, a system which identified problems before they leave the line. <v Trudy Gallant>The programs appeared to have paid off for Ford. <v Trudy Gallant>They've surpassed GM in profits the last two years, making $5.3 billion <v Trudy Gallant>dollars in 1988. <v Steve Geoffrey>There are some Japanese competitors that are still really number one in terms <v Steve Geoffrey>of the overall quality rating, but we're getting to the point where there's hardly a <v Steve Geoffrey>distinguishable difference. <v Trudy Gallant>Despite ongoing incentives, car sales are sluggish right now. <v Trudy Gallant>Still, automakers insist that even with streamlining, they can't afford to let quality <v Trudy Gallant>take a backseat.

<v Steve Geoffrey>There is that perception that quality costs, and we find that <v Steve Geoffrey>if we satisfy the customer, make <v Steve Geoffrey>the design more assemblable, easier to manufacture, <v Steve Geoffrey>and get the supplier doing it with fewer mistakes. <v Steve Geoffrey>Ultimately, when you look at the total system, it's more efficient, it's more timely, <v Steve Geoffrey>and it's less costly. <v Jeff Reisman>This is a prime example of America's service economy, the banking and financial <v Jeff Reisman>services industry, and this is one of the field's biggest players, Citicorp. <v Jeff Reisman>It has built a reputation as a company committed to service quality and being responsive <v Jeff Reisman>to its customers. <v James Stojak>If you treat a customer right, the customer is going to stay with you, and we continue to <v James Stojak>try to retain every single customer that signs up with us. <v Ron Zemke>Service quality is a retention strategy for an organization, and that's critically <v Ron Zemke>important today that you keep the business you have. <v Jeff Reisman>Service quality is a prime reason for selecting a bank and maintaining such <v Jeff Reisman>relationships, according to numerous consumer surveys. <v Jeff Reisman>Recognizing that, Citicorp within the last decade has stepped up its efforts to

<v Jeff Reisman>improve service quality. <v Steve Sershen>It has to be grown in our organization, it has to come from senior management down <v Steve Sershen>and everyone has to believe it in their heart. <v Jeff Reisman>Citicorp's efforts have brought visible results. <v Jeff Reisman>The company was the first to introduce automated teller machines on a large scale. <v Jeff Reisman>In the bank card area, 24 hour customer service centers like this resolve nearly <v Jeff Reisman>all inquiries and problems during the customer's first phone call, according to the <v Jeff Reisman>company. Nearly 80,000 calls a day come in. <v Jeff Reisman>At this customer service center in Maryland, Citicorp is keeping in touch with its <v Jeff Reisman>customers, said to be a key way for companies to maintain and enhance service quality. <v Jeff Reisman>The Citicorp employee is said to be a vital part of this process. <v Citibank CSR>Citibank, Melissa speaking, how can I help you? <v Steve Sershen>We need to hire people with a ?homely? Help you attitude because there's some things you <v Steve Sershen>can train for and some things you can't. <v Citibank CSR Manager>Primary purpose that we're going to fulfill- <v Jeff Reisman>The company holds six week training courses for new employees in the service centers. <v Jeff Reisman>Then quality control specialists monitor employee job performance. <v Karen Carbaugh>This is not unlike the kind of quality control that you would find in a manufacturing

<v Karen Carbaugh>company. <v Jeff Reisman>Signs of pride in work performance are seen around the Maryland service center. <v Jeff Reisman>Praise, recognition and monetary rewards contribute to employee satisfaction <v Jeff Reisman>according to the company. Citicorp says employee happiness brings better customer <v Jeff Reisman>service and an improved company bottom line. <v James Stojak>If we're constantly reworking mistakes that we've made, it costs you money. <v James Stojak>We do 'em right the first time, we can handle tremendous volumes at much lower costs. <v Jeff Reisman>Advertising campaigns of Citicorp subsidiary Citibank reinforced commitment <v Jeff Reisman>to customer service. An example is this commercial for the company's lost wallet service. <v Commercial Customer>No cash, no plane ticket, no credit card, no I.D., I called Citibank <v Commercial Customer>immediately. <v Commercial Customer Service Rep>I told her not to worry. <v James Stojak>The advertising based off real life experiences, these are not fabricated circumstances, <v James Stojak>but they're intended to reinforce the message that we're here for the customer 24 hours a <v James Stojak>day, 7 days a week. <v Jeff Reisman> To maintain and improve service, Citicorp listens to its customers and <v Jeff Reisman>its employees.

<v Ron Zemke>It's remarkable and in a way laughable how few organizations actually ask <v Ron Zemke>their own people, what are we doing that seems to get in the way of customer <v Ron Zemke>satisfaction? <v Jeff Reisman>While Citicorp's level of customer satisfaction now ranks about 97 percent, according <v Jeff Reisman>to in-house surveys, the company has set new goals to bring customer satisfaction levels <v Jeff Reisman>even higher. <v Dick Schaaf>The future of American industry will depend in part on its ability to develop new <v Dick Schaaf>quality products and technologies. <v Dick Schaaf>At 3M, innovation has been the key to the company's success, leading some to call <v Dick Schaaf>it the best general manufacturing company in the world. <v Dick Schaaf>More than 100 basic technologies, more than 60,000 products, <v Dick Schaaf>10 billion dollars in annual sales, nearly half to customers outside <v Dick Schaaf>the United States. The numbers flow from a steady stream of new products whose <v Dick Schaaf>primary selling point is the 3M reputation for quality. <v Allen F. Jacobson>Because that's really the future of the business. <v Allen F. Jacobson>The financial results are what we did this year, but the new products are what we're <v Allen F. Jacobson>going to do in the future.

<v Dick Schaaf>3M innovates because 3M plans to innovate. <v Dick Schaaf>Each year, at least 25% percent of annual sales are expected to come <v Dick Schaaf>from products that were not on the market five years ago. <v Dick Schaaf>Six and a half cents of every dollar earned goes back into research and development, <v Dick Schaaf>about double the R&D investment typical in American industry today. <v Dick Schaaf>And technical people are expected to spend 15% percent of their time on ideas <v Dick Schaaf>that they think can lead to new products. <v Arthur Fry>This is founded in the belief that-that every individual <v Arthur Fry>has a viewpoint that's unique to that individual, and they can see <v Arthur Fry>opportunities that will be missed by other people, and <v Arthur Fry>if you have um-us an organization system that <v Arthur Fry>generates inside out ideas versus just top down ideas, <v Arthur Fry>you'll get a lot more ideas. <v Dick Schaaf>Art Fry will be forever remembered as the Post-It note guy. <v Dick Schaaf>In his quest for a bookmark that wouldn't fall out of his hymnal at church choir. <v Dick Schaaf>He helped invent a whole new line of business.

<v Dick Schaaf>[Small indistinct conversation] He also helped make sure it met 3M's rigid standards for <v Dick Schaaf>quality. <v Arthur Fry>And we set up tests that would measure the quality at each point as well <v Arthur Fry>as we could, and if it didn't meet the requirements that we set for <v Arthur Fry>it and we set them high, the requirements as high as we can imagine, not as high as we <v Arthur Fry>can make, and we would throw it away. <v Arthur Fry>We wouldn't let anybody use it, in either in the laboratory, or in production. <v Arthur Fry>If you develop a product, get it to the market thinking <v Arthur Fry>that you'll clear up the quality problems later, all you do is set the table and somebody <v Arthur Fry>else comes along and eats your lunch. <v Dick Schaaf>The result of the millions of ?pants? <v Dick Schaaf>Sold since Post-it notes hit the market in 1979. <v Dick Schaaf>There have been just 80 complaints about bad quality product reaching the customer. <v Dick Schaaf>The post-it note relies on an adhesive coating that failed. <v Dick Schaaf>It didn't stick to things the way researchers spent silver planned, but encouraged by a <v Dick Schaaf>culture that rewards enterprise and initiative. <v Dick Schaaf>Art Fry found a practical new use for it, Dr. William Isaacson 's story <v Dick Schaaf>is similar. In the 1970s, he worked with reflective optical coatings on

<v Dick Schaaf>highway signs. Then he started wondering whether the basic polymer technology couldn't <v Dick Schaaf>be applied to contact lenses. <v Dick Schaaf>This year, 10 years later, the result of his work is finally on the market. <v Dick Schaaf>The Allergan Advent developed by 3M, the first new contact lens <v Dick Schaaf>in a decade. <v William Issacson>I think that every product really has to have a champion, and uh, in this case, <v William Issacson>I was the product champion and I had some very strong support at the upper management <v William Issacson>level. I think-I think some people that really believed in what I was doing were willing <v William Issacson>to-to hang in there with me. <v Dick Schaaf>At 3M, they call it practical dreaming, and it's an environment that builds long term <v Dick Schaaf>loyalty. Allen Jacobsen came to 3M 42 years ago as a product <v Dick Schaaf>engineer fresh out of Iowa State University, Art Fry's 3M career <v Dick Schaaf>spans 35 years, Isaacson's 25. <v William Issacson>To me, I have a challenge here, I have an opportunity, I have freedom and I have <v William Issacson>support, and what more could you want? <v Christyna Copeland>Are happy workers really better workers?

<v Christyna Copeland>And if so, how far should a company go to keep its workers happy? <v Christyna Copeland>Miami based Hyder System offers a number of special benefits to its employees, <v Christyna Copeland>including this fitness center, tuition and child care reimbursements, as well as the <v Christyna Copeland>more standard health and financial benefits. <v Christyna Copeland>The company sees it as a way of improving the quality of its workforce. <v Gail McDonald>In a service company, the company's success is directly <v Gail McDonald>related to the quality of the people. We cannot do it without a quality workforce, <v Gail McDonald>so anything we can do to attract quality people, to develop people, to become better than <v Gail McDonald>they may have even thought they could be, to keep them in the company, to have them uh <v Gail McDonald>talk to their friends who might be future customers of the company. <v Gail McDonald>Anything we can do to build that quality workforce is directly related to our business. <v Christyna Copeland>Many companies are discovering the benefits of offering special amenities to their <v Christyna Copeland>employees, like the workout center or even a quiet place to think in the <v Christyna Copeland>middle of a busy office building. <v Christyna Copeland>But they all agree that benefits like these can take the place of quality communications

<v Christyna Copeland>between workers and management. <v William Werther>These areas write checks, higher pay, higher benefits, better working conditions, <v William Werther>and those are gonna be necessary to attract or retain workers no question about it, but <v William Werther>those are relatively easy. It's a matter of just simply coming up with the money. <v William Werther>The tough part is what the manager is going to have to do. <v William Werther>The manager is going to have to respond to the employees and become more responsive. <v Christyna Copeland>Ryder has instituted a three part quality program that includes strong emphasis <v Christyna Copeland>on worker involvement in making recommendations. <v Gail McDonald>That start with the premise that the person who best knows how to do a job and best <v Gail McDonald>knows what needs to be changed is the person who's doing the job, not someone three, or <v Gail McDonald>four, or five levels higher. <v Christyna Copeland>Formal training sessions as well as informal groupings give employees a chance to <v Christyna Copeland>discuss problems and exchange ideas with management, making sure that rank-and-file <v Christyna Copeland>workers have a say in improving productivity has become an increasingly popular part <v Christyna Copeland>of quality control programs. <v Christyna Copeland>A study by the Boston University School of Management Manufacturing Roundtable <v Christyna Copeland>found that the number of organizations where all employees are kept informed of business

<v Christyna Copeland>goals and strategies has nearly doubled since 1984. <v William Werther>What we're seeing is time after time, when you read about a company that's going through <v William Werther>a turnaround, it often starts with the financial changes that we read about in the <v William Werther>financial press, but if you look at the company two, or three, or four years later and <v William Werther>ask did those changes make a difference? <v William Werther>If the answer is yes, if the company is in fact being successful, almost always you find <v William Werther>a change in how management, how the boss treats the worker. <v Christyna Copeland>Labor forecasters say business is in for a tough time as it moves into the next decade. <v Christyna Copeland>Not only will the labor pool be smaller, but it will also be filled with more women, <v Christyna Copeland>minorities and immigrants than ever before, putting added pressure on companies <v Christyna Copeland>to improve their ability to respond to workers needs. <v Christyna Copeland>Companies looking to move ahead may find the flexing the corporate muscle first <v Christyna Copeland>requires the ability to let workers bend an ear. <v Jim Wicks>One of the biggest challenges U.S. companies face in the race to be the best is from <v Jim Wicks>foreign business. But the American Society for Quality Control Gallup survey found

<v Jim Wicks>that most Americans believe in the quality of U.S. <v Jim Wicks>products. The survey found 53% thought the quality of products made <v Jim Wicks>in the U.S. by American companies was better than the quality of products <v Jim Wicks>made by foreign companies outside the U.S.. <v Jim Wicks>Only 14% thought the reverse was true. <v Linda O' Bryon>But there was a large difference of opinion on that question, depending on the <v Linda O' Bryon>respondents job category. <v Linda O' Bryon>The U.S. made goods, got their highest ratings from those in clerical sales and <v Linda O' Bryon>service jobs and those not in the workforce. <v Linda O' Bryon>While foreign products received higher marks from professional and business people, <v Linda O' Bryon>the issue of U.S. versus foreign quality is also being debated in Washington, <v Linda O' Bryon>where the government is trying to decide what role it should play in helping American <v Linda O' Bryon>companies. <v Helen Whelan>After World War 2, when Europe and Japan were devastated, the U.S. <v Helen Whelan>was the world leader in the manufacture of cars, steel, and television. <v Helen Whelan>Today, Zenith is the only American company making television sets.

<v Helen Whelan>U.S. made steel provides a scant 10% of the world's needs and U.S. <v Helen Whelan>autos only 24% of the world's cars, the list goes on and on. <v Helen Whelan>American made textiles, shoes losing out to made in Taiwan, made in Japan. <v Helen Whelan>Some say that's because America's quality has deteriorated, but the growth in the number <v Helen Whelan>of companies initiating quality control programs has others saying it's possible <v Helen Whelan>for the U.S. to return to its position as a world leader. <v Richard Gephardt>I predict that in the next 10 years, American products will again be known <v Richard Gephardt>for very high quality. <v Spokesman>High definition- <v Helen Whelan>One area where the United States government thinks America can lead the world is in high <v Helen Whelan>definition television, despite a giant headstart by the Japanese, <v Helen Whelan>and soon the Bush administration will announce how much it plans to help. <v Robert Mosbacher>We are at this juncture developing a policy <v Robert Mosbacher>in the administration as to standards and as to <v Robert Mosbacher>other aspects of uh whether there will

<v Robert Mosbacher>be any government involvement. <v Helen Whelan>House Majority Leader Richard Gephardt says the government should definitely get <v Helen Whelan>involved. <v Richard Gephardt>We need a game plan. If we let everybody go on their own, I think you'll have another <v Richard Gephardt>situation like we had with the VCR where we talked about it, but never <v Richard Gephardt>did it. <v Helen Whelan>So, in other words, we need an industrial policy. <v Richard Gephardt>I wouldn't call it an industrial policy because that carries so many other connotations <v Richard Gephardt>uh that people fear. <v Richard Gephardt>People don't want a central bank making decisions, they don't want a federal <v Richard Gephardt>government saying who does what and how it should be done. <v Richard Gephardt>I rather see it as a cooperative effort for economic progress. <v Helen Whelan>Already, the government is getting into cooperative research and development projects <v Helen Whelan>with the steel industry and computer chip manufacturers. <v Helen Whelan>The first R&D joint venture was between 14 semiconductor manufacturers and the <v Helen Whelan>Defense Department called Sematech. <v Bob Noyce>The Defense Department uh supported this because we were losing in that business <v Bob Noyce>and it's our mission to become a winner.

<v Helen Whelan>In fact, the same companies that make up Sematech have asked the government to change its <v Helen Whelan>antitrust laws to allow competing companies to jointly produce computer chips. <v Bob Noyce>One of the reasons for putting a consortium together is to try to get the shared learning <v Bob Noyce>from many companies put together in one entity so that we can pass that shared learning <v Bob Noyce>back to the members uh and uh consortium for manufacturing <v Bob Noyce>is more tightly coupled than that. <v Helen Whelan>And according to House Majority Leader Gephardt, competing companies should be allowed to <v Helen Whelan>jointly manufacture products, and Republican Tom Campbell has introduced a bill to <v Helen Whelan>allow them to do just that. He says businesses need to worry less about domestic <v Helen Whelan>competition and worry more about beating foreign competitors. <v Tom Campbell>The government gives permission under the antitrust laws and says that we believe that <v Tom Campbell>the market you're identifying, whether it's HDTV, high megabit DRAM, or <v Tom Campbell>steel, or automobiles, is such that the world is the market. <v Tom Campbell>There's very little chance of anti-competitive result from allowing you two to work <v Tom Campbell>together, good luck. <v Linda O' Bryon>An overwhelming number of those questioned in the ASQC/Gallup survey also feel

<v Linda O' Bryon>that the quality of American made products will improve, although the optimism has <v Linda O' Bryon>declined slightly since 1985. <v Linda O' Bryon>68% feel American quality will improve over the next five years, <v Linda O' Bryon>20% thought it would stay the same, only 11% predicted a decline. <v Jim Wicks>You know, one thing seems clear in all this. <v Jim Wicks>American companies are increasingly aware of the need for better quality goods <v Jim Wicks>and services, and they are taking the steps to improve quality in their own businesses. <v Jim Wicks>But how far can it go? Well, we leave you with a quote from the Boston University <v Jim Wicks>Manufacturing Roundtable study on the future of manufacturing. <v Jim Wicks>And it goes like this, "the only losers in the race for quality will be those <v Jim Wicks>that believe they finished.". <v Linda O' Bryon>Thank you for joining us this evening. Please join us again tomorrow night and every <v Linda O' Bryon>weekday night for the regular edition of the Nightly Business Report. <v Linda O' Bryon>I'm Linda O'Bryon. <v Jim Wicks>And I'm Jim Wicks. For all of us at the Nightly Business Report. <v Jim Wicks>Good night.

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