The Boston Globe from Boston, Massachusetts • 34

34 THE BOSTON GLOBE THURSDAY. SEPTEMBER 18. 1980 0 US, China in accord on sea, air, textiles 1 i 1 1 Bv BEATSON WALLACE The Japanese threat to US There is an Industrial Paul Revere stalking the country shouting "Wake up America!" If we should awaken, he is certain we will discover that Japan is the world's leading industrial nation. Detroit needs no reminder. Japanese auto makers already have cornered 22 percent of the US market and are aggressively after more.

They already have 40 percent of the present semiconductor market. They successfully destroyed our domestic television industry and muscled out camera competitors. Ditto for shipbuilding and now it's steel. But this is only the beginning. The Tokyo planners, always a combination of government, industry and labor, have some new goals.

They see worldwide demand for steel increasing by 50 percent and they are determined to grab half this new market share The highly successful Japanese motorcycle manufacturers are gearing up to invade the two-cycle and four-cycle engine business here. Soon you probably will find only Japanese engines in your new lawn mowers and hand power tools. And for tomorrow, Japan has three new. high technology targets: The next generation of semiconductor chips with four times the memory capacity of present ones; robots for labor-free manufacturing, and bio-technology processes for industrial uses. In each of these technology-of-tomor-row fields, the actual use and research and development is said to be ahead of comparable efforts in the US.

VET i i i actually gives 55 US ports, including Boston, a "favored port status," meaning Chinese ships can dock there with four days notice. Entry to other ports would be conditional on 7-14 days notice. Massport Executive Director David W. Davis had been lobbying heavily for the "favored port and was on hand for the ceremonies in Washington yesterday. Massport officials said failure to receive 1 this status would effectively eliminate the port as a competitor for Chinese trade because of cargo carri- ers' failure to keep fixed schedules.

"This agreement really puts the port of Boston on the map again," said a Massport noting that Boston had been excluded from a simi- lar agreement with the Soviet Union in 1972. In the past, the Chinese have expressed interest -ln importing New England's high technology pro-ducts. Traditionally these products are exported by air, but if a recent Chinese contract with Corp. is any indication sea trade with China may -Increase. Balrd, based in Bedford, announced a contract Aug.

18 to sell China $580,000 worth oC- optical emission spectrometers for chemical analysis of metals. China asked that the spectrometers be shipped by boat. Baird's director of international operations, Charles French, said the goods will probably be shipped early next month and the port "could well be Boston." Increase consular relations between the two countries, allowing China to open new general con- sulates In Honolulu, Chicago and New York, In tlon to offices now in San, Francisco and The United States, in turn, will open three new con- sular offices in China. The sites have not been determined. From Wire Services WASHINGTON The United States and China climaxed months of difficult negotiations yesterday by formally agreeing to open new consulates and expand commercial airline traffic, shipping and textile trade between the two nations.

At a Rose Garden ceremony. President Jimmy Carter and Chinese Vice Premier Bo Yibo signed four accords and pledged continued growth in trade and diplomatic relations. One of the accords established Boston as one of 55 "open ports" in the United States for Chinese trade. The new accords, which form the first US-Chinese treaty and will require Senate ratification, will: Establish the first scheduled commercial airline traffic between the two nations in 30 years. Each country will designate one airline to operate up to two round trips per week between New York and Peking via San Francisco or Los Angeles.

Honolulu and Tokyo or another point in Japan. Another route could be set up after two years. Establish quotas on textile products that China can export to the United States through Dec. 31. 1982.

This will significantly increase current, unilaterally imposed limits on such Items as cotton gloves, knit and non-knit shirts and blouses, trousers and sweaters. "This agreement will benefit American retailers and consumers without damaging our own textile Industry, which was fully represented In the negotiations," Carter said. China is the fifth largest supplier of textiles and apparel to the United States. US manufacturers have feared an infusion of textiles will deflate prices and hurt domestic sales. Open all US ports to Chinese merchant ships and all Chinese ports to American vessels.

The pact rr It And that's why, in the words of William Givens, Japan is fast becoming the "headquarters of an economics system which will dominate the world" for decades. Givens runs a Boston-based consulting firm. Ships such as this one may be appearing in the port of Boston if US Senate approves of a Carter Administration agreement with China, globe file photo Twain Braxton Asia from Sears Crescent and Lon ger funds for nonunion firms hit Use of oension JL gle investor in that firm," Barber said. The UMass conference was one of a series Rodgers By Wilfrid C. Globe Staff i "Iowa Beef is the largest re-packager of, meat in the country.

It is on the AFL-CIO boycott list, after it beat a 13-month strike of meatcutters," Barber said. "Yet a Teamster Union pension fund is the second-largest investor in the company." Other non-union firms singled out by Barber as being financed with union funds included Adolph Coors, the brewer; the McDonald's Corp. fast food chain, Texas Instruments, Eastman Kodak Co. and International Business Machines. Another speaker.

Prof. Barry Bluestone of Boston College, warned the labor leaders that, unless they have a voice in the reindus-trialization of America, there will be a relaxation of legislation that labor has spent a lifetime in putting on the statute books. Walsh emphasized that funds should be Invested In areas beneficial to the workers, whose deferred wages are represented by the pension funds. He said it was "ridiculous" that some pension funds such as the MBTA should be realizing a return less than what they would receive from a savings account. He said $20,000 in legal fees had been spent trying to wrest the administration of the MBTA pension fund from The First National Bank of Boston.

Barber said 286 members of the United Commercial Workers Union had been notified this week they would lose their jobs because Stop Shop is closing its Marlboro plant In favor of buying pre-packaged meat. i scheduled to be held across the nation as trade unions seek more control over their pension funds. Barney Walsh, president of the Council, told the conference that a committee will be appointed to find out where the funds of Boston building trade unions' are being Walsh said union pension funds will reach $3 trillion in 1985, according to a De-; partment of Labor estimate. "We are going to develop a course of action to make sure those funds are channelled into union construction and not non-union construction," he said. Boston building trade unions yesterday heard charges that their organizations were being put out of business by their own and other unions' pension funds.

Randy Barber, co-author of "The North Will Rise Again," charged that a galaxy of US firms, all non-union, are being financed by the funds. Barber told the Conference on Investing Union Pension Funds sponsored by the Boston Building Trades Council and UMass, Boston, that one such firm is Halliburton largest non-union construction firm in the nation. "Union pension funds are the biggest sin- Scene from one of Japan's cold strip rolling mills. v. GLOBE FILE PHOTO don offices, and criss-crosses the country in search of audiences willing to learn about the Japanese success story.

The former Foreign Service officer and member KLH is leaving for California of the Boston Consulting Group is not promoting Japan. He wants to alert government, industry and union leaders to the no-holds-barred competition Japan Is waging for world market share. He says we already are the No. 2 economic power and slipping fast. i 1 To reverse this trend, Givens thinks we should learn what the Japanese are doing right and what we re doing wrong.

son for the losses. For the nine months ended April 26, EAD net income dropped more than 60 percent from $1.35 million, or 64 cents per share, to $442,000. or 23 cents for the corresponding period last year. Sales rose more than 8 percent to $60.8 million from $53.7 million for the same nine-month periods. KLH was best known for its high fidelity loudspeakers during the formative years of stereophonic sound, and later for its high- quality tabletop AMFM radio and a compact stereo For starters, he says tl ey protect their infant in dustries, particularly high technology ones, from facility here," said Henry Kloss, a founder and the in KLH.

who is perhaps better known as the founder of Advent the projection screen television pioneer, and now Kloss Video of Cambridge. Kloss, Malcolm Lowe and J. Anton Hoffman launched the company in 1957 after leaving Acoustic Research, another Cambridge loudspeaker firm they helped launch. In a decade, KLH had grown to $17 million in sales. It employed more than 500 people and sold 30,000 -speakers a year before Kloss sold it to the Singer Co.

in 1967 for $4 million, or 22 times earnings. "I left (KLH) because I thought the business would take off to where KLH would become another Magnavox or RCA," recalled Kloss yesterday. But the thousands of moderately-priced tabletop radios KLH sold in its prime have become collector's items. Singer's plans to enter the home entertainment market never took off and it sold the company to EAD In 1970. The division was subsequently moved from Cambridge to a leased, 75,000 square-foot building in Westwood.

"To give KLH its due, you must remember that there are 350 American loudspeaker companies and they continue to make high quality products," said Kloss, noting that the industry is in a slump and competition is unusually fierce. By Ronald Rosenberg Globe Staff KLH Research and Development Corp. of Westwood, once one of the nation's premier loudspeaker manufacturers, is moving to California in a consolidation move that will leave 80 people unemployed. The 24-year old company, a wholly-owned subsidiary of Electro Audio Dynamics Inc. of Great, Neck.

N.Y.. for nearly a decade, will relocate to Con-oga Park, where EAD manufactures its Infinity brand of loudspeakers. The move, scheduled for November, is designed to save on manufacturing costs, explained Denis Wratten, KLH president. However, sales, product development and marketing will remain separate from Infinity, he said. Only top management of the company will relocate to the West Coast.

While EAD declined to divulge specific sales and earnings figures for KLH, a company spokesman said the loudspeaker subsidiary has been losing money for at least two years. According toTasfyear's annual re1 port, the high fidelity group, which includes both speaker lines, a 60-percent owned foreign loudspeaker subsidiary and a small domestic television antenna firm, accounted for only 4 percent of the company's operating profits versus 42 percent in 1978. The spokesman said KLH is the major rea- foreign competition. They offer tax incentives tor research and development and exports. And, just as important, their income tax rates encourage personal savings of about 21 percent last year versus less than 4 percent in the United States, creating a ready pool of funds for investment in new plants and equipment.

GJvens does not minimize the stark differences in Japanese and American work ethics; which result In practically no labor turnover and cooperative efforts at quality control on the production line. But tnore important than these differences to Givens are the continuous efforts by government, management and labor first to set national targets and then'cooperatively sell abroad. By contrast, US government-business relations more often are of an adversary nature with more emphasis on regulation and too little on tax incentives. "We have consistently protected our lowest-productivity industries (steel is the best current example), and have done virtually nothing to encourage the flow of resources into the higher technologies," Givens says. If things don't change, he believes that the US will find itself "competing with the Taiwanese, the Filipinos, tlie Koreans and later on the emerging economies of Africa and Latin America, while Japan and Germany move into a league of their own." That isn't much of a future for the world's once leading economic power.

Givens believes American industry is in a state of emergency and the time has come for new national goals just as attainable as the one that "put a man on the 1 i system. The latter combined the phonograph with an AMFM radio and amplifier in one small box the first of its kind. It was designed for the apartment dweller with a limited budget and little room for a large console system. The all-in-one system has since been copied by Japanese consumer electronics manufacturers. Today the company only manufactures loudspeakers for the consumer market, including a new line with a microcomputer designed to improve the speaker's sound.

"I wish they were stronger and large enough to maintain a separate uritmrr" -i PROPER FRAME The Federal Trade Commission is seeking advice from consumers that would help it frame a new rule lifting restrictions on how optometrists can practice. Critics say present restrictions reduce competition and push up the price for eyeglasses. globe file photo Tirsf, community groups exchange charges NYSE Summary SEPTEMBER 17 71,558,100 Total shares traded: 1916 Issues traded: Up I Same Down I 1098 I 337 481 I bank watchdog group had said has been making a substantially larger number of loans in the Southern United States than the parent corporation has been making in Boston. He said that MCS' primary business is making mortgage loans, then selling them in the secondary market within 30 days after the loans are made. Attacking accusations that FNBC's prime interest is expanding its international operations to the detriment of the city and the state, Klives said.

"Our expansion throughout the world does not mean we can not or do not meet the credit needs of Boston. Our expansion means jobs," for Boston residents. "I'm not going to argue that we have had a large number of residential mortgages in Boston. We don't," Klivens said. He explained that commercial banks have tradl- tionally not been mortgage lenders.

Responding to the charges, Robert Kli-vens. an attorney for FNBC, said, "We don't take the blame for all of those things. We've done many things that have helped the community." Arguments that FNBC banking subsidiaries do not make strong commitments to the communities in which they do business are ridiculous, Klivens said, because no bank can succeed without doing good business in its community. Klivens refuted a number of figures that MURAG has made public in its challenge of the merger application, including one that said more than $3 billion of the deposits at the corporation's banking subsidiaries come from Suffolk County. He also said that MURAG did not understand the operations of the corporation's Mortgage Company of the South, which the fore a full hearing room in the McCormack Building, those speaking against the proposal repeated the charge levied at earlier hearings that FNBC had violated the federal Community Reinvestment Act which requires banks to meet the credit needs of the communities in which they do business.

"It is distressing that a bank that has the nanie of 'The First' seems to be last when it comes to mortgages and community concerns," said state Rep. John Finnegan D-Dorchester). Those asking for a denial of the bank holding company'sapplication made wide-ranging charges against FNBC, accusing the corporation of, among other things, redlining Boston neighborhoods, racial discrimination and aiding in the distruction of a community of Navajo Indians in Arizona by supporting the development of nuclear power. By Donald Lowery Globe Staff Representatives of more than a dozen Boston community groups last night asked the state Board of Bank Incorporation to deny a merger application between First National Boston parent of The First National Bank of Boston, and Haverhill National Bank. A spokesman for FNBC said that the arguments by the community groups were "illogical." adding that facts used in the arguments were either not understood or misinterpreted by the main group leading the challenge.

The hearing was the third on the merger application by FNBC, whose primary chal-' lenger has been the Massachusetts Urban Reinvestment Advisory Group (MURAG). In more than two hours of testimony be- NYSE index 74.57 1.16 PComp 128.87 2.13 Dow Jones Ind. 961.26 15.36 jium wijmw i mi ii Hi mi imnaBtt OPEC fuels advance Pg. 38.