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NO. 6 — February 13, 1998

 

Feature Article

AN INSIDER'S VIEWS ON U.S.-JAPAN PRODUCTION JOINT VENTURES

An Interview With M. Alexander Graham, President, Dominion Semiconductor

Summary

Can two titans of the electronics industry that have competed head-to-head in the marketplace and possess different corporate cultures successfully join forces? International Business Machines Corp. and Toshiba Corp. apparently were confident that they could when they announced in August 1995 the launch of a U.S.-based joint venture to manufacture 64-megabit dynamic random access memory chips for use in computers and other advanced electronic products.

Dominion Semiconductor, located in Manassas, Virginia, actually is the second joint venture undertaken by IBM and Toshiba. In September 1989, the two companies formed a partnership in Japan to make flat-panel displays. However, as Dominion Semiconductor President M. Alexander Graham points out in the following discussion with JEI Senior Political Analyst Barbara Wanner, the two ventures are completely different. With Dominion Semiconductor, both companies have been forced to deal head-on with profound differences in operations management and business decisionmaking. Mr. Graham shares some lessons learned by IBM and Toshiba that may prove useful to other American and Japanese companies contemplating a partnership.

* * * * * * * *

M. Alexander Graham is president and general manager of Dominion Semiconductor. Before being named to that position, he was International Business Machines Corp.'s site operations executive, North region, responsible for IBM sites in East Fishkill, Poughkeepsie, Kingston and Endicott, New York and Burlington, Vermont as well as IBM Canada locations. From 1987 to 1990, he headed IBM's general technology division operations in Manassas, Virginia. Mr. Graham was with IBM for 32 years. He holds bachelor's and master's degrees in mechanical engineering from City University of New York.

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Weekly Review

ECONOMIC PLANNING AGENCY DOWNGRADES ECONOMY'S CONDITION by Douglas Ostrom

Japanese policymakers could not quite bring themselves to say the "r" word, but they came awfully close February 6. That seemed to the consensus regarding the Economic Planning Agency's announcement that the economy was in a period of teitai (slump or tie-up). Officials were said, in fact, to hint that the economy had entered a recession. Increasing amounts of data support that view.

 

ASIAN CREDIT CRUNCH SPURRING INTERNATIONAL RESPONSE by Eric Altbach

In an attempt to loosen the credit squeeze that has brought trade with troubled Asian economies to a near standstill, a group of nations led by the United States, Australia, Singapore and Japan has initiated various actions to provide financing. Singapore has proposed a multilateral trade-finance facility for Indonesia. Washington and Canberra have expanded their own trade-financing programs, while Tokyo, stung by criticism from numerous quarters about not doing enough to help Asian neighbors, is considering a similar move. However, more foreign assistance in financing exports to Asia may be controversial. Australia's government already has condemned an expansion in the U.S. farm export-financing program as a ploy to seize Asian market share from Australian producers; in response, it enlarged a similar program. Failure to agree on a coordinated approach could give rise to a new source of trade friction among the major trading partners of troubled Asian economies.

 

COMPETITION HEATS UP IN JAPAN'S TELECOMMUNICATIONS MARKET
--- by Jon Choy

Since long-distance carrier Japan Telecom Co., Ltd. swallowed overseas call provider International Telecom Japan Inc. last October (see JEI Report No. 44B, November 21, 1997), a series of announced mergers and new business plans has begun to rewire Japan's telecommunications market.

 

OUTLOOK UNCERTAIN FOR OKINAWAN HELIPORT by Barbara Wanner

The outcome of a February 8 mayoral election in Nago, a small coastal city on Okinawa, has called into question whether Tokyo can implement a key element of a comprehensive plan to reorganize and consolidate the U.S. base presence in the southernmost prefecture over the next five years. At issue is the construction of a sea-based, floating heliport located off Nago's shores. It would replace the heliport now used by U.S. Marines for training at Futenma Air Station when the latter is returned to Japan by the year 2003.

 

Notes:

 

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