The Trade Parade Grows Longer

Some U.S. firms discover bumper profits selling abroad

In many companies, exporting has always been something of an afterthought, but in my corporation we consider foreign sales every bit as important as our domestic business." So says E. J. White, marketing vice president for Crompton Co. of New York, a medium-size textile maker (1979 sales: $159 million). Reason: in the past seven years, Crompton's export business has leaped from zero to 30% of its annual sales.

Crompton's experience is by no means unique. As high inflation and slow growth crimp the ability of businesses to make a profit in the U.S., more and more American firms, large and small alike, are turning to exports to boost sales. They are having success in part because the decline of the dollar has made U.S. goods increasingly attractive in foreign markets.

Figures released by the Commerce Department for August showed that the nation's trade deficit continues to narrow; imports exceeded exports during the month by only $1.1 billion, the best such performance since May 1976. Commerce Secretary Philip Klutznick predicts that the deficit, which during 1979 was pared to $37.3 billion from 1978's record-breaking $39.4 billion, will drop by a further $2 billion to $3 billion this year.

Agricultural exports, long the mainstay of the U.S. economy's international sales drive, have performed well in recent months despite the drought that gripped much of the nation. But shipments abroad of manufactured goods have also come on strong. During August these rose by 3.8% over the month before. Indeed, American sales of manufactured products to the European Community are now 46% higher than they were a year ago.

Exports of manufactured products have traditionally been dominated by a handful of the nation's largest companies, including Boeing, General Electric, Caterpillar Tractor, McDonnell Douglas and Du Pont. A surprising new export winner is the American textile industry, which is the world leader in productivity despite relatively high labor costs. Burlington Industries of New York, the nation's largest textile maker, with 1979 sales of $2.7 billion, saw its foreign business jump by 40% during the year. The big sellers: carpets, towels, curtains and clothing.

Smaller companies, many of them with less than $100 million in annual sales, are also making forays into foreign markets. Typical of the U.S.'s new generation of exporters is Keedon Enterprises, Inc. of Los Angeles, a privately owned manufacturer of hydraulic platforms, which sell for between $11,000 and $20,500 and are used as mobile scaffolds in the construction industry. The firm opened in 1973, but it did not export at all until 18 months ago. Now 50% of Keedon's output is sold abroad, and the company has distributors in 33 nations. Company Vice President Bob Ryland gained a foothold in the Australian market by the disarmingly straightforward method of writing letters to 50 building-supply firms listed in the Sydney Yellow Pages. He received replies from 40 of them. Says he: "Many small businesses are unaware of the opportunities abroad. A machine like ours would cost four times as much if made in Japan, and twice as much if manufactured in Europe. U.S. manufacturers are very competitive."

A number of companies that lack the resources to maintain sales staffs overseas are cracking foreign markets by using independent dealers abroad. Scientific Radio Systems Inc., an eleven-year-old Rochester manufacturer of high-frequency radio transmitters and receivers, exported nearly 60% of its $6.5 million in sales last year. Its products are particularly popular in less developed countries, where they are used to supplement often unreliable local telephone systems.

Explains Melvin Stiles, the company's president: "Here in the U.S., either I or someone else in the company has direct contact with our customers. But overseas, in such places as Saudi Arabia, it is too expensive to maintain an office, so we I rely on a dealer. He's the person who I unearths the opportunities and makes I the sales. We offer our equipment I to the dealer at a discount off the list price, and his markup to the customer is, in effect, his commission."

American companies are moving into exports despite the continuing plethora of U.S. laws and regulations that make it difficult to do business abroad. Last month the Carter Administration sent a hefty 250-page report to Congress on the various ways the U.S. discourages exporters. One example: the provisions of the 1977 Foreign Corrupt Practices Act, which have never been clearly spelled out by the Justice Department. American businessmen complain that they are uncertain about what the law considers illegal bribes and what it regards as acceptable payments to local agents. Complains Lawrence A. Fox, vice president of the National Association of Manufacturers: "We're the only country that has export obstacles like the Arab boycott, antibribery laws, human rights restrictions, limitations on sales of nuclear-related equipment and the heavy taxes placed on Americans working abroad." Washington should hardly be expected to encourage international bribery by U.S. businessmen. But eliminating some of the other restrictions that hobble eager exporters would accelerate a welcome trend that is already bringing benefits to the U.S. economy. sb

This file is automatically generated by a robot program, so viewer discretion is required.