GE, Sears take tip from Japan, form groups to spur US exports

March 26, 1982

For years the huge Japanese trading companies, such as Mitsui and Mitsubishi, have played an instrumental role in expanding Japan's exports to the rest of the world.

Trade officials estimate that the six major Japanese trading firms, the so-called ''sogoshosha,'' account for an estimated $300 billion in worldwide trade annually. In addition, these companies, which handle both exports and imports, are responsible for more than 10 percent of all exports shipped out of the United States.

Now, at least two major US companies are borrowing a page from the Japanese trade book, forming their own export trading companies in an attempt to facilitate the flow of US products to other nations.

The General Electric Company and Sears, Roebuck & Co. have disclosed plans to form large export trading units, patterned in part on the Japanese model. Others , such as Citicorp and Westinghouse, are believed to be considering similar steps.

GE, in a move announced early this month, plans to form a new export subsidiary, General Electric Trading Company, designed specifically to help small and medium-size domestic companies take advantage of GE's worldwide distribution network in expanding exports to developing countries.

George J. Stathakis, a GE vice-president named to head the new export unit, said he expects the trading subsidiary to be handling more than $2 billion in exports within the next five years.

Mr. Stathakis believes the new export unit will provide what he calls ''a one-stop export service'' for the estimated 20,000 small and medium-size businesses that produce high-quality engineered products but which lack the expertise and know-how to export on a large scale. ''What we're talking about is technical and engineered industrial products,'' Stathakis said in a telephone interview.

Specifically, he said, GE is interested in offering the services of the export subsidiary to smaller companies that produce products such as machine tools, diesel engines, welding equipment, skilled hand tools, small compressors and pumps, valves, blowers, fans, controls, and instrumentation.

The GE executive said the new firm, which will start operations July 1, will concentrate its export efforts on developing nations in the Middle East, Africa, Latin America, and Southeast Asia which are likely to attain annual growth rates of more than 15 percent over the next decade.

GE also plans to market some of its own products in the new unit. These would include complementary products, for the most part, such as small motors, transformers, circuit breakers, and light bulbs.

Stathakis noted that many small and medium-size firms face difficulty in tapping new export markets because they lack an international marketing structure. ''We have a proven structure in place,'' he said.

He added that the existing GE organization, which handles countertrade and barter deals - also a significant growth area in international trade - will be incorporated into the new trading company. GE has countertrade offices in 18 countries and sees continued growth not only from Eastern-bloc nations but also in other countries including Canada, Spain, Greece, and the People's Republic of China.

Stathakis and other GE officials appear convinced the new export effort does not run afoul of US antitrust laws, which in the past may have inhibited such moves by domestic firms.

Asked about pending legislation in Congress which would authorize joint-venture export arrangements, GE officials said congressional action on the export trading company bill would not affect the company's decision one way or the other.

Since disclosing plans for the export unit, GE has received hundreds of inquiries from small business men interested in taking advantage of the export services. While the company has yet to sign up any customers for its service, ''the response has been very positive,'' a spokesman said.

Although there are manufacturer's representatives and export assistance companies that help sell products overseas, GE feels it has an advantage with its technical expertise to handle products made by industrial companies. ''The problem with manufacturer's reps is that they don't have the technical expertise to do the job for us,'' said one small business man, who runs a tool and die company. ''They know how to sell carpets and furnishings, but they don't know a thing about the products we make.''