The Computer Big Shots Firing Away In WashingtonMark Lewyn
When chief executives of the dozen largest U.S. computer companies met in Washington on Dec. 3, they were ostensibly promoting federal funding of a national computer network. But on the side, the Computer Systems Policy Project (CSPP) was demonstrating how any industry might amplify its voice in Washington. The CEOs spent an hour briefing U.S. Trade Representative Carla A. Hills on how Japan protects its $6 billion public-sector computer market from imports. The normally unflappable Hills branded the situation "outrageous," say the participants.
And during President Bush's January visit to Asia, Hills and her aides kept in contact with the CSPP's point man, Apple Computer Inc. Chairman John Sculley, and used the group's findings to wring concessions from Tokyo. On Jan. 10, Japan agreed to boost government purchases of U.S. computers by $2 billion a year. The CEOs' lobbying of Hills was critical, says Deputy U.S. Trade Representative Michael Moskow: "The data they brought with them was a powerful tool."
`FOOD FIGHT'? Whether the Japanese will actually buy more U.S. computers is uncertain--they have already backed away from a similar pledge on auto parts. But the CSPP's methods are definitely gaining attention within the Beltway. "They appear to be having a great deal of impact," says William Krist, vice-president of the American Electronics Assn. (AEA), an umbrella trade group. And that impact is being felt without the usual publicity grab or harsh rhetoric. The CSPP's most effective tactic has been putting its CEOs in direct contact with government officials.
It wasn't until 1989 that those executives realized they needed a group of their own in Washington. Before then, they had relied on groups such as the AEA. As a result, their wishes--mainly for an uninterrupted supply of cheap components--were not reflected in the 1986 negotiations with Japan over semiconductor trade. The resulting pact, designed to combat dumping, created a chip shortage that drove up prices and squeezed computer makers' margins.
By 1991, when the accord came up for renewal, computer makers had formed the CSPP at the urging of IBM's John F. Akers, Hewlett-Packard's John A. Young, and Tandem Computers' James G. Treybig. When the CEO members convened for the first time, in December, 1989, at Washington's Hay-Adams Hotel, many were strangers. "We weren't sure these guys could have dinner together without having a food fight," recalls Marshall C. Phelps Jr., IBM's director of government relations.
Their talks still heat up. Last year, several members, including Akers, argued for more help for U.S. production of memory chips. Digital Equipment Corp. President Kenneth H. Olsen's retort, according to one witness: "You can grow palm trees in South Dakota, but it's not necessarily a good idea."
CHIPPING AWAY. For the most part, however, the coalition has stuck together, and that's paying off. In 1990, led by Compaq Computer Corp.'s then-CEO Joseph R. Canion, the CSPP squared off against the chipmakers, led by LSI Logic Corp. Chairman Wilfred J. Corrigan. Eventually, the chip group agreed to remove price curbs on Japanese memory chips, and the computer group agreed to back a demand for better access to Japanese markets. U.S. trade negotiators were thus able to reach a pact with Japan in May, 1991, two months before the old agreement was to expire. Had the two industries not united, says S. Linn Williams, a Deputy U.S. Trade Representative, "the Japanese would have exploited the split." Soon after, a chip trade group recognized Canion as its Man of the Year.
The CSPP also helped persuade Budget Director Richard G. Darman to emphasize software in the national computer-network project. That impressed Administration officials, because it ran counter to CSPP members' short-term interests in selling hardware. Indeed, the 1993 federal budget document lauds the CSPP for its recommendations.
Similarly, the CEOs' clout has helped shape an agreement with the Energy Dept. on speeding the transfer of technology from government to private research labs. CSPP members met with Energy Secretary James D. Watkins for an hour last October to hammer out a model licensing agreement, which will likely be made official in February.
The CSPP's next meeting is in June, when it will discuss a position on future antidumping actions. If the past is any indication, these high-profile CEOs will wield their influence--in a low-profile but effective way.