NTT Says ‘Sloppy Work’ Went Into U.S. Products

TOKYO —  The president of Nippon Telegraph & Telephone said Monday that many U.S. high-technology products bought by his firm have been found to have defects caused by “sloppy work” on assembly lines.

The defects, Hisashi Shinto told a group of foreign correspondents here, “appear to be a result of step-by-step quality control not being carried out.”

Shinto, however, praised American firms for being “very enthusiastic about correcting their defects--even to the point of suffering losses on their sales.” And he said that NTT, Japan’s newly privatized telephone company, will continue to try to buy advanced technological equipment from American telecommunications makers.

But the NTT president again rejected a U.S. demand that the company guarantee that it will buy more U.S. products, saying, “I have the responsibility to select equipment of the best quality at the best price. That is the only rule.”

$140 Million in Imports

In fiscal 1984, which ended March 31, NTT bought $140 million worth of foreign equipment. Ichio Kata, the firm’s chief procurement executive, said that figure amounted to 4% of NTT’s overall procurement of $3.2 billion and 6% of the telecommunications equipment that the company bought during the year.

U.S. officials have threatened to break off a U.S.-Japan government procurement agreement, which still applies to NTT, if the phone company fails to increase its purchases of American equipment.

The strong dollar “is almost the only reason” NTT has not bought more American products, “especially mass-produced products,” Shinto said.

He urged the U.S. government to gradually lower the dollar’s value and predicted that that action, combined with a recent Japanese government decision to abolish tariffs on telecommunications equipment imports next April 1, would have the effect of increasing NTT purchases from U.S. firms.

On another matter, Shinto declared that he is personally opposed to his firm’s continuing to participate in the Japanese government’s development of communications satellites.

Ban on Foreign Satellites

The government, in effect, has forbidden NTT to purchase foreign-made satellites, although it has approved foreign purchases by other companies entering the primary telecommunications business in competition with NTT. At least two, and possibly three, of the new firms plan to buy American satellites.

Noting that NTT had joined development of Japan’s third-generation communications satellite, dubbed the CS-3, four years ago--before NTT was transformed into a private company last April 1--Shinto said American criticism of NTT for not buying U.S.-built satellites is out of order.

“If we continue (to participate in government development of communications satellites) after the CS-3 is launched (in 1988), you can criticize us then,” he said.