Selling on the New Frontiers

By Marshall Loeb

As the new year begins, moviemaking time has come again to Sperry Rand Corp. Up before the cameras steps Chairman Jean Paul Lyet, 61 . He is an accountant who rose out of a brass-knuckle neighborhood of North Philadelphia to become chief of a $4-billion-a-year multinational that sells products from rather simple gyrocompasses to complex Univac computers. And now, the boss is filming his annual report to 89,000 employees round the world.

Paul Lyet (pronounced lee-ay) is a plain-spoken fellow, but when he talks to the troops about tomorrow's opportunities he takes on the fervor, if not the glamour, of George C. Scott playing Patton. Sperry expects the 1980s to be an era of tremendous growth, nourished by technology just beginning to emerge from the labs. In five years, computers will be at least twice as fast and capacious as they are today; new airline navigation projects will make travel much safer. Most important, says Lyet, there is large opportunity, fed by need, for U.S. companies to expand exports.

Wise Europeans have long had a philosophy of export or die. Now, with its trade deficit so enormous, the U.S. should adopt such a philosophy. "But a large body of American industry is still very provincial," says Lyet. "The American businessman, who has a tremendous domestic market, is often not attracted to the never-never land of foreign markets."

Lyet calls for new thinking, and not only from those provincial business types. Government trustbusters, he feels, should consider permitting U.S. companies to set up international consortiums to compete against similar groupings that are allowed by foreign governments. Unions should not buck investments abroad by multinational corporations but should recognize that they enhance exports--and create jobs domestically--because the new foreign branches inevitably demand large amounts of parts from the U.S.

The surest way to expand exports, says he, is to sell more to the developing countries. "The new frontiers, the fastest-growing markets are there. We are in a helluva struggle with the Germans, the Japanese and others for those markets. We desperately need the minerals and the resources of the developing countries. We need to find new forms of enterprise, new methods of operating, some innovative approaches that will answer their needs as well as our needs."

One innovative approach would be for multinationals to set up outposts in developing lands that would be 51% or more owned by local people or governments. Giving them a majority stake would diminish the danger of expropriation. Sperry has set up such joint ventures in many countries, and it has learned that to demand majority ownership is, in Lyet's words, "a very outdated, obtuse approach." If a company supplies the technology and the marketing expertness, it has effective control even if it does not own most of the stock.

If anyone doubts the potential for export, let him consider the case of China. Not long ago, that market seemed hermetically closed. Now Western businessmen dream of selling just one handkerchief to each of the 1 billion Chinese; that would be enough to keep two or more big textile plants rolling for a year. Lyet got onto that new frontier rather early. He visited the Middle Kingdom more than a year ago, and soon thereafter Peking placed with Sperry one of its first significant orders for Western computers.

And if anyone doubts that today's obvious problems are neither unique nor insurmountable, let him join Lyet on one of his frequent visits to the 19th century world of Manhattan's University Club, an architectural gem on Fifth Avenue. In a plastic case under a high-vaulted ceiling is a copy of the New York Tribune, opened to the same day of the same month 100 years ago. Lyet is always reassured to read that the worries of 1879 have a familiar ring. "There were problems with international relations. Somebody was always threatening somebody else. And people were getting mugged on 88th Street."

So when he hears that the U.S. is surrounded by problems, Lyet likes to recall the old line about what French generals say when informed that their armies are surrounded: "Wonderful! This means we can attack in any direction."

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