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Toshiba's Man in Irvine Polishes a Tarnished Image

November 09, 1987

John Rehfeld has worn many hats during his 25 years in the computer industry: IBM engineer , director of ITT Corp.'s data processing operations , founder of his own software firm and head of Japanese and Pacific operations for an East Coast-based computer industry consulting firm.

Today, the 47-year-old Rehfeld is vice president and general manager of Toshiba America's Information Systems Division. The Irvine-based division employs 200 of Toshiba America's 500 Orange County workers and is a unit of Toshiba Corp., the Japanese electronics giant. The Information Systems Division, with 1986 sales of about $450 million, manufactures personal computers, printers and other electronic components at its Irvine plant.

Under Rehfeld's leadership, Toshiba has staked out a dominant position in the fast-growing market for so-called laptop computers--small, lightweight machines that are popular with business executives, sales people and journalists.

Rehfeld, who lives in Tustin with his wife and four children, reads, skis and plays tennis and golf for relaxation. He is a frequent traveler to the Far East. He is particularly knowledgeable about Japanese business practices and the U.S.-Japanese race for technological leadership and has published several articles on the Japanese electronics industry.

Toshiba, whose U.S. sales totaled $2.6 billion of its worldwide revenues of $22 billion in 1986, has been in the public eye a lot lately.

After it was revealed that a Toshiba subsidiary made illegal sales of high-tech milling machinery to the Soviet Union, an angry U.S. Congress proposed a ban on Toshiba's imports to the United States. The ban is part of a pending foreign trade bill.

An earlier blow came in April, when the Reagan Administration slapped trade sanctions on certain Japanese electronics products--including small computers such as Toshiba's laptop computers--in retaliation for unfair trade practices by Japan.

Although administration officials have said that Reagan plans to lift some of the sanctions, it is not yet clear whether Toshiba's laptop computers will be unfettered.

In a recent interview at his Irvine offices, Rehfeld talked with Times staff writer David Olmos about the electronics industry, his company's plans in Orange County and the recent controversy involving Toshiba.

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Q: A lot has been written about the U.S. electronics industry losing the race with the Japanese. Do you agree that America is behind?

A: The Japanese got into the worldwide electronics industry . . . with low-cost manufacturing. They essentially took products and made them at a lower cost. Then they started to add a quality component. They gained their market share with a low-cost, quality component. The NIC (newly industrialized) countries--such as Korea, Taiwan, Hong Kong and Singapore--are doing that very well now, so Japan has had to add another element of value. And the value they're adding now is heavy research and development. They've done this in consumer electronics, and they're now doing it in industrial electronics. They've gained major R&D leadership in many basic component areas, such as semiconductors, flat-screen displays, optical disk storage and in floppy disk and some hard-disk areas. I could go on and on, longer than you'd want to hear. Looking back, it's almost like the Japanese had a master strategic plan for gaining leadership in very critical technology areas. That leadership is going to be very hard for the American or NIC countries to overcome.

Q: What are the ramifications for U.S. business of this Japanese prowess?

A: American business will have a very hard time gaining leadership in some of these areas, like facsimile or optical storage technology. But American business should understand the importance of these areas, and perhaps form strategic partnerships with the Japanese companies. That way, American business can have access to these technologies and U.S. companies can then add their own innovations to those areas.

Q: In which areas of the electronics industry are U.S. companies stronger than the Japanese?

A: They're strong in the personal computer and software industries; some areas of data storage; systems integration, and computer work stations.

Q: You've worked for both U.S. and Japanese companies. What do you find different about working for the Japanese?

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