Edition: U.S. / Global

In Tokyo, States Compete for Plants and Jobs

Special to the New York Times
Published: January 17, 1988

Like a general marking his victories, Francis T. Vaughan pointed to the map of New York State hanging on the wall of his office in downtown Tokyo. It was covered with red dots - several clustered on Long Island, two near Elmira, others scattered throughout the state.

The dots represent Japanese companies in New York, and as director of the Far East office of the state's Department of Commerce, Mr. Vaughan is responsible for increasing their number.

With more Japanese companies investing in the United States because of the strong yen and fears of protectionism, states, and even entire regions, are waging a quiet war to lure Japanese businesses. Thirty-three states and four port authorities have offices in Tokyo for this purpose, the most recent being New Jersey, which opened an office in November. Stiff Competition

Many labor-intensive industries relocate to Southeast Asia, where wages are relatively low, but companies dependent on technology increasingly want to set up shop in the United States, often so they can be near their largest market.

New York has done well, attracting 183 companies in the past 13 years, second only to California's 472, according to the Japan External Trade Organization, an arm of the Japanese Ministry of International Trade and Industry. More than 20,000 New Yorkers are employed by 800 Japanese companies that have factories or offices in the state.

But New York faces stiff competition from its neighbors, and the metropolitan region is having a tough time with Southeastern states like Georgia.

''We're all competing for the same customers,'' Mr. Vaughan said. ''I can easily count on my fingers the ones I've lost.''

Still, in each of the last two years, New York State has managed to bring in about six Japanese manufacturing plants, as well as offices.

The managing director of the Tokyo office of New Jersey's Department of Commerce and Economic Development, Edouard Saubolle, said he was already negotiating with three Japanese companies in an effort to have them set up factories or distribution centers in his state. Fujiya Yamagata, Connecticut's representative in Asia, said about 10 Japanese concerns have moved to the state since his office opened two years ago. Criticism Over Incentives

''It's good for states to get these companies in here,'' Mr. Saubolle said, ''because not only do they create jobs, but they pay taxes, contribute to the infrastructure and provide indirect jobs as well.''

Critics of the trade offices say Japanese companies receive unfair advantages because states sometimes offer them special incentives like tax breaks and low-interest loans. But state representatives in Tokyo reply that anything offered to the Japanese would also be offered to companies in the United States.

The question is, when does a state give away too much. Trade representatives here say they generally recoup their losses after a few years. Further economic development, they say, is spurred by these new jobs, which usually lead to other investments and still more jobs.

For instance, a New York State construction company, Bearsch Compeau Associates P.C., benefitted when Sanyo Shokai, Japan's largest coat manufacturer, decided to build a factory in Oneonta, about 60 miles west of Albany. Sanyo Shokai was tempted to use a Japanese construction company but hired a local company instead, said Yoshio Matsumoto, general manager of the company's international division. ''If we only used Japanese firms, our image would not be very good,'' he said. Experienced Workers

Before Sanyo Shokai executives settled on Oneonta for their plant site, they looked at 17 locations in several different states. They chose Oneonta primarily because Sanyo Shokai was able to hire experienced textile factory employees because a local plant was closing down.

The trade representatives spend a lot of time educating potential customers about their states. Mr. Yamagata said most Japanese are unfamiliar with Connecticut, and Mr. Vaughan said he tries to show Japanese that there is more to New York than New York City.

Mr. Vaughan talks about New York's long history of manufacturing and about its educated work force and tries to allay Japanese companies' fears of strong labor unions and crime.

Mr. Saubolle sells New Jersey by emphasizing that, from there, 25 percent of the United States population is within 24 hours by car and that it is near New York City but does not have New York's crime rate or high taxes. 'Sunbelt Sickness'

Mr. Yamagata tells the Japanese that Connecticut is attractive because of its highly skilled labor force, lower taxes and pleasant living environment.

All the state offices have glossy booklets written in Japanese. But this is not always enough. One of the most popular locations for Japanese industry, to the regret of the metropolitan area, is the Southeast.

''Japanese companies have Sunbelt sickness,'' said Mr. Vaughan. ''We are rather envious of those guys from states like Georgia.''

The envy is understandable. Gerald Yingling, director of the Tokyo office of Georgia's Department of Industry and Trade, said he had 51 potential investment projects sitting on his desk. ''The Georgia office has gone from about four to five projects per month two years ago to about 20 per month,'' Mr. Yingling added. ''I probably lose some because I can't devote enough time to them all.''

Part of the reason the South is so appealing to Japanese is that wages are lower and unions are rare. But Mr. Vaughan is not easily discouraged.

''I tell the Japanese that New York has I.B.M., Kodak and Grumman - all companies with lots of employees,'' he said. ''If New York is good enough for them, then it's good enough for anybody.''