A caption in some copies of today's pre-printed Business section contains incorrect information. The photo shows Commerce Secretary C. William Verity kissing his wife after being sworn in, with President Reagan looking on. (Published 11/15/87)

The new secretary of Commerce, C. William Verity, has decided that putting a strong emphasis on improving the quality of American products is the best contribution he can make in the waning period of the Reagan presidency.

Verity, a 70-year-old retired steel company executive, said that in every speech he and other top Commerce officials make, they will cite examples of companies that have improved their quality performance. The goal, he said, is to encourage other firms to do the same.

Verity said he also will try to elevate a presidential award named in honor of the man he succeeded, Malcolm Baldrige, into "the Academy Award of quality for American industry."

"When I first took the job, I sat down with a number of friends, including some former Commerce secretaries, to see what I could do in the next 14 months to help the president's program," Verity said last week in an interview.

He said that everyone agreed that the major problem facing the CommerceDepartment was the stubborn trade deficit, but that aside from continuing the administration's attack on unfair trade practices there was little he could do to make a special mark in that area. So he set a return to quality as one of the top priorities of his tenure in the Commerce Department.

Verity was President Reagan's choice for the job, which became vacant when Baldrige died last summer in a rodeo accident. Verity came to the president's attention early in the administration when he ran Reagan's private-sector initiative.

He was sworn into office a month ago after a minor confirmation battle in which conservative Republicans challenged his long-time support for increased trade with the Soviet Union. He has maintained a low profile since then, getting to know one of the largest departments in government. But he stepped into public view with a National Press Club speech Tuesday, the day before the interview. He is to speak Tuesday morning at the U.S. Chamber of Commerce's international forum.

In focusing on the quality of American products, Verity will be tackling what he sees as a major reason, along with the high dollar, for the United States getting "knocked out of the marketplace. Many people perceive American products are not as high-quality as foreign products. As a consequence, we've lost out."

The quality of American products has been the subject of a major debate in this country and overseas, involving both the basic competitiveness of the United States in world markets and the country's national pride.

The Japanese, for instance, continually question the quality of U.S.-made products, citing their failure to meet exacting Japanese standards as a major reason the United States has had trouble penetrating markets there. Many Americans, citing lapses in the highly vaunted Japanese quality, see that argument as another excuse by Japan for not buying foreign products.

But it was generally acknowledged that U.S. quality has slipped, especially in fields such as making autos and steel that were once dominated by the United States. That decline in quality drove many Americans to buy foreign goods and hurt U.S. sales overseas.

Now, however, there is a growing feeling that there has been a strong improvement in the quality of many U.S. products, including cars and steel, to the point that they are as good as or better than products made elsewhere.

But the perception problem remains, and Verity said he wants to put a spotlight on the improvement both to correct the image that American products no longer are as good as they used to be and to encourage U.S. companies to better their performance.

"Many U.S. companies have made the commitment to world-class quality and they are beginning to regain market share," Verity said in the Press Club speech. He also cited Hewlett-Packard Co. and Xerox Corp. as being "some of the winners."

"But there are still many companies that have not learned yet how to respond to this threat" of poor-quality products, he added.

He named Corning Glass Works as "a good example of a company that has surmounted {a} quality challenge." According to Verity, the company improved the quality of a device it invented for auto emission control after the firm almost lost U.S. car makers' business.

"A very determined Corning plant manager led a vigorous quality drive, reducing the error rate to 30 defects per million pieces made," Verity said. "This averages out to about one mistake per person every six weeks. The result: Corning has the U.S. business and now they sell to Japanese car manufacturers."

He said the same improvement in quality was made by a number of other U.S. companies, including Ford Motor Co., which produced two models last year that were judged best in their class, and firms in the steel industry that turned to Japanese companies to find out where they had gone wrong.

Verity said the department is trying to build up interest in the new Malcolm Baldrige National Quality Award. It will be given each year by the president to a company that has achieved major breakthroughs in quality. Verity said he would like to see it gain the prestige in the United States that a similar award has in Japan.

Ironically, the Japanese award is named for an American, W. Edwards Deming, who is little known in this country but is revered in Japan for establishing the principles of quality control that raised the standards of industrial products there.

Besides emphasizing quality, Verity said he wants to move federal programs that are better done by the private sector out of government.

"At the Commerce Department," he said in his Press Club speech, "we shall look into every chance to transfer functions to the private sector, and before adding any new federally funded programs we shall make the test to see if that function could be done by the private sector or in a public/private partnership.

"This will help us do all we can to trade tax costs for tax income."