FOR IMMEDIATE RELEASE:                  NIST 95-05
Feb. 3, 1995

Contact:  Jan Kosko                     QUALITY MANAGEMENT
          (301) 975-2767                PROVES TO BE A SOUND
                                        INVESTMENT, SAYS NIST


     The Commerce Department's National Institute of Standards
and Technology said today that investing in quality management
can result in an impressive payoff.

     NIST "invested" a hypothetical $1,000 in each of the five
publicly traded, whole company winners of the Malcolm Baldrige
National Quality Award and the parent companies of seven
subsidiary winners.  The success of the investment was tracked
from the first business day in April of the year they won the
award (or the date they went public) to Oct. 3, 1994.
Adjustments were made for stock splits and/or stock dividends.
Another hypothetical $1,000 was invested in the Standard & Poor's
500 at the same time.

    NIST found that the five whole company winners--Eastman
Chemical Co., Federal Express Corp., Motorola Inc., Solectron
Corp. and Zytec Corp.--outperformed the S&P 500 by 6.5 to 1,
a 188 percent return on investment compared to a 28 percent
return for the S&P 500.

     A hypothetical $1,000 also was invested in seven publicly
traded parent companies--Westinghouse Electric Corp., Xerox
Corp., General Motors, IBM, AT&T and Texas Instruments--of
subsidiaries that had won, and the five whole company winners. 
The result was a 92 percent return on investment, compared to a
33 percent return for the S&P 500.  All together these companies
outperformed the S&P 500 by almost 3 to 1.  Other independent
studies have shown similar results. 

     The winning subsidiaries are:  Westinghouse's Commercial
Nuclear Fuel Division; Xerox Business Products and Systems; GM's
Cadillac Motor Car Division; IBM Rochester; two of AT&T's winning
units--Network Systems Group/Transmission Systems Business Unit
and Universal Card Services; and Texas Instrument's Defense
Systems & Electronics Group.

     In addition, NIST invested a hypothetical $1,000 in the
publicly traded Baldrige Award applicants receiving site visits
during 1990 through 1993.  As with the other companies, the
investment period began the first business day in April of the
year the companies were site-visited or the date they went
public.  The eight whole company applicants outperformed the S&P
500 by 4.5 to 1.  As a group of 32, which includes the whole-
company applicants and the parent companies of subsidiary
applicants, they outperformed the S&P 500 by 2 to 1.  (Names of
applicant companies are kept confidential.)  

     Says Curt W. Reimann, director of the Baldrige award program
at NIST, "This review adds to the mounting evidence that, done
right, quality management can lead to outstanding returns in many
business areas, including financial performance, satisfied
customers and improved market share." 

     While quality management cannot guarantee success, Baldrige
award winners report many improvements as a result of investing
in quality management.  For example,

o    According to Ko Nishimura, president and chief executive
     officer of Solectron Corp., "We continue to use the Malcolm
     Baldrige National Quality Award criteria even after winning
     the award in 1991.  These criteria have helped us build a
     quality company and return substantial value to our
     shareholders."  Adds Nishimura, "From 1989 to 1994, sales
     have increased from $130 million to $1.457 billion, net
     profit has increased from $4 million to $56 million,
     Solectron's stock price has had an average growth of 
     82 percent per year, and the number of customer awards for
     quality and service has increased from 14 to 63."

o    Another 1991 winner, Marlow Industries, reports that through
     the Baldrige criteria, it has developed a wide variety of
     quality tools and a quality system that has resulted in
     successful penetration of new markets and a sales increase
     of 35 percent for 1994.

o    For 1992 winner, Ritz-Carlton Hotel Co., quality management
     has helped the company eliminate $75 million in waste
     through project improvements.  

o    A 1993 winner, Ames Rubber Corp., reports that through
     sharing total quality management techniques, its suppliers
     have achieved a 99.9 percent quality and on-time delivery
     status. 

o    Cumulative manufacturing cost savings at Motorola, a 1988
     winner, for the years 1987 through the second quarter of
     1994 were over $5.5 billion.

     Other reports also show that "quality pays."  In a 1991
study of 20 U.S. companies, the U.S. General Accounting Office
found that "in nearly all cases, companies that used total
quality management practices achieved better employee relations,
higher productivity, greater customer satisfaction, increased
market share, and improved profitability."

     A more recent report by The Conference Board says, "A
majority of large U.S. firms have used the criteria of the
Malcolm Baldrige National Quality Award for self-improvement, and
the evidence suggests a long-term link between use of the
Baldrige criteria and improved business performance."

     In conjunction with the private sector, NIST developed and
manages the award program.  A non-regulatory agency of the
Commerce Department's Technology Administration, NIST promotes
U.S. economic growth by working with industry to develop and
apply technology, measurements and standards.  NIST was selected
by Congress to design and manage the award program because of its
role in helping U.S. companies compete, its world-renowned
expertise in quality control and assurance and its reputation as
an impartial third party.

                                  - 30 -

(Note to editors:  Attached is a chart with more details on
NIST's hypothetical stock investments and a fact sheet on the
Malcolm Baldrige National Quality Award.)