Another possible explanation for the Big Three's failure: if I recall correctly, Who Killed the Electric Car mentioned that GM didn't like their electric model because it didn't have as many moving parts and so it wouldn't break down as much, thereby meaning GM and its suppliers would sell fewer replacement parts for repairs. If your business model involves making products that are supposed to break down, that's a good way to piss your customers off.
-WD
^^^^^^
CB: Maybe WD is onto something ! Story goes that GM invented planned obsolescence back in the 1920's. Maybe the Big Three are unable to overcome that fundamental policy, whereas the Japanese manufacturers are not as bound to it.
Planned obsolescence
>From Wikipedia, the free encyclopedia
Planned obsolescence (also built-in obsolescence (UK)) is the decision on the part of a manufacturer to produce a consumer product that will become obsolete and/or non-functional in a defined time frame. Planned obsolescence has potential benefits for a producer in that it means a consumer cannot just buy a product once and never have to buy again - the life of the product's usefulness or functionality is fixed, so that at some point the consumer must purchase again, whether returning to the original manufacturer for a newer model, or buying from the competition. For an industry, it stimulates demand in the marketplace by ensuring a customer must come back into a buying mode sooner than had the product been built to last longer or indefinitely. It exists in many different products from vehicles to lightbulbs, from buildings to software. There is, however, the potential backlash of consumers that become aware of such obsolescence; such consumers can shed their loyalty and buy from a company that caters to their desire for a more durable product.
Planned obsolescence was first developed in the 1920s and 1930s when mass production had opened every minute aspect of the production process to exacting analysis.
Estimates of planned obsolescence can influence a company's decisions about product engineering. Therefore the company can use the least expensive components that satisfy product lifetime projections. Such decisions are part of a broader discipline known as value engineering.
Contents [hide] 1 Types of obsolescence 1.1 Technical or functional obsolescence 1.2 Style obsolescence 2 Economics of planned obsolescence 3 Origins of the term 4 References 5 See also 6 External links
[edit] Types of obsolescence
[edit] Technical or functional obsolescence The design of most consumer products includes an expected average lifetime permeating all stages of development. For instance, no auto-parts maker would run the extra cost of ensuring a part lasts for forty years if few cars spend more than five years on the road. Thus, it must be decided early in the design of a complex product how long it is designed to last so that each component can be made to those specifications.
Planned obsolescence is made more likely by making the cost of repairs comparable to the replacement cost, or by refusing to provide service or parts any longer. A product might even never have been serviceable. For instance Microsoft no longer provides customer support for Windows 98, creating a greater incentive to buy other versions of Windows.
Creating new lines of products that do not interoperate with older products can also make an older model quickly obsolete, forcing replacement.
[edit] Style obsolescence Marketing may be driven primarily by aesthetic design. Product categories where this is the case display a fashion cycle. By continually introducing new designs and retargeting or discontinuing others, a manufacturer can "ride the fashion cycle." Examples of such product categories include automobiles (style obsolescence), with a strict yearly schedule of new models, and the almost entirely style-driven clothing industry (riding the fashion cycle) and the mobile phone industries with constant minor feature 'enhancements' and restyling.
[edit] Economics of planned obsolescence Planned obsolescence tends to work best when a producer has at least an oligopoly. Before introducing a planned obsolescence the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence, there is an information gap between the producer, who knows how long the product was designed to last, and the consumer, who does not. When a market becomes more competitive, product lifespans tend to increase. When Japanese and European vehicles with longer lifespans entered the American market in the 1960s and 1970s, the American carmakers were forced to respond by building more durable products.[citation needed]
However, there are some industries where there is significant competition and consumers have chosen to go for products that will fail more quickly anyway. Some consumers are also perfectly content with planned obsolescence. The buildings housing suburban big-box stores such as Wal-Mart and Home Depot are not built to last any longer than twenty-five years[citation needed]. In this instance the retailers want the cheapest buildings possible. Stores are relocated or redesigned often enough that a longer lifespan would be useless to the storeowner.
Even in a situation where planned obsolescence is appealing to both producer and consumer there can also be significant harm to society in the form of negative externalities. Continuously replacing, rather than repairing products, creates more waste, pollution, and uses more natural resources.
Others have defended planned obsolescence as a necessary driving force behind innovation and economic growth. Many products, such as DVDs, become both cheaper and more useful the more people have them. Planned obsolescence will also tend to benefit those companies with the most modern and up-to-date products, thus encouraging extra investment in research and development that often has large positive externalities.
[edit] Origins of the term Origins of "planned obsolescence" go back as far as 1932 (possibly further) with Bernard London's Ending the Depression Through Planned Obsolescence. However, the phrase was first popularized by Brooks Stevens, the American industrial designer, in 1954. Stevens was due to give a talk at an advertising conference in Minneapolis in 1954. Without giving it much thought he used the term as the title of his talk. [1] From that point on, the phrase "Planned Obsolescence" became Stevens' catchphrase. By his definition, planned obsolescence was, "Instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary." [2]
Stevens' term Planned Obsolescence was taken up by other people, and his own definition was challenged. By the late 50s, "planned obsolescence" had become a commonly used term for products designed to break easily or to quickly go out of style. In fact, the concept was so widely recognized that, in 1959, Volkswagen mocked it in a now-legendary advertising compaign. While acknowledging the widespread use to planned obsolescence among automobile manufacturers, Volkswagen pitched itself as an alternative. "We do not believe in planned obsolescence," the ads suggested. "We don't change a car for the sake of change."[3]
In 1960, cultural critic Vance Packard had a book published called "The Waste Makers," promoted as an exposé of "the systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals."[4]
Packard divided Planned Obsolescence into two sub categories: obsolescence of desirability and obsolescence of function. "Obsolescence of desirability," also called "psychological obsolescence," referred to marketers' attempts to wear a product out in the owner's mind. [5] Vance Packard quoted industrial designer George Nelson, who wrote: "Design... is an attempt to make a contribution through change. When no contribution is made or can be made, the only process available for giving the illusion of change is 'syling.' "[6]
[edit] References ^ "Industrial Strenth Design: How Brooks Stevens Shaped Your World," Milkwaukee Art Museum, June 7 - Sept. 7, 2003 ^ [http://www.mam.org/exhibitions/_sites/brooks/biography.asp "Industrial Strenth Design: How Brooks Stevens Shaped Your World," Milkwaukee Art Museum, June 7 - Sept. 7, 2003 ^ See [Thomas Frank], The Conquest of Cool: Business Culture, Counterculture, and the Rise of Hip Consumerism, (University of Chicago Press, 1997); Randall Rothenberg, Where the Suckers Moon: The Life and Death of an Advertising Campaign, Vintage, 1994; and Lawrence Dobrow, When Advertising Tried Harder: The Sixties: The Golden Age of American Advertising (Wh Smith Pub, 1984). ^ Quote taken from back jacket copy of Packard, Vance, The Waste Makers, New York, Pocket Books (Simon and Schuster), 1960. ^ Waste Makers, p. 58 ^ Waste Makers, p. 59