Monday, May 14, 2007

Look Who Won the War

The offloading of red-ink bleeding Chrysler by Mercedes-Benz automaker Daimler at a gigantic loss, on the heels of Toyota's displacement of General Motors as the top auto seller in the USA, is an odd outcome for an industry that was once indisputably American-led. Did Germany and Japan ultimately win World War II?

Halting my own German-made car at a stop light, I count the vehicles around me by provenance and it's not hard to reach that conclusion.

The least mysterious element is how this situation came to be. It could not be expected that Europe and Japan would wallow in ruins for generations, nor that American-made cars would continue to make up 69 percent of all autos made worldwide -- as was true in 1968 -- forever.

The underpinnings of the lifestyle that permitted someone who did no more than apply bolts to a machine all day to send children to the very expensive higher education in the United States was bound to end. Indeed, American automakers went from making the best cars to making the cars most predictably doomed to fall apart.

"Planned obsolescence" was popularized starting in 1954 by American industrial designer Brook Stevens, the idea being that goods could be made in such a way that they would need to be replaced within a certain span of time, thus forcing the consumer to buy it again and again. The idea came from British economist Bernard London, who in 1932 proposed that planned obsolescence would be a way to stimulate consumption and end the Great Depression, which devastated the UK as much as the USA.

Planned obsolescence works best with a monopoly (Microsoft and its treatment of users with what it deems to be "old" software). It also works with an oligopoly, a market or industry dominated by a few sellers.

The oligopoly was the prevailing structure of American industry from the 1950s to the 1980s, when the Reagan Administration deregulated everything. Autos? Chrysler, Ford, GM. TV? ABC, NBC, CBS. Cereals? Kellogg, General Foods, Post. And so on ...

Are we better off having to buy our own telephones from companies that obfuscate the options, having to choose between competing local and long distance companies? Wasn't there a certain stability and certainty in knowing that when we moved the phone would be there before the furniture?

What's next: brands of oxygen? I was going to say water, but that is now sold, expensively and anti-ecologically.

And what about Germany and Japan? They have oligopolies, too. Autos? Bundes Motor Werke (BMW), Daimler and Volkswagen. (Himself rode in Benzes and VW bugs, just check the pictures from the 1930s.) Or Toyota, Mitsubishi and Nissan.

The Germans and Japanese had two comparative advantages. Both stem from what Leon Trotsky called, in another context, the relative advantage of underdevelopment. First, their industrial base was wiped out by 1945 so that for the past half-century, they've been working in plants that are 30 or 40 years newer than ours. Secondly, and this is truer of the Japan than Germany, their small internal market meant focusing outward -- and, until Europe fully unifies or China emerges, there is no larger single internal market than that of the United States.

They set out to conquer by listening to consumer demand, while American auto executives turned a deaf ear to the market. All German and Japanese businessmen learned to speak English, not just in translation, but the American cultural idiom. You would be hard-pressed to find Japanese-speaking U.S. executives and few speak even German.

American companies export products with the Americanizing idea. Blue-jeans sell youths U.S. hipness in France. Toyota does the reverse. They Americanized to suit the market. They even put plants here.

That's how German and Japanese automakers beat American competitors, both in timeliness and intensity of response, when Americans switched from the showboats with fins to low-gas-mileage compacts. Today, even the South Koreans (KIA) are first in the U.S. market with hybrids and high-mileage cars.

Buying an American car today is a singular act of stupidity. In a couple of years it will need huge repairs, in four or five it will need to be discarded.

I have a 17-year-old German car that may well last another 17; yet it draws oohs and ahhs from men and women alike. Although I really purchased it for its sturdiness and solid engineering. Could you say the same for anything coming out of Detroit?

Yet even German carmakers are Americanizing. The most recent model Mercedes will display, alongside the oil pressure gauge, the song a plugged-in iPod is playing. From what I hear on e-mail lists, all these electronics are making Benzes subject to the sort of recurrent breakdowns that plague American cars.

Are the Japanese next?

I suspect redemption, or at least an entirely new paradigm, will come with the next great global battle: against the effects of industrial depredation of the environment. Collective survival will force redesign of the combustion engine and a massive shift to a cleaner, probably still unknown, fuel.

Are we Americans capable of rising to the challenge? Or have we, like the Romans once had, become too comfortable to be able to change?

1 comment:

Geneviève said...
This comment has been removed by the author.