When I was young, the quality of
Japanese merchandise was so poor that many consumers began to boycott
Japanese goods. Consumer groups warned that, although these shoddy
goods were cheap, they were actually poor value for money because they
lasted only one-fifth as long as products costing only twice as much.
Eventually the spontaneous consumer rebuff of poor quality worked:
Japanese manufacturers were starved and shamed into improving the
quality of their practices and components, and now have a reputation
for high quality.
But how soon we forget. We are now barraged with cheaply made, poor
quality products and services from both domestic and third world
suppliers, and this time we appear a lot more timid about objecting to
it, and about demanding better.
To understand what's behind this (no, it's not a conspiracy) we need to
appreciate the economics that produce this declining quality in today's
global, oligopolistic marketplace:
- Most large corporations are public companies trading at huge, almost unprecedented price/earnings multiples.
- The shareholders (that's us!) demand that management take
all necessary action to keep these prices up, and take them even higher.
- This means profits need to continue to rise annually (and unrealistically) by double-digit amounts.
- Companies have done this by broadening markets and by
squeezing suppliers to lower their prices. They have maxed out this
mechanism of growing profits.
- Then they exploited record-low interest rates to 'leverage'
profits, borrowing at record levels and using the proceeds to buy out
competitors and redeem their own shares, hence artificially increasing
per-share profits. They've also maxed this out, and are now hugely
vulnerable to interest-rate spikes.
- Then they squeezed domestic labour, defaming and crippling
unions and threatening layoffs to force longer hours and push wage
rates below the current record-low inflation levels. In some case they
have effectively decreased wages by laying off senior workers and
hiring cheaper, younger replacements. This technique, too, has been
maxed out.
- Then they started giving out more of their wages as share
options, which, because of their fierce lobbying of the government and
accounting industry, they are not legally required to treat as
expenses, which further artificially inflates reported profits.
- More recently they've been buying out competitors and using
their oligopoly power to raise margins, effectively gouging consumers.
This has been done in various subtle and underhanded ways, such as
replacing a product with an inferior product, downgrading warrantees,
worsening service, and reducing the amount of product you receive in a
package without notification (deceptive packaging).
- And of course more recently still they've been outsourcing
and offshoring manufacturing, service and support to businesses, mostly
in the third world, which have execrable social (labour) and
environmental standards, and poor production quality standards.
Inevitably this has resulted in much lower product quality, poor or
non-existent service, less value for money, domestic unemployment, and
unwanted garbage. But it's happened so slowly that you probably haven't
noticed that as large corporations have been lowering their standards, they've gradually coerced you into lowering yours
as well. Anyone who blows the whistle on this fraud (that's exactly
what it is -- an intentional deception of consumers) is sued by an army
of corporate lawyers (as in the famous Nike case where that company
sued for the right to lie to consumers about its sweatshops, and the
pending Suzuki case where Consumers' Union has been sued for reporting
safety defects on Suzuki SUVs). Anyone who tries to get around this
high-price, low-quality quandary by creating their own markets
(knock-offs and file-swappers for example) is also sued. And all
because the management of these companies are constantly forced by
greedy shareholders (that's us!) to use any method at their disposal, whatever the consequences, to increase profits by utterly-unsustainable double-digit amounts every year. Sound like a 'bubble' to you?
Here are just a few examples:
- I've been told that the average life expectancy of Christmas lights is two years.
Most people upgrade to the 'newest thing' every year or two and simply
throw out their old lights anyway. Almost all this junk, including the
big 100-200 light figurines, is made in China, and the quality is
atrocious, but according to a retailer I spoke to, almost no one
returns defective bulbs and strings. It all just goes into our landfill
sites.
- Reality TV shows cost less than one-tenth as much as
quality dramas, but in most time slots they attract more than half the
audience of a drama and therefore command close to half the advertising
revenue. That's money in the bank for networks, and debased quality for
viewers. When I ask people why they don't just turn off the TV instead
of watching this crap, they tell me (a) they have it on as 'background
noise', (b) they multi-task with their computer or a book or music, so
they're not really watching,
or (c) they're broke so it's all they can afford to do. What's scary is
they say they wouldn't admit to the ratings services that they had it
on, which means the actual number of viewers is probably even higher. Talk about imaginative failure.
- Most small electrical appliances have dismal repair records, and even Consumer Reports
admits that it's uneconomical to get them repaired. Phones, CD players,
irons and kitchen appliances like blenders are among the worst
offenders.
- Outdoor seasonal products -- shovels, sleds, sprinklers,
gardening tools etc. -- are "only designed to last one season", I was
told by a neighbourhood retailer. Customers "just won't pay twice as
much for a metal tool with a 10-year life as one that will probably
break in a year", he said, and "even if there's a 1, 2 or 5 year
warrantee on seasonal goods, people don't keep their receipts, so they
don't return things".
- The big ticket items with the worst repair records, according to Consumer Reports,
are laptop computers and lawn tractors. The magazine cites the
exceptionally poor service from the tiny handful of companies that
control both these consumer product industries, and their inability to
get repairs right the first time. My Dell story will be coming up in a
few days.
- The latest way of discouraging customers who demand fair
treatment is the 'runaround'. This game can be played on the phone, as
AT&T did with its recent phony billing scam, or in person, when
each of two, three or four parties points you in a circle to the other
-- parts, service, the manufacturer, the installer, the outsourced
delivery service, the 'customer care' department that is 'not
authorized' to do anything for you or to refer you to anyone higher up
etc. The objective is to wear you down by using a bunch of low-paid
lackeys, and it usually works.
- Almost all of the suppliers to the upcoming Olympic Games
use sweatshops and similar irresponsible methods to cut costs (and the
quality shows). Despite a fierce and coordinated program called PlayFair
to get them to clean up their act, they are universally unrepentant, so
you can expect to see the brand names of some of the worst social and
environmental offenders on the planet flashed in your face constantly
during the Olympics, and adorning the 'honoured' athletes' attire.
- Yesterday two large breweries, Molson and Adolph Coors,
decided to merge to 'increase efficiency'. They're both profitable, but
they're in a saturated market, so to keep profits growing (and
shareholders happy) they'll need to fire lots of now-redundant workers.
The irony is that when the other large Canadian brewery, Labatt, was
sold two years ago to the Belgians (for the same reason as yesterday's
merger), Molson built its success on rebranding itself around the 'I am Canadian'
slogan (pictured above), and wrapped itself in the flag with
award-winning commercials that proudly showed how Canadians were
different from Americans. But, hey, what's a slap in the face to the
consumer if it keeps shareholders happy? And none of a sample of
Canadian beer drinkers surveyed by the media immediately after the
announcement got the irony. *sigh*
As consumers, we can either wait for the bubble to burst, and the stock
market to move down to more reasonable levels (taking half of our
savings with it, alas), or we can start raising our standards and
refuse to put up with this crap. What are some of the things we can do
(without being sued)?
- Send or take stuff back -- most people find it easier, and
less intimidating, to just buy another brand instead of returning
something relatively inexpensive. This lets the manufacturer of junk
off the hook. And keep all your receipts in an accordion file with a
brief note what each item on the invoice is and how long it's
warranteed for.
- Write letters of complaint. It takes a bit of research to
find who and where to write to, but people who do it usually get a
response, and if enough people complain it might just make a
difference. And when you do write, keep your cool -- hystrionics,
exaggeration and profanity will get you nowhere.
- Buy less, higher quality stuff. In the long run, you save
that way, and this was the method that ultimately improved the quality
of Japanese products. Research the quality and repair records, and the
vendors' records of corporate responsibility, for alternative brands
before you buy.
- Ask questions. If the retailer doesn't carry a quality
brand, or doesn't carry a domestically-made or local or organic brand
that you know exists, ask them why not. Invest the time and follow the
shuffle until you reach the level where someone can actually answer
your question. So few people bother to do this you might be surprised:
They might order the product you want in, or give you a credible reason
why they can't.
- Communicate with other consumers. Make a list of brands and products and suppliers that have proven to be high quality, and a Boycott List
of those that haven't. Share it with friends, family, neighbours.
Answer surveys about quality, especially independent ones from
trustworthy independent consumer organizations -- but be fair.
- Refuse to watch cheaply-made, low-quality TV programs and
movies that pander to an uncritical audience. There are much better
uses for your time and money. Ultimately in the price of the
advertisers' products, you're paying for this drivel.
- Defer your purchases. Even at the grocery store, never buy
anything on impulse, even if it's on sale. You'll usually regret your
impulse buys, and if you don't, the stuff will still be there next time
(and probably still on sale). How many times have you bought a CD or
DVD that you've only ever listened to/watched once?
- Many, perhaps most of the magazines you see on the racks
are paid for by advertising, and are full of it. They are essentially
advertising flyers with a few, poor quality articles thrown in to make
them look like legitimate reading material. Don't pay for advertising.
Buy a book instead.
- Learn how to fix things instead of throwing them out. Or save money by buying and upgrading something used.
- And of course, support local small companies that have to be responsive to consumers or they'll be out of business.
Corporations won't raise their standards until and unless we raise
ours. And they won't take responsibility if we don't. We're being
inundated with messages to make our voice count in the ballot booth
this year. We need to make it count in the corporate boardrooms and
shopping malls as well. The best way to do that is to teach them what
we taught the Japanese -- that we won't buy junk at any price. We have our standards. It's time to live up to them. Just do it? Just don't buy it.
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MADE IN CANADA
trust your
instincts 
