Planned obsolescence

I have a good deal of respect for Mr Alfred P Sloan.

He rescued GM in the depression of the 1920’s.

He built the company into the largest corporation on the planet.

And he poured many millions of his own money into a philanthropic organization that still bears his name.

He did, however, a couple of less good things:

  1. He (allegedly) was pretty friendly with a small German guy with an attitude problem and a small mustache
  2. He invented “planned obsolescence”

Now, this concept (planned obsolescence) was pretty crucial to GM’s success and – from a business point of view – was a very smart thing to do.

In essence, prior to the mid 1930’s (and following Henry Ford’s edict – and made real by Karl Daimler and Gottlieb Benz) a car was to built to last.

And in the case of Daimler and Benz, last a very long time.

Ford’s motives were: “Replace everyone’s horse with a car.”

The Germans’: “Build the best engineered car.”

But GM’s was: “Don’t have last year’s model, have THIS year’s model.”

Epitomized by this great Doyle Dane VW ad “Auto Show” from 1970:

The motive wasn’t: “Build it as good as it can be”. It was “Sell them what we can, then sell ‘em something else next year”.

Good for bean counters. Bad for the rest of us.

It took until around 1995 for the Germans to stop making over-engineered cars.

The Americans’ tactics, unpalatable though they may have been, of building utter crap they’d polish as “this year’s model” won the day.

Today, pretty much every manufacturer has a new model every year. Creating devastating left-wing greenie bad stuff I’m sure.

But my 2¢ is this: The stuff we value, the brands we actually want – Whether it’s Rolex or Adidas, BMW, Porsche, Mercedes, Land Rover or VW, Ralph Lauren, Prada, Louis Vuitton, Gucci, Burberry, Chanel etc, most of the brands were cemented in the 1970’s and 1980’s. And built to last.

It’s maybe no coincidence, that not only are these the very same brands that do well in boom times when there’s money in everyone’s pocket, but they’re also the brands that do particularly well in a recession (sure, China helps). Land Rover had their best year EVER in the middle of the last recession.

For consumers know what many marketers have forgotten: when we SELL something we may not care if it’s built to last. But when we BUY, we sure as hell do.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s