I get very frustrated with the American belief that globalization is making their lives worse and that its not the US Companies fault. IE losing jobs, shifting production off shore, quality and standards etc etc. If the US companies were innovating more, then globalization wouldn’t be happening in the US on the scale it is. I think a prime example of a company who has innovated, and in the US still builds reasonable appliances is Whirlpool.
For example, the US/GM loyalists are up in arms, that Toyota has come in and is slowly but surely becoming the number one seller of cars. They're too narrow minded to see that due to complacency and no R&D, the cars that GM/Ford and Chrysler make are out of date, and haven’t changed significantly since the 1980's. This is where the profits vs product quality argument could ring true, however my understanding is, that due to the cost of retirement commitments, GM has had a huge axe hanging over it for years in this regard, In theory the extra money should've gone towards this. But it would appear that it's all become profit.
I know that Keven sees whirlpool as an evil empire, however what they've done in the US was innovative. For now I'll focus on the TL washers and we'll forget about the crap that is most of the euro product line.
In the late 70's everyone was requiring more for less because all Americans wanted it all NOW. To stay competitive, Whirlpool took a hugely complicated machine design, that would've taken hours in comparison to build, and designed a machine that could be fully assembled/disassembled in minutes rather than hours. Is it as good as a BD machine, probably not, but it still lasts on avg 10-15 years, doesn’t suds lock, has reasonable water usage, good cleaning ability when not overloaded, and is simple to repair. That’s an example of innovation improving the product for the same or a lower price.
To look at GM/Fridgidare. Based on how the sale/acquisition to WCI occurred, I would suggest that when the 1-18 was released, its days were already numbered. Instead of innovating, they just tried to cheapen the design and as such the machine became failure prone, with leaking bellows, damage to bearings due to water damage, undersized clutch. Then the recirculation system was poor, the basket hard to clean.
At this stage I think the cost cutting was to try and remain competitive rather than to increase profit. The machines prior to the 1-18 would've been very heavy with the solid outer tubs, required far more procelanisation etc. So by the end of the 70's GM would've been no longer attracting new buyers, brand loyalists would still be purchasing the machines, but compared to the 10yo machine they were replacing, it would've been a disappointing step down.
GM would've realized that they were losing money and due to the cost cutting measures of the early 70's to redesign their whole product line would've been hugely expensive and I would guess that after 10 years of cheapened rather than innovating products, there was rapidly becoming a wary market. So rather than face the millions involved in redeveloping a product line, that was always going to be expensive to manufacture and still have weaknesses, they sold it off.
Boo Hiss, every says, however the WCI machines, had a much simpler transmission, and while not instantly, could in the long term be sold at a lower price point and still get the required 5-10 years lifespan. This is where you have to decide who to lay the blame with, was it GM or the American Public? GM Could've kept building premium products ala Miele for example, but the American public would've needed to be prepared to pay for it. In a world where items are disposable, and you always need the newest and prettiest, the majority are rarely going to purchase a high cost item as it takes too many years to pay for itself.
To look at what happened with the Australian market in the late 70's, it was really only Whirlpool and Hoover that suffered. Simpson kept powering on with its updated design for ages, with no loss in reliability.
Whirlpool made the BD machines in AU under license by Malleys LTD. In the late 70's Malleys was sold to the Email Conglomerate, who already made Westinghouse, Kelvinator, and by the early 80's Simpson. The license to build the BD whirlpools wasn’t transferred, so Whirlpool as a brand disappeared until 1990.
Hoover carried on, until in the 80's Maytag decided to relaunch hoover as a low end product and introduce Maytag to the market as a premium product. However to make the hoovers a low end product, they cheapened rather than innovated, and they became fragile machines. This seems to be the trend that Maytag followed, in its quest for world domination
and profit. Maytag is example of a company who just kept trying to increase profits, to the detriment of the product.
Email with the Simpson on the other hand innovated, the machine became cheaper to build, but still just as reliable. The machine still uses Masonite for the back panel and its never caused any issues. Its just an inspection opening after all. The machines now feel very lightweight, but its still reliable and when you buy one, you know it'll last up to 10 years.
What does my huge diatribe mean to me?
To stay competitive and to feed the "I want it now" now market that grew, companies had to either cut costs to the detriment of the product, or innovate. Those that have innovated still make a reasonable quality product but now at a price the public is willing to pay and they accept that they have to sell more products and a slightly reduced profit.
Those that cheapened the design to try and increase profit, have now mainly been bought up by bigger companies, the designs have either been killed off, or in Maytags case, unsuccessfully used to try and cheapen their own product lines with a view to make more profit. Once they hit rock bottom, they too have now been aquired.
Initially I don’t think the companies set out to build a crap product that made them huge profits, they cheapened it to stay competitive with those who innovated. However once they cheapened the design in a negative sense, and didn’t innovate, it was the start of a downward spiral.
