Feb 5, 2014

Painfully Familiar

Cycle World published an on-line piece of brilliance from Kevin Cameron (the single most powerful reason to read every Cycle World, at least a little); “OTTO CILINDRI: MOTO GUZZI V8 GRAND PRIX RACERFast, fragile, flawed and fantastic, the Moto Guzzi V8 of the 1950s should have ruled Grand Prix racing. But it didn’t…

There are phrases in this article that reminded me of my cleverly conceived, pitifully executed Winnebago Rialta and several other products I’ve owned in my over-extended life and, unfortunately, a couple of products that I’ve been associated with creating:

  • . . . [it] was a classic case of an ambitious program whose development needs exceeded the resources of its creators . . .
  • Don’t think of Guzzi as a quaint little European manufacturer quietly crafting oddities in a backwater. At the time, Guzzi had 800 machine tools on its production floor and was a major transportation producer. On staff were craftsmen in every specialty. The company had produced aircraft parts in the war and understood how to quickly push projects from paper to metal.
  • The V8’s “shakedown year” was planned as 1956, but the shaking never stopped. The tally was . . .
  • How did an old company, vastly experienced and successful in racing, come to this?

Too many marginal products (and the companies that produced them) have suffered a sad, slow, painful death, after draining their owners’ resources and patience from exactly the above list of engineering and corporate characteristics. In the case of the Guzzi, it was clearly a story about a company at the end of its brief period of innovation and racing competitiveness. In the case of Porsche and Volkswagen’s embarrassing experiments in complex gas and diesel engines and automatic transmissions, third world manufacturing facilities, and those sad “genuine people personality” electronic fuel and transmission control systems, we have a story of a company whose arrogance exceeded it’s competence by generations. American computer and software companies like Lotus, Borland, Osborne, Kaypro, Xerox, DEC, Digital, IBM, and Compaq all discovered a short path from fortune, industry leadership, and customer loyalty to footnotes in business history books by the same kind of incompetent “leadership.” In our two-wheeled world, we can look back at Montesa, Ossa, Bultaco, BSA, Norton, Triumph, Indian, a collection of European manufacturers, and a few US companies as one-time power players who are now just pieces of history you can occasionally laugh at when they are displayed in vintage bike shows (for more money than a bike dealership cost when those companies were viable). If it hadn’t been for the 2008 federal bailouts, Chrysler and GM would have become historical footnotes like American Motors, Packard, DeLorean, and a host of failed automotive builders. The American and world banking system has had generations of boom and bust cycles and there is no sign that any of those intuitions have learned anything for the experiences. At least, they haven’t learned anything that would make their businesses more stable or valuable to society.

It’s hard to kill an industry leader, but the one skill the people who rise to the top of corporate ladders have consistently demonstrated is an ability to dissipate success and excise competence. I’m unclear on why that is a talent that is worth the millions these characters are paid (there is, apparently, no consideration of return on investment in executive compensation). For us consumers, that corporate tendency to self-destruct makes the purchasing decision much more complicated.

All of this certainly explains the rush to planned-obsolescence products understandable, but it does not explain the associated high prices for these products. If, for example, you know that Apple intends its overpriced iPad/iPhone products to become obsolete or inoperable in one or two years, why would you pay a premium price for those products? If a motorcycle manufacturer has the habit of eliminating repair parts from service inventory a few years after that model’s production is discontinued, it would seem that company’s new model offerings would be generally lower priced than a company that consistently provides repair parts far beyond the end of production.

However, while products and manufacturers are becoming more complicated to research and information regarding serviceability, reliability, and cost-effectiveness is scarcer, consumers are getting dumber and less-discriminating. From a manufacturer’s standpoint, that might seem like a good thing, but I believe it will have a strongly negative impact on companies that either deliver premium products and/or those who pretend to be premium suppliers. If we’re going to be throwing away our stuff every one or two years, the winners in that game will the suppliers who are the cheapest. At the moment, that appears to be pretty much any product coming from China and that ought scare the shit out of the rest of the industrialized world. It’s possible that aiming for the lowest common denominator might be a poor business decision.

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