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Of Pianos and Cars

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A great column has been published today over at Mises worth reading. As a musician myself, the subject certainly struck a chord (ha). The author looks at the rise and fall of piano production in the United States and how it compares to Detroit’s situation today. Certainly an interesting and valid analogy, proving that no particular product or good is exempt from the laws of the free market. I stand by my previous statements that providing a bridge loan to GM and Ford is a more palatable situation than printing money to cover losses on absurd, synthetic financial instruments, but Mr. Tucker does us the good deed of reminding us that less-bad is not the correct option in the long run. Excerpt and link to the full article follow below:

With the growth of this manufacturing came an explosion of shops that served the piano market all up and down the industry. Piano tuning was a big-time profession. Retail shops with pianos opened everywhere, and the sheet-music business exploded with them. Ever notice how in big cities the music stores are typically family owned and established 40, 50, and even 100 years ago? This is a surviving remnant of our industrial past.

All of this changed again in 1930, which was the last great year of the American piano. Sales fell and continued to fall when times were tough. The companies that were beloved by all Americans fell on hard times and began to go belly up one by one. After World War II the trend continued, as ever more pianos began to be made overseas.

In 1960, we began to see the first major international challenge to what was left of the US market position. Japan was already manufacturing half as many pianos as the United States. By 1970, a revolution occurred as Japan’s production outstripped the United States, and it has been straight down ever sense. By 1980, Japan made twice as many as the United States. Then production shifted to Korea. Today China is the center of world piano production. You probably see them in your local hotel bar.

Click to Continue Reading “The End of the US Piano Industry”

Written by caseyayers

10 December, 2008 at 12:06 pm

Steve Jobs, Auto Industry Savior?

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Marketwatch has an interesting column that follows up on a point made by a different interesting column written a few days ago by Tom Friedman. At the tail end of his article, he said:

Lastly, somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.

The question is, could The Steve save the US auto industry? The unionized workforce is a major bump in the road, so to speak. Part of what makes Apple so successful is its cutthroat culture. Called a “Stevetatorship” by more than one, the UAW would balk at any attempt to as tightly extract every ounce of effort from each employee.

Further, it seems like many of the Big Three’s designers and engineers are simply stuck in the past and not always willing to make the next big leap. Another important key to Apple’s success is its almost gleeful abandon at the prospect of leaving old ideas and technologies on the side of the road. Consider the switches from the old OS 9 architecture to OS X, from Carbon to Cocoa or, the most high-profile of these sea changes, their complete shift from PowerPC to Intel in less than two years. The last one in particular is incredible. Here was a situation where both the software and the hardware saw major changes across a variety of products in a very short period of time, and it was accomplished with the least pain of any comparable transition by other manufacturers by far. Compare this huge shift in architectures to simply trying to upgrade to Vista from Windows XP and tell me which operation was handled with greater care.

Concept Chevy VoltThis flexibility comes with a price, of course. As mentioned above, Apple is definitely a fast-paced company and has not shied from a tough decision since Jobs retook control. It is this mental agility and confidence in quality that has been Apple’s formula for great success since the launch of the first iMac. This level of innovation does exist within the bowels of the large American auto manufacturers; their presence is made most clear at industry trade shows when sleek and sophisticated concept vehicles are put on display. But, for one reason or another, this potential seems always dragged back to Earth. Just consider the differences between the original Chevy Volt concept vehicle compared to its production counterpart, even now at least a year or more away. What was once a beacon of great imagination has become just another Malibu after the first 45 miles of electric-only power.Volt Production

It’s not just the vehicles that need fixing, though. The whole fuel architecture must be changed in order to make any real progress from an environmental standpoint. The chief problem with electric vehicles is their relatively short range and long recharging times. The solution is to have battery-swap programs in place at refueling stations across the country. Simply putting a new battery into the vehicle should be no more painful than refilling a gas tank is now, and if the architecture is laid out efficiently then it does not need to entail a massive new line of expenses for the end user.

Finally, improving the driving experience is key. Americans continue to shy away from compact vehicles even in the face of high (but continually decreasing, at the moment) fuel prices because they like the luxuries afforded by larger vehicles. US auto makers must make the features onboard the most innovative and highly-sought after in the market. This, as Apple well knows, is a difficult and continuous proposition, because the competition will simply lift the best ideas and put them on next year’s model.

The magic isn’t in Steve Jobs, the person. The magic is in “Steve Jobs”, the mentality. “Fixing” the domestic auto makers doesn’t mean converting all of their factories wholesale into subcompact production lines, because this is not what the market demands. Prices must fall, yes, but more importantly, quality must rise. Because as Apple knows, this may not be the recipe to market domination, but because people will pay a premium for a clearly superior product- an American product, whatever that means today*- it is the recipe for recovering and roaring profits.

*-It’s important to remember that many vehicles from Japanese automakers are made today in American factories, mostly located in the South, where open shops ensure that the ludicrous arrangements devised by unions will not exist.

Written by caseyayers

14 November, 2008 at 2:51 pm