planned obsolescence

In the automobile mass production of cars, the automobile producer can't own all the cars he's producing. You get up to something like at Chrysler Company, or the Dodge factory there are 5,000 cars in one assembly plant of the many assembly plants just one plant turning out 5,000 a day. And they were, say, something over a thousands dollars, so you've got a thousand times five thousand, and so that's $50 million, it's a very yes, it's about $50 million the company can't own it's own product. There is not enough capital to possibly do it.

So what happened is that the automobile "inventors" got going and Henry Ford and others, the others had it too, where people wanted their cars, there was a great profit for a distributor of a car, and it was very worth while being a dealer. So the dealers there is something called "distributor" which is a state area, and there is a local "dealer" within it so the distributor has secondary dealers. A distributorship of the automobiles had been a very profitable matter. So much so that Henry Ford and others were able to write in their contract, that if you happen to have my distributorship, you have to guarantee to take so many cars a year. So the and you're going to have to then, in the contract, agree that you're going to have to let me know weekly what the cars exactly what kind of car you want. Your quota for this week, we'll say is going to be 300. How many of what are those going to be? Opening or touring cars? Run abouts? What are they, what color and so forth? So the automobile distributor has to give a schedule so many station wagons and such and such, and such and such a date is agreed on. He must then, the distributor must be at the end of the production line his representatives must be there with banking papers to pay for the car as it comes off. And it goes through a testing and he drives it away. Puts it on his truck today, or whatever way he's going to ship.

This is the only way, then, that the automobile mass production could occur. Then the this meant that the local dealer rather the distributor, got his contract, because he was a well-known business man, and a business man apparently, when he undertook to do something, could bring it off so that he risked the money and would make a profit, and everybody came out alright. So the distributor himself, could not possibly put up the money to buy all these cars, so he went to the local bank. And the local bank knew him as a businessman who didn't bite off more than he could chew, so he would finance him. So it meant then that the local banks, and the local banks didn't own the money, it was the people's deposits. So what happened then was that the people's deposits were, you and I didn't know that our deposits, but are funding Detroit to produce cars. And our funds, our deposits are literally buying those cars and they are held temporarily in the paper work by the bank, and they go on to dump it as soon as they can on some customer.

But, and the very, very high equity advantage of the banks it's done at such a percentage that the bank can't really lose. You're not really losing money because his replenishment capabilities and so forth, are really very high, and along with unjust terms.

At any rate, the banks then, Walter Chrysler found, the banks owned the automobiles. Then, furthermore, the salesman in order to be able to sell that car had to agree to take the car in. So, it, then again, the distributor couldn't buy all those cars, so the banks bought them. So we find the banks all the lots full of cars around the country here, your deposits own those. You don't know it, but the Bank Manager is very eager to get to be sure to get rid of those. And so far at least up till now he's done pretty well. And the equities they have, I say, are such that they can the mark can go fairly far off.

But, what Walter Chrysler discovered was: that if you advance car #1 your best car, too fast, it deteriorates the value of your second hand cars, it accelerates the deterioration, and the banks would not allow the automobile companies at Detroit to advance their models. They could be really quite superficial, where what they did was, then, to make a superficial change in the body and then in the styling departments of all these automobile companies, they were putting clay in the mud guards making these a little more streamlined each year. And then making them so the mud guards and everything outside looked different, but they were exactly the same chassis. There were gradual improvement of the better brake where the brake is. There were some engineerings that did get better, but this was really very slow. And the changes were really entirely superficial.

So that the banking equity was not in jeopardy. In other words, it was not a matter of the automobile companies wanting to produce the Dymaxion Car, they just found they couldn't.

Now, I've told all that to you because, after W.W.II, W.W.II found all the enormous production capability of Detroit wanting to get in on the enormous money of W.W.II, so that they had to agree to give up their automobile production while they were getting out the tanks and everything else. But all of the automobile companies, then, agreed, one with the other, and they advertised that everyone wanted, the men when they got back, wanted to have their nice old car, that ran this way. I want my new Franklin, I want my nice new Franklin. But it's going to be just like that car so they advertised that this was what G.I. Joe wanted and so forth, keep everything for me so they kept all their dies.

Now new tooling of a car costs around oh about, my figures I haven't had this recently in 1951 I know it cost about $70 million to re-tool a new car. So they don't like to spend that kind of money. At any rate, they agreed to keep their tools. W.W.II technology advance was incredible. It meant then when the war was over, then, Italy and the foreign people were not in this mass production, but were really producing cars really went all steel, were very, very advanced. And the American companies came in, got out all the old dies, and they couldn't compete with the beautiful technology of the rest of the world.

As a consequence, they found that the distributors didn't like their automobile business anymore. The cars were not selling with the ease that they did. General Motors and Ford got enormous building programs where they get fancy new quarters Cadillac and Buick continually upping the sales rooms, trying to make things look more "schmaltzy" and so forth, but the distributor found that he just was having a very hard time to sell his cars because, in the meantime, labor rates were going up, everything was going up, and the margin of 30 or 40% that the distributor had was really eaten up by everything his rents and the works. He was going through a terrific headache, and making no money. So that he said, "I'm going to give up my dealership," and they realized he was a very good man, and they didn't want to lose him, so what the automobile companies started doing was designing a perfectly good car, but deliberately putting in inferior metal into this part or that part. It looked like just the way the part should look, and so it should really fool your eye alright, but it was designed to wear out in an hurry.

So they guaranteed that all their dealers selling cars that the customers would come back at least once a month and would pay so much, and what they did then was to advance the prices of the parts in the catalogue, to where if you wanted to put together a car out of the parts catalog of the Buick or so forth it would cost you four or five times what the Buick would cost. So that the only way they were able to keep their dealers was this is where the words "designed in obsolescence" came from. America, then, really started then cheating itself. It's own businesses deliberately fooling its own people. This was a fundamentally very unhealthy matter.

Well, I'll come to the point now, that I am renting my cars, and I find that when I rent the car because they, General Motors and Ford own their Avis and their Hertz and so forth, then they maintain the cars and they don't put in the bad parts. So when I rent my car I get a very superior car to anything I can buy, I assure you. And I can get almost a new car every time, and it's really very pleasant, and I can keep it as long as I want it. When I go out for Christmas time in California with my family, I'll rent a car for the month, and it's my car just as much as it ever was my car. There's no kidding about it, so this was just pure kidding myself about owning it.

[Buckminstel Fuller - Everything I Know]