Passage II

SOCIAL SCIENCE: This passage is adapted from the article “Farewell to Mr. Fix-lt” by James Surowiecki (©2001 by The Condé Nast Publications Inc.).

Ricardo Gomez runs an electronics-repair shop in Brooklyn. He started in the business fifteen years ago. Today, he can fix just about anything, from tape-eating VCRs to CD players with errant lasers. The one thing he can't fix is the fact that people don't seem to get things fixed anymore.

“Years ago, I had more work," Gomez says. "But today prices have come down so much for things like TVs and VCRs that people would rather just buy a new one than fix an old one. That also means that I can't charge that much for repairs. It's a tough life, being a technician.”

And it's getting tougher. The shelves at the back of Gomez's shop hold rows of TVs and VCRs with their innards spilling out, but Gomez makes just a slim profit on them. He charges around forty dollars to fix a VCR, a bit more for a stereo or a TV. There are some things he generally doesn't bother with—camcorders, some brands of disc-players—because it costs as much to buy parts as it would to buy a replacement. But at least he's still in business. By some accounts, only a fifth of the repair shops that were open fifteen years ago are around today. Even the computer-service business is slow. In the good old days, the repair trade was, a business where you were guaranteed a steady stream of customers. Today, about all you're guaranteed is a long lunch break.

That's because the repair business is on the wrong side of the most powerful trends in global manufacturing of the past twenty years: the sharp rise in quality and the steady decline in price. When it comes to most manufactured goods, these are the good old days. Products are more reliable and more durable than ever. In a recent survey, Consumer Reports found that, in most product categories, repair rates were between just ten and twenty per cent.

The average life of a car is up by nearly half since 1970. All this, and stuff often actually costs less. Your run-of-the-mill VCR is forty per cent cheaper than it was seven years ago. High quality, low price: for the repair shop, it's a deadly combination.

“You don't find the kinds of things had you you or decades ago, like toasters that could electrocute TVs that blew up," David Heim, the managing editor of Consumer Reports, says." If you buy a TV, you're going to get a good picture, and if you buy a stereo you're going to get great sound. In fact, the guy who used to test stereos for us told me that you cannot buy a bad stereo. They don't make the parts anymore."

Americans have become the most demanding consumers in the history of the world—we expect our machines to work. Nonetheless, we have a vestigial memory of the days when they didn't. How else to explain the fact that, every year, people shell out millions of dollars on extended warranties that they seldom get a chance to take advantage of?

For manufacturers and retailers, warranties are easy money. Service plans usually run just two or three years and cover products that either will last much longer or are easily replaced. The consumer pays up front and rarely collects. You can see the results in the quarterly reports for any major electronics retailer. A big chunk of the profit margin comes from the sale of extended warranties. Some retailers even call customers months after a sale to offer repair plans and warranties. Needless to say, they wouldn't make such offers if they really believed that your TV was likely to go on the fritz. But folks still bite. "People spend a lot of money for a little extra peace of mind," Heim says.

The lingering allure of warranties is understandable if you consider how recent the quality revolution is. Before the nineteen-eighties, most American corporations saw quality as something that cost them a lot and profited them little. They believed that it didn't play a big role in a consumer's decision to buy a product, and that there was no way to make things both better and cheaper. Japan's success in the seventies changed that Japanese companies, influenced by the ideas of the quality-control guru W. Edwards Deming, began winning market share by producing televisions, cameras, cars, and VCRs that were vastly superior to American products. Eventually, American companies woke up and adopted Deming as a prophet.

The impact of the quality revolution was immediate. The marketplace no longer tolerates shoddy products. Consumers have grown so accustomed to things being ever cheaper and ever more reliable that companies have to keep driving cost down and quality up just to stay in the game.