Not a Formula for Success

Why does it seem like America is no longer the economic superpower it once was?  Perhaps, with the shift to a more global economy, consumers care less about "buying American" and more about getting the most quality for their dollar.  Today's article in the Wall Street Journal detailing car reliability ratings illustrates the point.  Here is the link: Rating Car Reliability: Detroit Moves Up but Asia Rules.  In summary, of the 27 brands ranked for reliability by Consumer Reports Ford ranks 10th, Chevrolet (the highest ranking GM brand) ranks 17th and Chrysler stumbled into the ranks at 27th.  However, I am almost certain that if one surveyed the rankings of wages and benefits, the American autoworker would be at the top of the list.  Yet, we as Americans are still perplexed at how to get out of our economic funk.  Compare American auto producers versus our foreign competitors.  We produce lower quality cars, which results in fewer sales at a lower price tag.  Then we pay our workers more in wages and benefits.  It doesn't take a genius to figure out why we had to bail out the industry.  The days of getting by on average products and services is gone.  Check out Thomas Friedman's column at the NY Times The Election That Wasn't.  He does a great job of expanding on the same sentiment.

Up, Up and Away

Have you flown recently?  If so, you are likely a superhero, a drug taker, an airline passenger or perhaps any combination of the three.  As just a plain, old airline passenger and wannabe superhero I had a hard time swallowing the mass of charges included in a recent air travel ticket purchase.  The total cost of a trip ends up nowhere near the price quoted on an initial search of an airline website.  So, today's story in the Wall Street Journal, Airline Profits Taking Off, came as no shock to this customer.  The essence of the article was to report the record profits that U.S. airlines have reported this quarter.  The reasons for these gains should be fairly obvious.  The increase began when airlines permanently raised their prices in response to the skyrocketing oil prices of 2008.  Likewise, they tacked on a slew of charges including those for luggage.  The recent mergers of several big airlines have created a practical oligopoly in the U.S. market.  This might normally be good for consumers, as a price war could erupt between competitors.  However, as the WSJ article reports, the airlines are now concerning themselves more with returns, rather than market share.  Translation: They care more about profit than growth.  If this mentality continues across the industry, we should not expect to see prices fall anytime soon.  I guess I should thank Southwest for not charging me for my bags.  Those rebels.  Bold Prediction for 2011: Quarter- operated bathrooms and $1 charge for hitting the flight attendant call button.

Going Green with a Little Noise Pollution

Today's Wall Street Journal (yes, I read WSJ quite a bit) features a story about Sun Chips ditching their attempts to "go green" after numerous complaints from their customers.  Here's the link: Sun Chips Bag to Lose its Crunch.  In summary, Sun Chips created chip packaging that was advertised as biodegradable.  On the surface, this sounds like a good idea.  Yet, as a lover of the Harvest Cheddar Sun Chips, I can tell you the new earth-friendly bag has one giant drawback.  It's loud.  I mean really loud.  So, unfortunately every time a consumer opens the bag of their favorite snack everyone within a half mile can hear the loud crinkle of them digging into their chips.  I have no idea who was in the marketing meeting when this idea came up, but a rational person would think that someone might have raised the concern over the obnoxious sound of the bag.  When eating these chips, opening the bag is like making an announcement to your friends and family that you are just too gluttonous to put your chips down.  They may even think a bear broke into your kitchen and is destroying your home in an effort to satisfy its insatiable hunger.  This is a classic example of an idea that is good on paper but never should have made it to production.