Asset Valuation Reserve - AVR

Finance allah shmoop What is planned Obsolescence We officially nominate

this business strategy for the top five dumbest business ideas

in history In the late nineteen sixties the american auto

industry was taking over the world America bought the most

steel and rubber shipped vastly the most cars and came

to dominate the banking and capital landscape Because this heavy

industry had such global impact on so many levels a

booming car industry pushed other countries to build roads and

bridges and infrastructure like stoplights and gas stations It spurred

interest in mining coal and steel and it brought nations

together to build something well practical and you know fun

Never drive it convertible in summer that's pretty cool music

blaring and we like that But then came along well

a bunch of idiots These were managers of the big

car companies in the nineteen seventies who observed that our

cars were lasting too long They were being too well

made And if we continued to make our cars better

and better so that they didn't wear out for twenty

years Well then the they'd sell fewer cars presumably So

what do they do Well they tried to make them

Worse Yes You heard that right They actively tried to

make american cars obsolete at some point not too many

years after you bought one so that owners would have

to turn them in and presumably by another american car

from an american manufacturer All right Yeah They'd have to

buy another car And another and another well The financial

managers at the time had the arrogance that the u

s auto industry was so powerfully dominant that nobody in

the world would ever catch up or compete They thought

they had so much room ahead of the japanese korean

and german car makers that well we could afford to

make them worse Yeah instead of a ten twelve year

cycle from birth to death the managers of gm ford

and others thought that if we created cars that died

after six or seven years well people would be forced

to buy mohr of them or rather buy them more

often And you khun bet that the legions of mechanics

might iss muffler shops and other repair areas Well they

were delighted with this notion and highly supportive of planned

obsolescence Unfortunately the us managers who made these decisions well

they didn't get out much at least not to japan

or korea and you know what happened Well look out

the window over your parking lot you see on lee

american cars not so much The japanese automakers stepped in

with much simpler builds in their cars with fewer parts

and better assembly and they were able to make them

at meaningful cheaper prices Will the american auto companies couldn't

change fast enough when they realized what a fungal mess

they've made and wealthy us dominance in auto manufacturer ended

quickly as buyers were introduced to a whole new and

better way of driving courtesy of Well the japanese players

mercedes and bmw also made big inroads at this time

as well So whatever happened to the geniuses who planned

this obsolescence pretty much nothing they're retired They took their

pensions built good golf games and well that's about it

Tesla could change things but well then again they might

get so distracted chasing mars that only missed the game 00:03:22.92 --> [endTime] entirely but we're better known Juan