Ravi, in Conversation

A friend who used to work for one of the largest car companies of yesteryear tells me that Detroit is now a scary place. The automotive industry is struggling so much to turn profits that layoffs are the order of the day. One of my professors who used to teach at Ross School of Business’ Professional MBA program talked about the increasing number of automobile professionals who enroll with the intention to switch away from the self-evident downward spiral facing these corporations. “In 2000, only 28% of 15 year old cars were still on the road; now 43% are. For Toyota and Honda, it is up to 54%.”, according to DesRosiers Automotive Consultants, with data from R.L. Polk Canada[1]. Which means that you sell fewer cars because your models have a longer roadlife. I imagine it might not be surprising if some brainy chap tries to sell us the concept of use and throw cars in the imminent future, however inconceivable it might sound. For today’s GM, Ford and Chrystler, making Americans buy more cars is something better than doing nothing, given that that they have been heavily unsuccessful in replicating the cost efficient models of the Japanese automakers.

Digging deeper, I find at least two important public functions that a developing economy like India or China does better than the prosperous United States, which I will elaborate in the following paragraphs. The existence of these facilities are taken for granted in the developing nations because they are a necessity for the teeming millions, there being an already established correlation between population and the line that separates a developed nation from a developing one, when we hold the Malthusian ideas to be true[2]. And in some cases, the population is so much that there is demand for a lot more of such facilities that the authorities there find themselves at a shortage.

The average American is so used to throwing away stuff that might work with a small repair compared to the reuse culture prevalent in a developing nation. Especially when it comes to extravagant convenience packaging, “we are paying…twice, first when we buy waste-generating, wastefully packaged products and then when we send them into our publicly supported waste management systems.”[3] Even though the mantra of sustainable development models have been reduce, reuse, and recycle, we heard only the third part. This might have been influenced by three facts – the need to attract a customer based on factors other than the quality of the product alone due to heightened competition, the non-availability of cheap labor in the United States leading to unavailability of repair workers, and the incentive provided by the government and the capitalist mechanism to promote replacement of products and parts compared to repairing them as a means of driving industrial growth.

This does not mean that the goods in question are any cheaper in the US that they get thrown away and replaced – in fact they might be doubly costlier, being shipped from manufacturing facilities at infinitely cheaper locations spread across Asia. This might be one reason why certain economists point out, contrary to the ideas stated a little while ago that population might be a boon as much as it is a bane for an emerging economy, given that another richer nation needs the working hands of the poorer millions. “There is no causal connection between the size and the growth of population and high rates of inflation, unemployment crimes and traffic accidents and culture of violence. At best population may be an aggravating factor.”[4] It is understood that the spurting growth in these nations is going to make labor costlier, and this has been evident for companies like Apple which burnt its hands when it tried to set shop in Bangalore and found that the costs did not work out.

Companies will search out cheaper destinations and their nomadic movement will continue until it finally boils down to raising the prices for their products in the United States. It is difficult to see an average American finding her earnings increasing at the same rate. I would assume that the economy has already reached its upper bounds and is most likely to stay at the plateau unless something drastic happens[5].Of course, there might be an intermittent bubble like the Internet and the more recent housing bubble triggered by the crisis in the sub-prime mortgage loans which cause nothing but the re-distribution of the same amount of money more unevenly among the population. All these ideas put together point out that it’s high time America starts to think of promoting the repair and reuse culture.

One thing we did not consider all along this discussion was the environmental impact. If a company like Waste Management can find itself in the Fortune 500 list[6], it’s enough proof that the per capita waste generation for an average American is pretty high. Recycling can be a trend, even a buzzword – using recycled stuff can be fashionable, but then it comes with a cost. Our Einsteinian principle of equality of mass and energy would imply that there is avoidable energy expenditure when you recycle something that could’ve been made more reusable in the first place.

Let’s take a common shaving razor for example. The use-and-throw sticks are cheaper than the regular stick that comes with replaceable cartridges (yeah, a friend pointed out that the use-and-throw stuff are of much lower quality that they can be used only once). The companies find it easier to do so because the bulk purchase effect of the use and throw razor equals that of the individual blade in sale. Similarly nobody ever cares to replace the refill catridge in the refill pen – the pen itself is tossed away once it stops writing. Now don’t be surprised when you see that your new gifted pen set is made of recycled material. Also, imagine the last time you carelessly printed something out at office to throw straight into the trashcan – it’s so commonplace now with printers at every corner of the office floor, the blue recycle bins helping us to ensure the mental satisfaction that this paper will get recycled.

Equality of labor, where the hardworking janitor gets the same social respect as the Wall Street banker has been the cornerstone of American capitalism. But when the society demands a certain lifestyle that you should adopt, it means that even a laborer needs to maintain certain standards. Life is as costlier for the workman as for the investment banker that his labor becomes costlier. Wherein lay the solution? It’s really a tough question.

***

One recognized need for any American of the age of 18 or above is a car, compared to the luxurious connotation that owning a car has in poorer Asia. This need is aggravated by the lack of public transportation – you’re doomed without a car of your own. One might find it unbelievable that a nation as prosperous as America never found the need to travel in trains when we compare it to countries in Europe or to Japan which are as prosperous. Did someone say that the need for the growth of the automotive industry at a time of recession was reason enough to purposefully undermine the fledging American Railroad? The present day American just loves to travel 8 to 10 hours in cars, and the quality of roads make it so easy. In fact, she has to, even if she doesn’t loathe it as much - the ones who can live with the crowding airports, delayed flights and such, can always choose the airplane. Nobody ever wants a train, then why talk about it all!

Houston, the fourth largest city in the States is proud of its roads and its position as the energy capital of the most powerful nation in the world. When it came down to the launch of a 5-mile stretch of the metro railroad, Houston saw protests all around[7]. Concerns of safety drowned the larger strategic importance of a mass rapid transit system - this rail route was badly planned that it moved in parallel with the road and followed the same traffic signals causing a high rate of accidents.

Friends of mine who’ve been held up in Houston three years back when Katrina threatened to hit the city said that all the big roads in the city seemed not enough at that time. When every American hit the road with her car, bumper to bumper traffic made the same highways that the cowboy country is proud of to be its ill equipped curse. The airports located far from the city did not help either, as the approach roads to the airport were all blocked. After the hurricane devastated New Orleans while Houston thankfully escaped without much damage, a few with forethought realized the importance of public transportation in evacuating a city, however strong the alert mechanisms were. Ironically, there is a large amount of protest to any expansion of the existing metro route which currently covers only a small stretch of the widely spread out city.[7]

Ask any Mumbaikar and he’ll go on proudly detailing his ‘wonderful’ experiences with the metro in that city – life without the metro rail is unimaginably hard in Mumbai, which is proven every time an unfortunate cyclone hits this commercial capital of India, crippling the network of trains to some extent. But it does not take too long for Mumbai to be up on its feet and carry on with business as usual. Chennai already has an efficient metro rail system, which it is expanding as the city grows bursting all boundaries. Delhi’s metro rail system is on a fast forward, finishing phases before deadline, and also aiding the conversion of the city into a modern capital, with the parallel enhancement of the road and bus transportation network. Bangalore and Hyderabad which saw a sudden spurt of growth with their infrastructure paning to catch up do not want to be left far behind. For instance Bangalore’s hastily approved Namma Metro is all set to complete its first phase by 2011, a year before Houston’s metro will be completed[8].

All this was just about the metro railways. But what forms the central nervous system of India, and profitably so with its cheap passenger fares is the Indian Railways – the world’s largest railway system under one management and the largest employer as well[9]. Possibly one city that cannot live without the noisy criss-cross of its round the clock trains is New York. NJ Transit and AmTrak connect it commendably to NJ allowing thousands of office-goers to live away from expensive Manhattan, yet earning their bread in this city. The buses act as a feeder service, but are not an ideal replacement for the trains which get affected as much by the morning and evening rush-hours and a perceived lack of comfort. But, when compared to gas and parking needs of a car, buses and trains offer a much more viable alternative in such a crowded city.[10]

Something we did not consider all along is how much accustomed an average American is to traveling in trains and buses. The automotive industry will be pissed at any proposition that might nosedive their expectations of turning a profit. They won’t want to look at the possibilities in becoming the Mistubishis of America by developing engines and parts for tomorrows’ public transportation systems. But in fact, this is the reality – the Americans are going to be forced to take this route twenty years from now for the same reason the population in the developing nations is doing so – affordability and freedom of movement compared to replacement costs and need for road space.

***

Few in the United States except the futurists think of these as essential for their day-to-day living, mostly due to the presence of alternatives. The average American has been used to living this way all his life that she does not want to be bothered. Here’s the catch – the population of USA is also outgrowing its infrastructure at a fast pace that these are going to be of utmost importance 20 years into the future. It’s time that the American opens its eyes to reality and thinks about embracing product reuse and public transportation. Let’s hope that the American won’t be gullible enough to let Detroit sell her a detestable use and throw car.