Friday Rant: Why Has the Longevity and Quality of Household Appliances Gone Down the Tube?

Earlier in the week, I shared a quick story in a comment about a recent appliance purchase in the Busch/Reisman household. I'll repeat the comment here:

"We recently purchased a German washer/dryer (Miele) because it's the last one made with primarily Western-sourced parts and components (not because we believe in buying US or European products or brands because "it's the right thing to do" as some people believe; we voted with our total cost wallets). Over 15-20 years, it will be far cheaper to maintain this system compared to ripping out and replacing (or spending a fortune on part replacements) a Whirlpool or Bosch, which have essentially become Western brands with LCCS innards (trust me on this one -- I can speak from actual sourcing experience as well as the experience of an angry customer)."

"In general, our experience with other US and European brands for household appliances is that you can map the quality decline precisely to when China sourcing ramped up. Sure, they're fine for 2-4 years in warranty, but if they get heavy use after that, watch out. This is what gives me hope for a renaissance of domestic manufacturing and production with the proper policy incentives and alignment in place to enable it."

"BTW ... we have a rental property which still has a fifteen-year-old Maytag washer/dryer in it. What an amazing product -- it keeps working with minimal maintenance. Even with 10-15 cycles run per week, it refuses to quit. All domestically sourced/manufactured. No surprise..."

The history of this comment requires some explanation. A number of years ago, we purchased a high-end brand washer/dryer that will go unnamed. The purchase must have coincided with one of the first model years in which the dominant components and parts inside the slick exterior came from low cost countries (I was aware of this company's sourcing strategies based on some work I had done in the industry). What happened next is a quintessential example of everything that is wrong with global sourcing. To wit, after running the machines through <1000 cycles -- and having had the warranty just run out -- both the motor and major circuitry decided to quit on the washer (and switches began to fail on the dryer).

In our case, the $500+ in replacement parts and labor we were faced with made up roughly half the unit cost itself. The machine felt like it was designed to survive precisely for the warranty period and nothing more. Yet these parts and components, when previously sourced on-shore, nearly always lasted for the useful life of the appliance (10+ years in most cases). The customer service representative at the appliance company I spoke to admitted so much, and after much pressure on my part, offered to cover the replacement part costs of the motor and "brain."

What happened in this case behind the scenes? It's pretty cut and dry -- the Chinese suppliers, who I know were the part and assembly suppliers in this case, had engineered the components to last through the warranty period (which they knew they would be measured on). Nothing more (unless you got lucky), and nothing less (because that would create a red flag). Dozens of other appliance companies have followed in similar footsteps, embracing the China price as a means of propping up their bottom line and reducing initial purchase costs for consumers. But long-term, this is a recipe for failure.

As another commenter to the initial thread put it so eloquently, "This sounds so similar to the predatory loans that contributed to creating the financial crisis. We're offered low pricing that we know can't be (or shouldn't be WRT low wages) realistic, but the opportunity to profit is too attractive. Fast forward a few cycles, and lo and behold, the massive supply chain and quality issues have us spending more than we were in the first place."

Fortunately, my wife and I are in a position to make new appliance purchases with a 10+ year planning horizon. We have the cash up front to make a better total cost decision over the long run. For this reason, we recently opted to spend roughly twice the cost of alternatives on a German-manufactured and largely European parts/components sourced Miele washer/dryer that we know is built the way these machines were a decade ago. The payback period may be five or six years, but we also know we're being greener in the process. But what's really upsetting to both of us -- especially given that we're as guilty as anyone at moving spend to low cost regions which ended up skimping on quality -- is that not everyone can afford to make the decision we did, even if they had the knowledge available to them about the domestic/Western content of the parts and assemblies that went into the machine itself.

There are other options to hedge against new lower cost, self-destructing appliances on today's market. If you're willing to forgo a slick exterior design, there are appliance re-manufacturers in or near most cities in the US. They take some of the older (pre-LCCS) appliances that are picked up when new ones are delivered, then clean, test, replace motors, pumps and seals and resell them with a 1 year warranty for less than ¼ the cost of a new LCCS equivalent. But if you have that Western propensity to buy new -- and are averse to "used" -- buy an all-inclusive annual maintenance contract from a reputable local or national appliance repair company for all your appliances before the warranty expires. They provide the option of extending and reducing the cost of inevitable service and replacement parts.

Thanks to both the business and consumer mad dash to reduce upfront costs (the above options withstanding), we've created a disposable appliance society. And those who can least afford it, and are unlikely to have the knowledge of what has actually transpired to change the expected longevity of their purchases, will be the ones who end up paying the highest price over time. It's a sad reflection on our society.

Jason Busch

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