Our throwaway culture has its roots in the 1920s and 1930s, when mass production started to take off. Beginning at that time, concepts such as “planned obsolescence” and “perceived obsolescence” were woven into the design and marketing of products. The idea was to create continued and on-going demand for stuff by designing things to break down and fail, or go out of style. These concepts form the basis of consumerism, the philosophy or worldview by which much of the world now sees things.
Today, we hardly give a thought to getting rid of a cellular phone or TV when the next model is introduced. When something we own breaks down, or is no longer fashionable, we throw it away and buy the new model. We rarely consider fixing something that’s broken, or resisting the urge to stay in style and “keep-up with the Jones’s.”
We have become so accustomed to throwing away stuff that the average American now generates roughly 4.5 pounds of garbage each day, which is up more than 66% from 1960. While there are a number of causal factors that have led to this point, the fact remains that the throwaway lifestyle is the backdrop to the way we live. We don’t give it much thought.
Consider the rising percentage of total economic losses – total losses for short. Over the last 10 to 15 years, total losses, as a percent of claims, has gone from around 9% to over 14%. Analysts indicate much of this is due to the age of the fleet; however, this doesn’t explain the whole issue. Factors such as claim severity and repair complexity also play a role. Total losses are a complex industry problem; a number of things have led to their rise, but we cannot overlook the influence our throwaway culture – our way of looking at the world – has had on this issue.
To understand this, we need to look at the beginning of the system: the production of automobiles. To build cars, one must have an assembly plant; building one takes a tremendous capital investment. Once committed, that sunk cost must be put to work building cars. OEMs must produce cars at a particular rate; otherwise, they run the risk of losing money fast. This is what begets the practice of rebates, wherein an OEM will heavily incentivize consumers to buy certain vehicles; it’s those vehicles that are not moving that receive the highest incentives. This translates into “pressure” to move new vehicles through the system, from the assembly plant into consumers’ hands. This pressure also means there’s no incentive to design cars to be repaired, because making them easy to repair would mean fewer consumers in the market for new cars. Why not simply throw the vehicle away when it’s reached a certain age, or has been in an accident?
Of course, insurance providers have a huge stake in total losses too. For them though, it’s just a matter of running formulas, assessing the salvage market and figuring out what makes the most economic sense for their bottom line. This shouldn’t come as a surprise; after all, it’s just business. Those who bear the burden of this system are the consumers, many of whom are forced to shell-out thousands when their cars are written-off as total losses. Collision repair shops also suffer under this model, and so does the environment.
Through mass production, automated assembly and increasingly lower labor costs, we’ve managed to create quite a world for ourselves. Some would argue this is a good thing; however, when we consider what we actually pay for it – in terms of lost jobs and environmental degradation – we have to ask ourselves if it’s actually worth it. No one would argue that consumerism has not brought tremendous good to many people – it has. What’s becoming clear, though, is continually eliminating jobs, creating waste that cannot be processed by nature and consuming energy at rates that are destroying the atmosphere are things we cannot continue doing forever.
We need a new way of viewing the world; we need to move beyond what’s good for consumerism and find an answer that’s “restorative” – to society and to the environment. The answer is already here; it stands in marked contrast to the throwaway culture of today. It lies in the notion that repairing things provides meaningful work for people and reduces environmental degradation. Many are calling this the “circular economy.” It’s being practiced in certain manufacturing sectors today. Caterpillar’s repair and remanufacturing businesses are a good example of it.
What the collision repair industry needs is a voice that will champion the value of repairing vehicles, versus throwing them away. We have much work to do on the system of the automobile if we are to make progress and establish a sustainable existence. The collision repair industry can play a vital role in bringing about this transformation, but it will take leadership and focus. The industry needs an organization that will work across industry stakeholders to come up with the solutions that will foster its sustainable growth. This organization will lead everyone to seeing how it is repairing cars creates meaningful work for people and reduces environmental degradation. It’s that simple.
Mike Shesterkin is the general manager of What’s Next, LLC, a practice that helps businesses achieve sustainability through the creation of triple bottom line value. Using proven models of continual improvement, What’s Next helps management teams develop strategies and implement action plans that build social capital, reduce negative environmental impact, and grow profitability.
With more than 30 years of industry experience, Shesterkin has led initiatives that have advanced the sustainability movement. Most recently, he has been working with AkzoNobel to advance triple bottom line initiatives within the collision repair industry. What’s Next is also a business in residence at the Green Garage, a triple bottom line co-working community located in Midtown Detroit, MI. What’s Next is working with the Green Garage community to launch “Lazarus Cars,” a business that will leverage economies of scale to repair and refurbish automobiles for use by those who would otherwise not be able to afford reliable transportation.
For more information, contact Mike Shesterkin at 734-464-8353, mdshesterkin@gmail.com or visit www.whatsnextllc.com.