Misery from companies

Posted: May 13, 2006 2:05 PM
Americans should be the happiest people in history. We’ve got a booming economy, with 4.8 percent growth in the first quarter. Unemployment is down to 4.7 percent even as the population grows. The Dow Jones is near a historic high.

But we’re not happy.

In a recent AP poll, 73 percent said the country is on the wrong track. Only 23 percent say we’re heading in the right direction. Why, in the midst of our affluence, are so many so unhappy? In part, perhaps, because money can’t buy us customer service.

Consider our cars.

My family drives a 2001 Chevrolet Venture with fewer than 73,000 miles on it, and we’ve had no end of trouble. First the air-conditioning system leaked. Then the coolant system. And the fuel line. Virtually everything has leaked except, ironically, the tires. It has cost several thousand dollars to fix all these leaks, which of course were not covered by the car’s “generous” 33,000-mile warranty.

G.M. insists its long-term problems stem from labor issues. The company says it has promised to pay union members far more in benefits than it can ever afford. As columnist George Will put it recently, “It is better to be fired by General Motors than it is to be hired by most companies.” But its real problem isn’t benefits. The company can always find ways to avoid paying those. Its real problem is more difficult to solve. As my family found out, G.M.’s selling a lousy product.

And an increasingly expensive one. The Commerce Department reports that in 1991, the average new car cost $20,440. By 2002 that was up to $21,440 (in constant 2002 dollars). That doesn’t seem like much of an increase, but just think how much the cost of a computer has come down during that same span. For a fraction of what one would have spent in 1991, one can buy a computer today with thousands of times more memory.

In the early days of automobiles, consumers did see the cost of cars come down. The Economist magazine a few years ago wrote, “In 1900 a car, then hand-made, cost over $1,000. Henry Ford’s original Model-T, introduced in 1908, cost $850, but by 1924 only $265: he was using an assembly line, and, in virtuous circle, was also selling far more cars.”

That virtuous circle was broken long ago. Still, if our car had been well made and had run well for years, my family would certainly have purchased another G.M. car. Instead, we’ll probably get an import next time. Quality matters.

And if a car isn’t frustrating enough, try a cell-phone company.

It’s impossible to turn on the television without seeing an ad attempting to convince you to switch cellular providers. New customers get free phones, rollover minutes, no roaming charges. But once you sign on the dotted line, they’re free to give you the shaft.

Back in December our phone was stolen. To get a new one from Cingular would have cost $150, but the helpful sales clerk had a suggestion: Get one for less from EBay. There was just one drawback -- while the phone we bought was indeed less expensive, it didn’t work in our area (even though the listing on EBay had indicated it would). So we were still phoneless until a friend stepped up and offered us a used one.

Inexplicitly, just five months later that one has broken. We’re back to square one.

Again the Cingular people are no help. The walls of their stores are decorated with phones, some as inexpensive as $20, but that price doesn’t apply if you’re an existing customer. They’d be happy to give a cheap phone -- even a free one -- to someone who’s been using another carrier. But if you’ve been with Cingular for years and years, you’re out of luck until your current contract runs out. It’s akin to going to an expensive restaurant, getting lousy service, eating lousy food and, at the end of the evening, still having to pay a hefty bill.

Too often corporate America treats potential new customers better than it treats loyal existing ones. Too often it builds lousy cars and charges a fortune to fix them. And too often it has turned 800-numbers into what consumer guru Clark Howard calls “customer NO-service” lines. Americans have to punch so many numbers into our phones (when they’re even working) before we can talk to a human that many people just give up.

We’re often paying more for less customer service. No wonder so many say our economy’s on the wrong track.