27 March 2015

My (still) broken dishwasher and the weakness of modern big business


I do not propose to repeat here my theories about why excessive consolidation and regulation have caused a deterioration in the quality and durability of basic household appliances. It is all in the piece I wrote for CapX back in December, which was sparked by bumping into Dominic Lawson. His dishwasher had also gone on the blink.

But for those remotely interested, I wanted to offer an update on our (still) broken Hotpoint dishwasher.

Six months on from the beginning of the saga, here are the facts.

– Over the course of several months, there were four visits by engineers. The first one told my wife that it was our fault. Run the machine on empty, use some vinegar to clean it, run it on empty again, and then all will be fine.

– On subsequent visits by other engineers we heard that the error code, 10, on the display panel was unknown to them. These modern computer panels on dishwashers just don’t work, we were told.

– Eventually, several months after the initial visit, the first engineer returned to install some new parts. He then turned on the machine and it didn’t work. Ah.

– Time, said the engineer, four months late, for a new machine. Yes, that’s what we’ve been saying, my wife said.

– Yesterday, the new machine was delivered and the old broken one carted away. Hurrah!

– But of the installation engineer there was no sign.

– We then got a message to say we had not been in at the appointed time. This is not true. There was someone in throughout.

– The various departments in Hotpoint (or the agency to which Hotpoint contracts these matters out to) had got their wires crossed and not coordinated the installation.

– Today, a very nice and efficient person from Hotpoint has been on the phone to apologise profusely for the company’s latest mistake. There was a booking error. They will rush us an engineer on Monday to install the new machine.

– All of this, the visits, the spare parts, the time of staff spent making calls and booking appointments, and the delivery, must have cost Hotpoint much more than the broken machine would have cost to replace in the first place last year. How is this good business practice to say nothing of the poor customer experience?

Why do I mention any of this? It’s certainly mildly annoying that our kitchen will have an uninstalled dishwasher sitting in the middle of the floor all weekend. But there you go. These are first world problems and there is much worse happening elsewhere.

Despite that, one serious point stands. Those who think that capitalism and markets are under threat – from creeping corporatism and the normalisation of state interference in commercial problems since the financial crisis – need to engage with this stuff. This – poor customer experience, broken appliances, low stock, hours on the phone waiting to speak to a real person, faulty manufacturing – is how most people, who don’t tune into theorising about markets, experience what they think of as the failings of big business and/or capitalism.

Of course, the many successful transactions they undertake every day that are evidence of markets working, such as when they go to the supermarket or their local corner shop or they buy book a holiday, are taken for granted. That, however, is life. People tend to notice the stuff that goes wrong and not what worked. The entire news business has long been built on that basic human instinct.

The danger here is that the pro-market side sound like nostalgics disconnected from reality. Thatcherites like to say that until she came along four decades ago, you had to wait months for the government to install a telephone. Even if that is true (some people contest it), how is it any worse than people now having to wait months for a dishwasher that works?

I think the answer is more competition, of course, although I suspect that that alone cannot deliver the required improvement. Perhaps the financial sector and large investors can also somehow be lured out of excessive short-termism which results in the construction of unwieldy mega-corporations. Patched together by endless deals and M&A chicanery, they sometimes struggle to do their basic job. They tend to be investment vehicles looking for the next takeover or joint venture rather than companies primarily focussed on selling good stuff to customers.

Whatever the answer, capitalists need to take this stuff seriously. If not, people will be open to the dangerous argument from the Left that government must intervene even more.

Iain Martin is the Editor of CapX.