Why are washing machine prices so low?
 
Date June 29, 2004
Section(s) Columnists
By Wendell Wendt  
 
Maytag strike — those words in an opening sentence should double the number of persons who read this column. Here are some comments which I open are not slanted toward either the company or the union.

In 2004, a basic automatic washing machine sells for about the same price as 20 years ago, but an automobile sells for about three times as much as in 1984. How do you account for this difference? Here are some answers from a variety of people.

A Maytager on the picket line said, “There is less demand for a washing machine. People are willing to wash their clothes at a laundromat, but don’t want to ride in a taxi.”

A lawyer suggests there is a gentleman’s agreement among the auto companies to raise their prices every year.

A retired Maytag engineer says Maytag‘s competitors have moved their production overseas where they pay low wages. Therefore, they can make a satisfactory profit without an increase in price.

A newspaper employee observes that a washing machine is not a status symbol. When people buy a washer they put it away in a utility room or the basement, but a nice car is parked in the driveway for the neighbors to envy.

A Park Centre resident told me a washing machine is a fairly simple mechanical device compared to an automobile. Because of this, it takes less engineering skill and less capital to begin making washing machines. This invites competition.

One unanswered question that comes to my mind is how production at Newton compares to other Maytag plants? We have learned that hourly production costs in Newton is higher than other Maytag plants, but there has been no disclosure of how much is produced per hour in Newton compared to other plants. Is the value of the finished product per hour worked higher at the Newton plant, about the same or lower? Also, if I were a negotiator for either the union or the company, I’d want to know how much of the company’s total sales are of products produced at the Newton plant.

I’m happy to see that federal mediators are now involved in the negotiations. I have had a favorable experience with a federal mediator and thus have a good opinion of this service.

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