What Does a 1976 Car Have to Do with Technology Today?

When GM and Ford recently made headlines about the amount of money they have lost and the issues facing them, I was reminded of a lesson I learned in 1976. It is that lesson companies should learn, as well, or they too could go the way of GM and Ford.

Buyers look at the past and present, but sometimes forget to look at the future. Buying technology is a major decision, yet poor technology-buying decisions are made each day. This is often the result of poor data selection and poor perspective. For example, where do you look for advice? Do you call a current customer, call an old customer, do you question why a vendor has a huge customer service staff? Do you call a friend for advice?

Here is the story of what occurred in 1976. My father, a World War II combat veteran, and my brother-in-law, a naval officer who had served in Southeast Asia, both needed to buy a car. My father, like many from the WWII era, had strong views of Japan and the products that they had produced since the war. My brother-in-law had an appreciation for the impact of World War II on America; he had also just been to Japan and therefore had a different view of it and its products.

My father was only willing to decide among a Ford, GM or Chrysler product: to him there were no other choices. On the other hand, my brother-in-law had hot rods, big powerful sedans and the smaller cars Detroit produced. However, he remembered the oil embargo, the quality of the Chevy Vega that he owned and the complaints in general about Detroit quality. He knew he was making a decision that would impact his financial health over the next five years.

Therefore, he looked at the past but also contemplated the future issues and costs. While he looked at American cars, he also considered European and Japanese cars . The choices they made resulted in very different financial paths for each of them; and reflected the paths that Detroit and Japanese automakers would also take. In 1976, GM ruled. It was number two on the Fortune 500 list, had almost $36 billion in revenue and over $1.2 billion in profits. Ford revenue was a few billion dollars and a few spots behind; they, too, were a juggernaut. Honda had only sold motorcycles and a tiny car called a Civic and just started selling a new car model called the Accord. My dad bought a Plymouth station wagon. My brother-in-law bought a Honda Accord.

Why did my brother-in-law break with tradition and buy a Honda? Why did my father buy a Plymouth? My brother-in-law checked customer satisfaction, checked with service departments and calculated long-term ownership costs. My brother-in-law calculated long-term impact on his household not just the car payments. My father asked a buddy , and he only looked at the bottom-line price for the car. He didn’t need to do all that checking. He was sure a car made in the USA reflected all the good t hings he knew from the past.

In the next few years my brother-in-law paid for gas, a few oil changes and tires. His car held its resale value. My father paid for all of those things plus numerous maintenance charges, three times as much gas and finally he had to give his car away when he wanted to sell it.

Honda sold almost 400,000 Accords last year, up from 0 in 1976. Plymouth sold hundreds of thousands of cars in 1976, and nothing after 2001 as that is the year they went out of business. Your technology-buying decision involves the same issues as buying those cars in 1976. Looking back, living on a reputation cost my father and Detroit. Looking ahead, checking quality and actual bottom-line costs benefited my brother-in law and Honda. Are you kicking the tires of a tired legacy , or are you leaving a legacy that your company celebrates in 30 years?

Todd Rissel is the founder, CEO and chairman of e2Value, Inc. and is one of the nation’s leading experts on property valuations. Todd is a former insurance executive who recognized the shortcomings of the traditional appraisal and valuation systems. As such, many of the world’s leading insurance companies are now using e2Value to more accurately assess the true value of properties.

For more information visit www.e2value.com.