FT99: “We don’t need government to protect consumers because dead consumers can’t buy anything.” -Old Pithy

Posted by PITHOCRATES - January 6th, 2012

Fundamental Truth

Corporations Care for our Personal Well-Being because they Care about Profits

A lot of people feel that if it weren’t for government big corporations would kill consumers with faulty, defective and dangerous goods.   That the only thing that prevents these evil corporations from killing us wholesale to maximize their profits is a caring government.  Because the only things corporations care about are profits.  Which is true.  But because they do they also care for our personal well-being.  For to make profits you have to sell.  And if you kill the people that buy from you you’re not going to sell much.

Case in point, the big 1982 Tylenol scare in Chicago.  Seven people died from five tampered bottles of Tylenol.  They found three additional bottles still on store shelves.  Johnson & Johnson, the maker of Tylenol, moved swiftly.  Not to hide anything.  But to protect their customers.  They initiated a nationwide recall, pulling some 31 million bottles of Tylenol out of the market.  They placed national advertisements warning people not to consume any acetaminophen (the chemical compound that is Tylenol).  Fully cooperated with local and federal authorities.  And introduced tamper-resistant packaging.  The 1982 Tylenol scare cost Johnson and Johnson 77% of their market share.  But because of their prompt actions to protect their customers as well as the general public, they regained their market share.  And the people’s trust.

During the Seventies the DC-10 had a series of high-profile accidents.  A cargo door design caused a near crash over Windsor, Ontario.  And a crash in France.  Ground crews thought they closed the door properly.  They didn’t.  The doors blew out and damaged the hydraulic control systems when the sudden decompression collapsed the floor into those control lines.  A DC-10 taking off from Chicago O’Hare lost a wing-mounted engine, damaging the leading edge slats and hydraulic controls.  Mechanics had changed that engine without following proper maintenance procedures.  As a result they overstressed the pylon mounting flange which failed during their take-off roll.  The DC-10 got a reputation for being unsafe.  When McDonnell Douglas resolved these issues a lot of people were still wary about getting on a DC-10.  Which didn’t help orders from airlines.  They ceased production with the last delivery in 1989 after delivering only some 446 aircrafts.  Some of which are still flying today.

If Businesses Endanger their Customers their Customers will Take Notice and Stop being Customers

McDonnell Douglas designed the DC-10 to compete against the Boeing 747, the first wide-body jet.  It couldn’t carry as many people but it could take off from shorter runways.  And with one less engine it burned less fuel.  It was a successful economic model.  And competed well against the 747.  But the 747 had/has a better safety record.  And reputation.  They’re still building them today.  With over 1400 having been delivered through 2011.  A number the DC-10 may have approached if it wasn’t for that reputation earned in the Seventies.

If businesses endanger their customers their customers will take notice.  And stop being customers.  That’s why Johnson and Johnson acted quickly.  And recovered.  McDonnell Douglas did not.  With declining sales Boeing eventually bought them out.  And retired the MD-11 (the latest version the DC-10).

Paying Consumers provide Great Incentive for Business to try and Predict Every Possible Failure

Johnson and Johnson led the way during the Tylenol scare.  The FDA caught up to them.  The FAA forced design modifications to improve the safety of the DC-10.  After approving the original design that they subsequently deemed unsafe.  Aircraft are complex machines.  No one can predict every possible failure.  In business.  Or government.  But the paying consumers provide great incentive for business to try.  Because dead consumers can’t buy anything.

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