Built to last?

My grandmother bought a small refrigerator back in the late 1940s when she lived in Wisconsin. She brought it with her when she moved east to live with us in New Jersey in 1960, and my family used it as a second refrigerator. The refrigerator was still going strong in the late 1970s when I took it with me to an apartment in Boston. Today, it is in the basement of my dad's house in New Hampshire, and I would bet it still works.

That refrigerator--which has a condenser that can stop a tank--was clearly built to last. That is how we think things should be built. There is something reassuring about owning sturdy, durable things. Yet that refrigerator was overbuilt. It has long since outlived its usefulness, since it is too small, requires frequent defrosting, and uses a lot of energy.

That makes it similar to many paper machines around the world today. They were built to last and people take pride in maintaining them, but they have outlived their useful lives. It may be time to radically rethink that proposition, even if it goes against our natural instincts.

Equipment has become disposable. Products such as stereos, vacuum cleaners, and computers are so inexpensive and the cost of repairing or upgrading them so high that we routinely discard older products. Repairing old products often costs nearly as much as buying new ones--plus you can get more advanced technology by purchasing a newer model.

That is the idea behind some new thinking about paper machinery. In an article on page 25 of this issue, "Rethinking the paper machine," Bob Kinstrey proposes that we build paper machines to last no more than 20 years. Instead of using just concrete, steel, bricks, and mortar, be says we should consider using plastic, composites, and engineered materials and components that will last just long enough. Kinstrey notes that the technological "age of obsolescence" for a paper machine is about 10 years; machines operated longer are generally not competitive. If new paper machines can be built for substantially less than traditional machines, depreciated, then replaced, that may help paper companies recover their cost of capital.

Since the paper industry has struggled mightily over the past decade to pay for its capital investments, this is an idea worth developing. There has to be a bettor way than the "all or nothing" approach to building new paper machines currently in place in North America. Paper companies in Europe are said to already be embracing the "build and replace" strategy. Using faster depreciation schedules than their North American counterparts, as well as other financial incentives, European paper companies are replacing machines more rapidly and assembling a strong base of highly competitive machines--which themselves will be replaced in the next 10-20 years. That strategy is reportedly being applied at some of the North American mills acquired by European companies, where staffs have been reduced and maintenance deferred, perhaps in anticipation of replacing these production assets in the near term.

For the United States that would, among other things, require a change in thinking and a change in depreciation schedules (mandated by federal tax laws), However, it is an idea well worth considering--and debating. In fact, it will be one of the agenda items at a special "Rethinking the Paper Machine" session at the Paper Summit on Wednesday, March 6, from 8:00 a.m. to 12 noon, Room 167, at the Georgia World Congress Center. If you're interested, come on down!

ALAN ROOKS Editorial director; [e-mail]