Reminds me of the Wright Brothers. After their incredible invention of controlled heavier-than-air flight (using a wind-tunnel - did they invent that too?), the focus was on patent royalties, while others innovated.
"No inventions; no innovations" A History of US Steel
21–30 of 249 posts
Re: "No inventions; no innovations" A History of US Steel
#22I'm happy to see the link here as I was curious about the subject given that my career started in US Steel's data center in Pittsburgh. I'm saddened by the fact that this retelling seems mostly negative and ignores a large part of US Steel's evolution into USX. The retelling is subtractive whether you view Marathon Oil's involvement as a positive complementary asset play at the time or a negative given the history of…
I don’t doubt you at all, but what kind of innovation was there?
Did it tend to be strategic or tactical?
How closely was tied to their core competencies?
How many innovations were industry firsts?
What percent impact did they have on profits / growth / market share?
From the article it sounds like innovation and investment were consistently blocked by short term financial goals.
I can easily believe there were lots of very smart people, with transformative ideas, that were never given a chance to thrive.
Re: "No inventions; no innovations" A History of US Steel
#23Earlier quoted context omitted.
Although it's true, that's a hazardous way of thinking. If they had put more of their focus on making steel, keeping up with the technological advances rather than being dragged along grudgingly, perhaps they'd be making more money these days.
It's a very successful strategy in any corporate. Focus on the books, produce results, take the bonus and then jump. When things go pear shaped do not be found holding the bag. If later questioned: "it was all great when I was there, it's so sad that it went south - it was a great place and there was a lot of value on the table." Strangely the big investors don't seem to ever cotton on to this - the big pension funds…
The oposite is true as well so: don't focus on the books, bottom line and so on and the company goes bust as well.
Any successful company has to do both.
Re: "No inventions; no innovations" A History of US Steel
#24Wasn't US Steel who commissioned the books from a SciFi illustrator to ensure that lots of reference drawing illustrations would have steel in the future and got these books for free available to anyone who called, and they ended up getting famous in the film industry so people ended up always designing futuristic movies with things made of steel like ships and vehicles?
Yes you are thinking of Syd Mead - here’s the series https://sydmead.com/category/gallery/us-steel/
Gotta say, I'd live in that steel modular house in a heartbeat.
Re: "No inventions; no innovations" A History of US Steel
#25Earlier quoted context omitted.
Although it's true, that's a hazardous way of thinking. If they had put more of their focus on making steel, keeping up with the technological advances rather than being dragged along grudgingly, perhaps they'd be making more money these days.
It reminds me of that old quote that democracies die when the citizens realize they can vote themselves money. It's the same with these companies, the upper managements realizing they can just give themselves more money and coast on their companies momentum. It's not the innovators dilemma, it's the c-suite lines their pockets while the company burns dilemma.
It's the eternal principal/agent problem. Those things go in cycles. When management goes too far off the rails then corporate raiders and private equity eventually take over to replace management and unlock latent value. Unfortunately, the managers who caused the problem still often end up fabulously wealthy while regular employees get screwed.
This problem can be somewhat ameliorated by compensating executives primarily using equity with long vesting or lock-up periods. That keeps their interests aligned with long-term shareholders.
Re: "No inventions; no innovations" A History of US Steel
#26Reminiscent of the business school joke - What does US Steel make? The answer is not "steel", but "money", that being the point of any company.
Had a thought the other day, that the natural course of many businesses is towards becoming a bank and eventually a casino. If it were Pokemon, all corporations final form would be casinos with executives gambling investors money.
It fits the economy surprisingly well. Harvard, arguably a bank not a school. US Steel, joke is they produce money not steel. Airlines are trying to avoid flying airplanes, and operate air miles banks. Hasbro no longer produces toys, only money. Article today where the main commentary on Intel was the finance bros took over a long time ago.
Re: "No inventions; no innovations" A History of US Steel
#27Earlier quoted context omitted.
Although it's true, that's a hazardous way of thinking. If they had put more of their focus on making steel, keeping up with the technological advances rather than being dragged along grudgingly, perhaps they'd be making more money these days.
It's a very successful strategy in any corporate. Focus on the books, produce results, take the bonus and then jump. When things go pear shaped do not be found holding the bag. If later questioned: "it was all great when I was there, it's so sad that it went south - it was a great place and there was a lot of value on the table." Strangely the big investors don't seem to ever cotton on to this - the big pension funds…
This comment reads like it was written in the 70s. Even with the interest rate hike, this is still the age of VCs with infinite pockets, companies that don’t plan on going profitable for decades, every company in sp500 throwing money in the AI money hole, etc.
Re: "No inventions; no innovations" A History of US Steel
#28Steel remains a technology with huge potential for future development. Some keywords: eutectic solution, bulk metallic glass, and boron steel. It seems crazy to me that any first world nation would let it's steel production fall into foreign hands. As a machinist for 5 years in my country I would have been excempt from military service even in total war. If US steel is unable to innovate and foreign ownership is some…
America has started to have the appearance of griefing their own enlisted. I'm not sure if America actually cares about those types of war and military considerations any longer. Have you looked at ship construction times lately?
On the materials side. Totally agree. However the issue there, is that's not what corporations tend to optimize. The story itself really spells it out pretty clearly (it may be biased, never worked at US Steel personally). However, the article's description is:
US Steel became a monopoly, and immediately acted like a monopoly. Innovation ceased. Money extraction began. Commanding obedience was the norm. Convincing themselves all competitors would fail was the norm. And US Steel did not want to invest in anything outside its own sunk costs.
Re: "No inventions; no innovations" A History of US Steel
#29Reminiscent of the business school joke - What does US Steel make? The answer is not "steel", but "money", that being the point of any company.
Had a thought the other day, that the natural course of many businesses is towards becoming a bank and eventually a casino. If it were Pokemon, all corporations final form would be casinos with executives gambling investors money. It fits the economy surprisingly well. Harvard, arguably a bank not a school. US Steel, joke is they produce money not steel. Airlines are trying to avoid flying airplanes, and operate air…
Car companies making their money off of financial instruments only loosely related to the cars people drive off their lots ...
Re: "No inventions; no innovations" A History of US Steel
#30One of the ideas that seems to be missed from the study of history and economy, was the effect on the total destruction of the Japanese and German industrial base - during WWII.
Britain and USA, were left with their archaic industrial systems.
After WWII, the Japanese and the German steel industry had to be completely reborn.
(At the cost of primarily USA financing.)
Those two countries had no more relics of the past, and started over, necessarily, with the most modern technology and science.
North American industry was in a slow evolution from the 1900's, but Germany and Japan, had a hot start from the 1950-60's. No wonder everyone was impressed by their modern approach to construction, design, manufacturing, which more or less started to out perform USA and Britain in the 70's.
China, started it's industrial rebirth even later.