U.S. Steel Industry Overcapacity Crisis

Direct consequence of the continuous casting yield jump. Frames the lecture's argument that productivity gain ≠ industry health.

What happened to the steel industry — several things happened, but one of the things is, all of a sudden in a 10-year period you were producing one-third more steel than you needed in the casting shop, because you switched to continuous casting. All of a sudden your capacity in all your plants around the world is 50% larger than you need. There was a tremendous overcapacity because of continuous casting. Here is a wonderful development, but it nearly bankrupted the steel companies because they started competing with each other on price for the market because they all had excess capacity. The world decided the steel industry was a dying industry when in fact they had just had a huge gain in productivity, but that gain in productivity almost bankrupted them. Think of the irony. The moral of this story is, you have to be careful about what you wish for. Big disruptive changes in technology can be very painful.

---