`Sub-Zero refrigerator hinge failure`

Tom's consulting case. Sub-Zero (twelve-thousand-dollar refrigerators) had a TIG-welded hinge pin made by a subcontractor from free-machining sulfur-bearing steel; sulfur formed iron sulfide and the welds cracked. ~3000 units repaired in the field at ~$7 million. Used as the headline example of the design/fab/field 1:10:100:1000 cost-of-failure escalation, and the example that wealthy customers are litigious.

Now you can add other things to it. 303 — add selenium or sulfur. 303 is add sulfur, 303 Se is a designation for selenium, which you don't see very often. Sulfur will embrittle the steel and makes it non-weldable. Anybody know what a Sub-Zero freezer is, or refrigerator? My son bought a house and had one. It's a twelve-thousand-dollar refrigerator. Top-of-the-line. So I had a problem with Sub-Zero. They had a little bracket on the hinges for the door, and it was supposed to be carbon steel to carbon steel, and then they did a little TIG weld for this pin, and the pin was part of the hinge for the door. Someone made the pins for them and they welded them but they didn't notice that they were getting little cracks. Someone had machined the pins out of a free-machining steel which had extra sulfur in it. So they had these little cracks. They sent the refrigerators out there and they had to go out and repair like 3000 of them in the field.

Physical sample (the hinge from his son's $11,000 refrigerator). Used to illustrate the low-value-per-pound end of the materials market — plain carbon steel.

On the other hand, we have railroads and shipping, where things are worth about 20 cents a pound to transport. [Tom shows a refrigerator hinge.] This is part of a Sub-Zero refrigerator. Anybody have a Sub-Zero refrigerator at home? Only cost $11,000. Nice refrigerator, keeps the lettuce crisp because it has separate humidity control top and bottom. My son has one — he bought a house that had one. That's the hinge — just plain old carbon steel. You can't spend very much on refrigerators. In fact General Electric just sold Appliance Park — anybody see that in the news earlier this week? Appliance Park, outside of Cincinnati Ohio, is General Electric's huge appliance manufacturing facility — they've had it for 40 or 50 years. They make Sears Kenmore, they make all kinds of brands, but it's all General Electric at that plant. General Electric essentially manufactures for buy by everybody else. So there's a wide range in the value of materials.