Big steel companies decline through market abandonment

Bethlehem became the second-largest steel company in the world by learning to roll structural I-beams, enabling 100-story buildings (vs the previous 10-story limit with riveted construction). Tom's first employer.

Remember I said there are structural materials and functional materials. Structural materials are made in very large volumes. You're not going to make steel I-beams by additive manufacturing. You can make them by rolling. That's how Bethlehem Steel — now defunct, that was the first company that hired me — became the second largest steel company in the world, because they learned how to roll I-beams, and they built New York City. The tallest building before Bethlehem could roll I-beams was about ten stories, because you had to make riveted I-beams. When they learned to roll them on the mill, all of a sudden, a cheap process to make I-beams, efficient use of steel — you can go up 100 stories. Some people consider that rolling of structural shapes was the technology that built the second largest steel company in the world. Bethlehem had two technologies. One was structural rolling. The other, they came up with a type of tool steel that machined better than anything else, very high hardness, and they got a patent on that.

An early-1990s study found that essentially zero of the major steel-industry process innovations over the prior 75 years originated within steel companies. AOD came from gas-supply companies, continuous casting from machinery vendors, BOP from oxygen suppliers. Tom attributes this to complacent post-WWII US steel management — including the Bethlehem Steel executives whose Learjets at Allentown airport existed to ferry them to Florida golf weekends.

So something initially developed at MIT — but it also brings up an interesting point. Someone did a study in the early 1990s of how many innovations in the steel industry were brought about by the steel industry, and essentially it was zero. Things like argon oxygen decarburization were done by a company that wanted to sell oxygen to the steel industry, and argon — the gas companies saw this as a way to sell more gas to the steel companies. Continuous casting was really brought in by companies that wanted to sell machinery to do the casting. The basic oxygen furnace was brought in by companies that wanted to sell the gas, pure oxygen, as opposed to air. No one can sell air. It's pretty free.