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Particularly suddenly, near the speed of sound, it creates two new surfaces. And he balanced that. He did an energy balance and said, is my elastic strain energy greater than the energy of forming two new surfaces? And if it is, then I'll get a crack that runs catastrophically. If the strain energy is less than the energy to form some new surface, then I won't get a fast-running crack, okay. That's what it is. So it's when you're doing the energy balance, and you get these funny units, but the easiest thing is to just think of it as a bending moment, okay, opening up on this thing. So it's a stress times the crack length, except the crack length is to the three halves power in metric units, and it's to the half power in U.S. units, so who knows, okay. But the easiest thing is just think of it as a simple bending moment on a cantilever beam on the crack. But no, it has very strange units. The only thing that's convenient is mega-Pascal meters to the three halves is equal to 1.1 ksi square root of inch. So they're almost the same, so I don't have to do a lot of conversion. Within ten percent they're the same, okay.

Any other questions? Did I answer your question? Okay. I mean if you think about it, mega-Pascals is a force per unit area times the length would be a bending moment, right. This is not quite times just the length, it's times the length to the one-half power, but that's because of this energy balance that he did, and I can't remember how to go through it, but Griffith [Griffith] equating two energies. It's basically a thermodynamic analysis of energies being equal or whatever. Other questions? Are we on the tally? Where we go. Yeah, we are. Okay.

So let me start. We've only got two more days of lecture, and I'm going to do today with steel, and kind of the history and where it's come and why it's gotten to be a relatively low cost, high volume material. And tomorrow I'm going to go through glass because it's sort of the antithesis. It's a very brittle material that we use as a structural material, and all the things we do to glass to give it toughness, okay. And some of the history of how glass has changed over time. I always kind of liked the history part of things so far as that goes. Maybe I should have been a historian.

So I think we're down — this is posted on Stellar — to the presentation schedule. This is now last Thursday afternoon, rev 2, and I think I've accommodated the mistakes I made. And if someone, if you make a switch, just let me know. There are a couple of switches on here. There's actually only like five names that change position on here. And if you can't make the presentation for some reason, you can videotape the presentation and Dr. Belmar and I will watch them. We won't start presentations till a week from today. Dr. Belmar will be here the first two days because I'll be in South Carolina, but then I'll be doing all the rest of the days. But we're videotaping them and we'll watch them. And at some point Neil's going to tell you how to put them on. We're not going to just put them on YouTube for the world to see. Does that make some students even more nervous? In fact, does anyone know what the greatest human fear is? You know, it's not public speaking — it's, I think, acrophobia, or agoraphobia, anyway. Fear of public speaking is worse than spiders or rats — for Indiana Jones, right, or whatever.

Okay, so let's talk a little bit about steels. And I pointed out a number of times that steels have this sort of not unique but nearly unique position on a fracture toughness versus strength Ashby plot. That's way out here to the upper left, which is where you want to be, high toughness at reasonable strength. Actually, you'd love to be out here, straight out here, and steels are actually as far as you go out there. I mean, the way Ashby does the big envelope for metals, steels kind of lead the pack. Well, there are some specialty steels that are better than regular — and they're not even feeling — they don't even have that much iron in them — that have more toughness, but they're also extremely expensive and we don't use them in the same ways.

We talked about the ages of man — are known as the Stone Age, because that's what people used for tools, and the Iron Age, the Bronze Age. Today they say we're in the silicon age, but in terms of structural material, silicon's not a structural material. But you go back to the Stone Age and then you got into the Bronze and Iron Age, and in terms of structural materials we're still in the Iron Age. But in terms of — people like to think that in terms of economics that somehow we're in the silicon age, that information technology is a bigger business than is structural materials. Is that true? You might have an idea, and how would you measure it?

First of all, it's not true, okay, in terms of volume of material. Remember, steel's a trillion-ton industry — at a thousand dollars a ton, roughly, that's a trillion-dollar industry, which worldwide — what's the value of the world gross domestic product? It's somewhere 50, 60 trillion dollars a year. So two percent of the world economy is just making steel. And people would say, well, semiconductors go into computers and they have higher value, and that's absolutely true, but the value of semiconductors is not a trillion-dollar industry, it's about a three hundred billion dollar industry. It's about one-third the size of steel. And it's true, semiconductors go into things like computers and cell phones or other things, but steel goes into things like railroads and bridges and buildings and cars, and those are pretty large businesses too. So it turns out, in the long run, structural materials is still a larger business than is silicon. But silicon is a little more dramatic because you can get all these fancy things that we use all the time, and people really don't think about driving over a bridge unless it collapses while they're driving over it. Then they get all hot and bothered about it, but otherwise it's sort of taken for granted.

I wrote an article about that once about twenty-five years ago, that the materials industry — or the structural materials, I wasn't calling it the structural materials industry then, but — we don't get a lot of credit because what we've done essentially is a revolution, not in the number of transistors on a chip, but in productivity, or tons per hour of production. And in fact, we have come a long way in terms of tons per hour of production.

If you go back to — well, I'll go back to even earlier. There's this book which is from Penn State University, but it's a — there is a twelve-hour series on PBS that was done back in the 1990s or something called The Impact of Metals on the History of Mankind. Well, Penn State — I mean, Pennsylvania is a state that has lots of steel companies and whatnot. They're interested in the history of metals so far as that goes. But it turns out they talk about — well, about halfway through the history of metals — we can go back to the ancient times, but they start talking about the first energy crisis, which I've mentioned briefly before.

And if you look at some of the text in this thing, it talks about in Britain in the 16th century, the 1500s, the Weald today is a broad expanse of gently rolling hills and vales, but it was once dense forest with mature oaks, beech, and chestnut. Chestnuts were huge trees. We don't have many anymore because of the chestnut blight that occurred about a hundred years ago, wiped out the chestnuts in North America. But they were 200-foot-tall majestic beautiful trees, and they had them in England. By the 16th century the Weald was dotted with blast furnaces and forges, each surrounded by an expanding patch of cleared land. Why? Because in order to make iron — which some people would say was a military necessity, you had to make cannon so you could defeat those French or those Spanish — you had to make cast iron.

And to make cast iron, you take iron ore, you take carbon as charcoal, because they didn't have coal mines in the 16th century. They would take trees and they would burn them — big pile of trees, cover it with dirt, ignite them with a little — blow some air in the one end. In a rarefied atmosphere they would burn off all the organics in the wood and leave behind charcoal. So it's a rarefied environment — build a huge pile of trees, pack the top with the earth, you have a little chamber where you blow some air in the bottom, so it will burn slowly, heat up. And when you're all done, you put out — you starve it of oxygen, close off the inlet for the oxygen, and you put out the fire, let it cool down, take the dirt off, and you have a big pile of charcoal. And that charcoal can be used to reduce the iron ore — iron oxide — into carbon monoxide and iron metal. But it also has lots of carbon, so it ends up being an iron-four-percent-carbon alloy, which we know is cast iron. So they had blast furnaces that were reducing the iron ore with the charcoal, and they were making iron for cannons. Here's the cannons cast here, blah, okay.

Talked about also — to build one of these huge ships, the Victory, Nelson's flagship at Trafalgar, contained two thousand one hundred tons of oak, okay. They were wooden ships. So you had two competing sources for the trees in England. And then all of a sudden in the 16th century came along a third, which was to make glass. To make glass you also needed a very clean fire which was made with charcoal, okay. Now you might start with glass and other things — are sand and other things — but you still ended up with something needing charcoal.

So in 1558 a law was passed forbidding the felling of trees to make coal for the burning of iron, but the Weald of Kent and Sussex was excepted, just like politicians haven't changed, okay. They pass a law and say you can't do something, but all the lobbyists come in — talks about the lobbying of the iron industry got them to exempt the region where it was critical. So they're still tearing down the trees in the Weald, which was the middle of Britain. And then by 1581, which is just what, 21, 23 years later, the shortage of wood — well, first of all, the price had risen from a penny to two shillings. How much increase is that? What's two shillings in pence? 24 pence. 12 pence to a shilling. You didn't remember that, okay. Anyway, so a 24-fold increase in the price of wood. So this is just like the energy crisis we have with the Arab oil embargo.

By 1581 the shortage was so great that a further act was passed: you couldn't cut down trees anywhere within 22 miles of the Thames River, because that's where all the shipyards were for building ships, within 4 miles of the Great Forest of the Weald, or within three miles of the coastline anywhere, okay. So England was facing an energy crisis. And what did they do? Well, someone had discovered North America, and so they came over, and they built — the first iron mill was Saugus Iron Works.

And somewhere here I have something that tells a little bit about Saugus Ironworks. Saugus Ironworks, right up here in Saugus, Massachusetts. It's a national historical site. They have it rebuilt and you can go up there and you can see the iron master's house, which is a 17th century home. You can see the blast furnace they built, and they basically got that iron ore out of the bogs and neighboring swamps. They used oyster shells for their flux — they need calcium carbonate. Well, oyster shells are calcium carbonate. You don't have to dig a mine to get your limestone, just go to the original oysters that created the limestone. So they started making — and they could make eight tons of iron per week up here at Saugus. That was started in 1860, or 1642. It failed by 1688 as a result of litigation, nuisance suits, and the reduction of timber resources. They were tearing down all the trees around here too.

But other iron mills grew up in other locations. This is a book on the history of casting, a chapter on the history of casting. So this is the Chesapeake Bay, and there's all kinds of forges all up and down the Chesapeake Bay in the early 18th century, the 1700s. There was also Colonial Williamsburg and Jamestown down here. Anyone been to Jamestown or Colonial Williamsburg? Oh, okay. Well, I went to high school in Virginia Beach, and whenever someone come visit, we'd always take them up — my parents would, my mother would take them up to see Williamsburg, which is this old colonial town. I think it was the Roosevelts — anyway, some wealthy family decided to give lots of money to Colonial Williamsburg and they rebuilt a lot of the old — it was the capital of Virginia in the 1600s, 1700s, early 1700s, and they rebuilt it. It's right there at the College of William and Mary and stuff, and we talked about going up and seeing Williamsburg. But across — some about 20, 25 miles away — is Jamestown, which was the first settlement in Virginia.

Yep, it was both bar stock and some finished goods. So in one of these articles I've talked about, they developed up here in Saugus a way to cast iron cooking utensils in the dirt. So a guy figured out a way to make a mold in the dirt. And what they had — if you go up here to Saugus, they have the blast furnace, and the casting floor is just an earthen floor. And you — if you have your blast furnace, the thing is basically dirt up here. This is the top of the furnace and this is the bottom of the furnace. This is about two stories high, and they would take their wheelbarrows of charcoal and oyster shells and iron ore, and they dumped them in the top. And then at the bottom they actually had some — wasn't ceramic, but it was certain types of stone that were refractory stone that wouldn't melt. And the iron — the — you have this mess of oyster shell flux, carbon — coal, or — well, charcoal, I think.

But anyway, with your carbon from your wood and your iron oxide, Fe₂O₃ mostly, maybe some Fe₃O₄, and this stuff would get hot because the blast furnace would have a blast of air. They had a waterwheel going over this that had a bellows blowing air in here, just to keep it up to about a thousand, twelve hundred degrees Fahrenheit. You get molten iron on the bottom, and you have a little clay stop at the bottom, and about twice a day you'd go in there with an iron tool and you'd break open that stop and it would just run out on the casting wooden floor — not wooden floor, the dirt floor. Blast furnaces today at a big steel mill are not much different. They have a big wooden floor about 10 feet deep with wood — I thought wood, but dirt. But what's different is — it would run down, and they would just dig a trough in the sand or in the dirt, and then off that they would have other smaller little things. This would be the molds for the pig iron, okay.

Anybody know what this was called? This is a great big heavy thing, weigh about a thousand pounds. It's called the sow bar. What's a sow? It's a female pig. These are piglets. That's the pig — pig iron. This is a sow bar. The sow bar may later be forged into a cannon barrel, okay. But this would be a big heavy thing that would take horses and men to lift into the forge shop. The pig iron would be made into things that would go to some blacksmith. And there's a blacksmith shop up there at Saugus, and they would beat them, you know, into wrought iron and other things so far as that goes. So they were making cast objects. But then sometime they would have a little pot — I have a picture of the pot — I don't know that I have a picture of the pot they were making — I don't have a picture of it. But just simple little kitchen utensils, but I mean you've seen the bigger ones that they used to do their laundry, and they cook their soup in, you know, all kinds of things, right?

So it all came out of this one shop, and it was limited by how many trees were around. And if you cut down everything for 10 miles around, you had to move your forge somewhere else, your blast furnace somewhere else. And I estimated one time — this actually is a lecture on productivity, okay. I estimated if they were doing eight tons a week, that would probably be something like — at hand forging — and this time scale, let's go back down — if this is 1600s, hand forged, if people worked 60-hour weeks — you didn't get a lot of vacation time back then — that would be about one person-year per ton, 3,000 hours per ton.

And what happened — that stayed the same. From making cast iron — I'm sure there was some improvement, and I did this on a log scale, and probably got a factor of three productivity over the next couple of hundred years. And then a guy in Sheffield, England — I think it's Sheffield — Henry Bessemer came along in the 1850s, and Bessemer came up with something called the Bessemer converter. And we needed a Bessemer converter because we did not know how to melt steel. What's the melting temperature of steel? You might know. It's about 1500 Celsius. Yeah, it's very high. In Fahrenheit it's about 2,500 Fahrenheit.

So if I take a flame here — and this is something similar, but don't tell the Safety Office, okay — I take a piece of steel — [Tom applies a torch flame to a piece of steel.] I can hold it there all day long and it will not melt. Gets soft, but it won't melt. I can break it in two by — anyway. The temperature of that flame is around 2,100, 2,200 Fahrenheit. This melts at 2,500 to 2,600, okay. So it doesn't melt, just gets hot. And that's basically — this is hotter than the blacksmith's forge. Not a lot hotter — if he's got the bellows going and he's got charcoal in his forge, he can get to 2,000, 2,100. This is more like 2,300, okay, as the flame. But you could hold there all day with no stress on it and it will not melt. It might oxidize away back to the iron oxide, but it won't melt, okay.

So we needed some way to learn to melt steel, because there was no carbon flame — which was our source of fuel — that would melt steel. And so along came — and I guess I can use this, my old notes, handwritten notes — of the Bessemer converter. And the Bessemer converter was just a big vessel that you pour the cast iron — which is high in carbon — in here, and you blow the air in. And if you — the shape of the vessel was such — when you blew the cold air in, if you did it properly, the exiting hot gases, which were basically carbon monoxide, would preheat the air coming in. Now it wasn't a very efficient system, because two and one will mix together — you got to get oxygen in there to get the process going. But Bessemer showed you could get higher temperatures if you preheated your air. You get a higher temperature flame by preheating the air, right. And so Bessemer basically taught people in the 1850s that if you preheated the air, you could end up making steel.

Before that, the only steel we had — we had steel swords, but it had all been made by solid-state diffusion. Take iron ore and charcoal — the Japanese use — bury it in the sand on a beach and ignite it, blow some air into this thing, and you'd make sponge iron, called sponge iron, because it's much a hollow metal that looked like a sponge. And a blacksmith would take that, heat it up, and pound it into something solid, and it would make swords. And those swords were very valuable. Took thousands and thousands of person-hours per ton to make those swords. And it was an important part of their economy.

Well, along comes Bessemer, and we have this tremendous drop in person-hours per ton. And we got to Andrew Carnegie and economies of scale, and we were probably in the 3,200, no, in the — well, anyway, about a factor of 30 increase in productivity. And along comes someone called Andrew Carnegie. He becomes the richest man in the world, richer than Bill Gates today in constant dollars, by starting big steel companies where they were building railroads in the United States, okay. Andrew Carnegie was a Scotsman.

I have a story about Andrew Carnegie and my grandfather. Turns out my grandfather grew up in the South in the Civil War — he never got much education. He was trying to start the University of Chattanooga, Tennessee — he'd been mayor of Chattanooga — and he needed $25,000 because one of the Roosevelts — he'd given them a $250,000 challenge grant — they needed a half-million dollars to build this university. And they'd raised all the money they could in Tennessee. And my great-grandfather, who had been Secretary of the Treasury, was in New York, and he knew Andrew Carnegie. Got an appointment for my — for my grandfather with Andrew Carnegie. My grandfather went to see Andrew Carnegie and said, well — he said we'd like you to give us the last $25,000 which will make our — with Rockefeller's quarter-million-dollar challenge grant we'll be able to build the University of Chattanooga or the college or whatever. And Andrew Carnegie says, well, I tend not to dabble in Mr. Rockefeller's charities. And as he's showing him to the door, my grandfather was saying, well, people in the South really need some education. The South was a very poor disadvantaged area at the time after Reconstruction in the Civil War. And Andrew Carnegie looked at him and said, sir, how much education do you have? My grandfather said, 13 months. And Andrew Carnegie said, come back tomorrow, I'll give you my answer.

And he came back the next day — a little bit longer story — and there was the check for twenty-five thousand dollars. That Andrew Carnegie had left to go to Pittsburgh, but the secretary gave him the check. He said, Mr. Carnegie wanted you to know that he also had only thirteen months of education, okay. Andrew Carnegie funded a lot of universities. He was very big as a philanthropist on education. And my grandfather, in his autobiography, said he figured if he had 12 or 14 months and not 13, he probably wouldn't have gotten the money, because he and Andrew Carnegie both had 13 months of education. He got the money and started the university anyway.

But there was this big drop from Bessemer to Carnegie, and then the next big drop, which was another factor of a hundred or so, came a little bit later with — well, Andrew Carnegie had built huge things which are called basic open-hearth furnaces, where you'd have — take you a day or two days to melt two or three hundred tons of steel in a big furnace. And to preheat the air, you'd have a bunch of brickwork. You'd have two of these on either side of the basic open hearth. And this brickwork was a big latticework, sort of like a big sponge, about half the size of a football field and about two or three stories tall. And you would bring in — get the — when you start up your furnace — and these things would run for a couple years at a time — you start up your furnace and all the exit gases would go out cold brickwork, heating up the brickwork as the exit gases. And about once or twice a day you would switch the flow, and now the hot — the cold air would come in through the hot brickwork and exit through the cold brickwork. And you just keep oscillating between the two brick works, which were the preheaters for your air. And it took about 24 hours to melt a couple hundred tons of steel.

Then after World War II, some guys in Austria decided there was another way to do it if they used pure oxygen. And so today we have what's called the basic oxygen furnace. This was the basic open hearth, and they got as large as 400 tons. U.S. Steel built one of these in the early 1970s, basic open hearth of 400 tons. In the meantime, in the 1950s, this little firm in Austria decided to build a water-cooled copper lance and a vessel that looked not all that different from Bessemer's. And you put a 50 tons — or today it's about 300 tons — of cast iron that comes out of the blast furnace, and you would blow a supersonic jet of liquid oxygen — actually you're blowing liquid oxygen, but by the time it heats up and comes out, it's a supersonic jet of pure oxygen. And you can burn all the carbon out of that cast iron.

Here you're burning carbon out of the cast iron — here you're burning carbon out of the cast iron — here it takes 24 hours, plus it's just a surface reaction. Here you're hitting it with a supersonic jet, and the steel and flux form a froth. And this vessel has the volume about five times the volume of the liquid. And when you hit it with that supersonic jet, you form this foam of molten steel and limestone and coal — or you're burning the coal out of there with the oxygen — and you can refine everything in 20 or 30 minutes, burn all the carbon out in 20 or 30 minutes. So today we can make the steel in 20 or 30 minutes in this froth of pure oxygen.

This is another example — I told you about the glass factories, the beer plants. They build them right next door to the beer plant, as you can't transport the empty bottles very far. They build the liquid oxygen plant right next to the blast furnace, because you're pumping in liquid oxygen. This consumes — I don't remember — it's over ten percent of all the liquid oxygen produced in the world. I mean, they just liquefy air, you know, distill it, so you have liquid argon, liquid nitrogen, liquid oxygen. The liquid oxygen is mostly used to make steel, used for some other things. The liquid argon is extremely valuable. And the liquid nitrogen is a waste by-product, which we now use to freeze broccoli and green beans. And you need a cheap source of refrigeration, and a lot of it — you have all the liquid nitrogen you want at about twenty cents a liter, okay, because it's a by-product of making steel. And liquid argon is a by-product, but it costs like 10 or 20 times as much because it's more useful, okay.

So that's how we've tremendously increased the productivity of melting, or making, refining steel. But we also did several other things at the same time that brought it down till today. The amount of work that's necessary to make a ton of steel is about 20 minutes a ton, okay. Back when I made this ten years ago, or seven or eight years ago, it was about a half an hour a ton, but now anyway it's about 30 minutes a ton, or 20 minutes a ton now, of labor cost. When I worked for a steel company in the mid-70s, half the cost was labor, half was raw materials. Today it's almost all raw materials. Iron ore comes from Brazil and Australia, coal comes from all over the world, the limestone is all over the world. Back in the old days everything was labor-intensive. Today, because of the productivity gains, making steel is mostly a question of raw materials. And as a result, the price of steel today is less in constant dollars than it was 25 years ago, because productivity has gone up so quickly.

And if we look at other things that occurred in the steel industry — you have this converter, and then if you want to make a really clean, really clean steel for aerospace engines and nickel-based alloys or aerospace engines, we do something called argon oxygen decarburization. So you can only get the carbon down to about 30 parts per million here — 300 parts per million, sorry, 300 parts per million here. If you want to get it down to 30 parts per million, you can blow some of that argon through there. And I can remember in the early 70s when I took thermo in this department, Tom King had us calculating the argon oxygen decarburization process. Why? Well, it had been invented right here at MIT, in the basement of building 8.

There's the — this is a picture of the basement of building 8 about 1920, right after — well, after that, my team moved over. This is what the basement of building 8 looked like. It was a two-story high bay. The Nano Lab on the Infinite Corridor was up here in space, right here on the first floor. And it wasn't until 1962 the Ford Foundation gave them the money to make this — to take this, make this not a two-bay area, but they basically — they had little furnaces here. And when you went to the lab, this is the lab you would go to a hundred years ago at MIT, and you learned how to make steel or cast iron or something else, or you might learn to assay for gold.

This is — out of the same book — this is a mining engineering and metallurgy courses of study. This is — I think this is 1888 or something, okay, at MIT. And, yeah, take physics, take German. Why'd you have to take German? Because that's where all the science was done until after World War II. The great science nation of the world was Germany. Where did all the quantum mechanics guys — Planck, you know — not all of them were German. De Broglie was French, I guess. And there were Danish and things. But all the great science was done over in Europe, and mostly in Germany.

And why did it all of a sudden switch after World War II over here? Because we imported all those scientists after World War II. We left them in Europe starving, and we said, here, come over here, Wernher von Braun, we'll give you a home in Huntsville, Alabama, and you can build rockets, okay. We did that to hundreds of the top German scientists, and that helped cement the United States as the one of the leaders in science today. Well, the other things were fairly similar, but somewhere in here — I don't remember — but it said fire assaying. Yeah. If you were going to be a metallurgist graduate from MIT in 1888, you had to learn how to assay and measure the chemistry of metals so far as that goes.

So in any case, the steel industry grew, but several things happened. There was AOD, the argon oxygen decarburization process, that the basic science was done under John Chipman back in the 1950s by a guy named Krivsky [Krivsky]. But it was basic science of steelmaking, and he didn't really invent the process until he went to a small steel company and they invented the AOD process. And virtually 99 percent of all stainless steel made today is made by the AOD process, which was at its roots right here in the bottom of building 8.

And they do other things to de-gas the steel, and then they cast the steel into a ladle, and then into a holding pot called a tundish. And you have this seven-story building with the ladle, the tundish, and you cast the steel into a water-cooled copper mold. So here's the — you can pass it into an ingot mold, but we won't talk about that right now. We still do that with about five percent of the steel. But ninety-five percent of the steel is continuously cast — water-cooled, vibrating, water-cooled copper mold. Here's the tundish up here, the steel drops down in here, water-cooled copper, it solidifies the skin of solid steel, and that skin of solid steel is held by some rollers, and it's got water spraying on it for seven stories. And because it's solidifying hot steel, you can bend it with those rolls, turn it so it goes horizontal, and you can continuous cast. The Japanese have run continuous casters for three or four years continuously, never stop, okay.

This changed things from getting about 67%, 65% yield. When I worked at Bethlehem Steel, most things were ingot cast — great big cast iron ingot, may weigh three or four hundred tons. And then you'd pour the steel in here, and as it solidified, you would get a pipe. As everything solidifies, the grains grow in from the sides on the steel ingot, and you get a pipe, and you'd have to cut off the top third, send it back to the melt shop, remelt it. But with the continuous caster, you fill this up continually, and instead of sixty-five percent yield — which is what — you sell 65 pounds out of a hundred pounds that you might cast — you now sell 97 pounds out of a hundred.

And there was a guy who was an MIT grad when I was at Bethlehem Steel — he was just under vice president, he was in charge of yield improvement. They would have killed for one percent improvement in yield from sixty-five percent to sixty-six percent. Tremendous amount of profit. You could get twenty or thirty percent increase in profitability of the company if you could just get a one percent improvement in yield. And this guy was in charge of doing whatever he could across this multi-billion dollar company to try to improve that. But with continuous casting, which was perfected by the Japanese in the 1970s, you could go to ninety-seven percent yield, thirty percent increase. And all of a sudden, all the old ingot casting shops were dinosaurs.

The new steel mills were very productive, and what happened in the 1980s — employment in the steel industry dropped from a half million people to 250,000 people. Not because it was a dying industry, but because between the BOF process that really took over in the 60s and continuous casting which took over the 70s, the steel industry doubled its productivity within a 20-year time frame. And we have an excess of steel mills in the world. And what did the steel companies in the United States do? U.S. Steel, Bethlehem Steel, they'd sell one of their old plants to some third world country, and they wouldn't realize that ten years later that third world country would have dismantled that plant weighing thousands of tons, shipped it to their country, and they would be shipping steel back into the United States with their little labor rates, okay, and killing the U.S. steel companies in the marketplace.

In the meantime the Japanese had enough profitability they were building brand new steel mills. The Koreans decided to build a steel mill — actually it was the premier of Korea said, if we're going to be a major shipbuilding country — this is the 1970s, early 1970s, I think 1972 — they needed to produce steel, they couldn't just always buy it from the Japanese. Koreans hate the Japanese — they were slaves to the Japanese all through the 1930s, okay, so it's not exactly a lot of love lost there. But in any case the Koreans decided — they partnered with U.S. Steel. U.S. Steel gave them the engineering. They built a company with the government of Korea, okay. Back in — and the guy who was put in charge of it was Colonel Park, who worked for President Park, who was the premier of Korea. Colonel Park built POSCO Steel. I used to be the POSCO professor, because in the early — in the late 90s, so 30 years, 25 years later, POSCO Steel became the world's largest steel company, larger than Nippon Steel, okay.

They built a brand new steel company in 1972. Building a brand new steel company is a 15 billion dollar venture. It's the same thing as Intel building a new ultra-fine-scale fab shop. It's the same as Boeing deciding to build a 787 Dreamliner. These 15 billion dollar investments will sink a company if they're not successful, okay. Bethlehem Steel built the last large-scale steel mill in the world financed by a private company in 1968, '73. They built Burns Harbor in Indiana. Bethlehem was the second largest steel company in the world at the time. They almost went bankrupt until the steel company finally started producing higher productivity with the newer equipment. And Burns Harbor in Indiana is still going — most efficient steel mill in the United States, 'cause it's the newest one in the United States. There have been other steel mills in other parts of the world, but every one of them was just like the Koreans — was just like the Japanese — they were funded by entire countries. It was a whole country. It wasn't an individual company. When Intel wants to build a new fab, or Boeing wants to build a new airplane, they have to fund it themselves. But the steel industry — basically it's just commodity product.

And everybody thought — all the investors thought — this is a dead product. I mean, the guy who just stepped down as department head in this department is now Dean at Rice University. He was saying 20 years ago that steel was dead. Okay, he was in polymers, okay. He didn't understand the scale of — steel wasn't dead. It wasn't profitable all through the 1980s, it was losing money, why? Had a tremendous overcapacity in facilities. They doubled their productivity between the BOF and the continuous caster and a few other things, and the workforce employment was cut down by half because productivity had doubled. And to people in Washington, that meant it's a dying industry, it wasn't employing as many people. Well, when you have increases in productivity of that scale, that magnitude, over that short a period of time, there are tremendous disruptions, okay. But the steel industry was actually doing wonderful things.

And it turns out there was one guy, graduate of this department, named Dick Simmons. Anybody here live in Simmons Hall? Okay, but it's an undergraduate dorm down here, okay. And Dick Simmons graduated from this department in like 1952. He went to work for a steel company. Eventually he became president of Allegheny Ludlum Steel, and through two leveraged buyouts in the 1980s he became a half-billionaire. And then in the 1990s his son-in-law took that half billion dollars and through venture capital made him a billionaire, okay. So Dick Simmons is worth a lot of money. He's a very nice person, very humble guy. He dropped in my office when his — the department head once asked, how the department's doing? I said, fine, and asked him where he's going. He had been here for an MIT Corporation meeting. I said — and he was going home, and said, you need a ride to the airport? He said sure. And so I went down, got my car. He very sheepishly said to me, Tom, we're not going to the main terminal — oh, we're going to general aviation. So you got your own plane, right. And he was very embarrassed that he happened to own his own plane, okay. He was a billionaire, okay. But he's a very — I wouldn't say he's a humble guy, but he was very modest in his — he said he never expected, his wife never expected, they would be so wealthy.

But turns out Allegheny Ludlum Steel never had an unprofitable quarter in the entire decade of the 1980s when all the rest of the steel companies in the United States were losing money hand over fist. The reason was Dick Simmons understood the technology. And I had to deal with a blast furnace failure at Allegheny Ludlum once — a blast furnace — it was a BOF failure — back, no, it was the AOD, it was an AOD failure — anyway, it was the bearing in the AOD, and I had to go to the plant. The hourly workers loved Dick Simmons. They hated most of the rest of the management, but they revered Dick Simmons, okay. He was the hourly workers' hero so far as that goes.

There's another guy, graduate of this department, who helped with some of these types of transformations, innovations in the steel industry, and that was Gordon Forward. And Gordon Forward worked for John Elliott, who had been one of John Chipman's students, and John Chipman was kind of the father of scientific steelmaking in the world. And I don't know if this is going to work, but — so in the 1970s a few people in the world — Gordon Forward was Canadian, but some people up in — realized the price of scrap steel on the world market was about a hundred dollars a ton. The price of pig iron was about two hundred dollars a ton. So scrap steel was cheaper than iron, and they said there's got to be some money to be made for a hundred dollars a ton.

And so they invented what's called a mini mill. And the mini mill is an electric furnace steel mill — we don't have to go into all that, I probably done it on one of my other lectures. But one of these mini mills is a place called Chaparral Steel down in Texas. Gordon Forward became president of Chaparral Steel, very innovative manager. He won a Manager of the Year award by the American Management Association for the way he ran Chaparral. And in any case, they used to send their mill workers one week a year — they had to go with the salesman to talk to the customers. And they found out steel reinforcing bar that goes in concrete, the three-eighths inch diameter — the smallest diameter — got a premium price because it was so small. Because when you're hot rolling the steel, you could only roll it so fast — you're going at 60 miles an hour, and you try to go faster — everybody in the world tried to go faster, and they couldn't do it.

And so the guys at Chaparral find out about this price increase in the market. They go back to the mill, they try to speed up just like everybody else, they fail. And then one of them says, well, instead of going faster, what if we went slower? We rolled it slower. So this is a picture of Chaparral — one bar coming in and two bars coming out of the same mill. They split it in two in the rolling mill. And if you keep going to the next picture — if I have it here — show me another half — I don't have it here. Anyway, I've lost it, okay, doesn't matter. They split the two in 24 — into four at the next mill stand. And so they were going half the speed, only 30 miles an hour, but they were getting four strands out at half the speed, which means double productivity. And they took over that business, made lots of money, okay.

And I could tell you some other stories about Chaparral. Yeah, wait, the thing here it is — one's on the board and one's here. This is — I haven't lost it, here it is. There's the two strands at the bottom going in and four strands coming out at the top, okay. So to look at the whole middle, you have to put these two together. So sometimes innovation means not by trying to do the same thing that everyone else has failed to do and thinking the same, but trying to do it differently and thinking the opposite. In this case, how to go slower rather than faster allowed you to — your real goal was to get more product out the door faster, not how fast it traveled in a single strand, but how fast four strands traveled.

So those are some of the stories. Over the last 50 years the steel industry in the world has undergone a tremendous — actually 60 or 70 years — a tremendous transformation. It's not the stodgy industry everyone likes to think. I told you the story about this guy in — this guy in India who was not stupid, and he knew that the U.S. Steel and Bethlehem Steel were selling their plants for ten cents on the dollar trying to modernize. He went out and bought the plants at ten cents on a dollar. Burns Harbor in Indiana is now an ArcelorMittal steel — Bethlehem bankrupt. This Indian is worth — he's a multi-billionaire — because he went out in the 1980s and 1990s when Wall Street said steel's a dog, okay. He knew it wasn't a dog. Might not have been making money, but it had to come back when the overcapacity in production went away.

So tomorrow I'll talk about glass and some of the changes in the glass industry, okay. That's it. Thanks.