3.371 Structural Materials Selection – Spring 2016 [11/12]

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 Cabot’s profitably 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 and its units so who knows okay it but the easiest things just think of as a simple bending moment on the on a cantilever beam on the crack but no it has very strange units the only thing that’s convenient is mega fast meters to the three halves is equal to 1.1 k SI square root of n CH 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 Pascal’s 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 they link to the one half power but that’s because of this energy balance that he did and I can’t remember how to how to go through it but yorick waiting to energies it’s basically a thermodynamic analysis of Energy’s being equal or whatever other questions are we on the tally we go yeah we aren’t okay so let me start we’re gonna 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 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 I there 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. Bell more 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 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 how does that make some students even more nervous in fact does anyone know what the the the greatest human fear is you know there’s not public speaking it’s called acrophobia I think or agoraphobia anyway fear of public speaking is is is worse than spiders or rat rats for Indiana Jones right or whatever ok so let’s talk a little bit about steals and I pointed out a number of times that steals have this sort of not unique but nearly unique position on a strength 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 steals are actually as far as you go out there I mean the way ash we do the big envelope for metals steals kind of lead the pack well there are some specialty steals that are better than regular in there not even feeling 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 use for tools and the Iron Age the Bronze Age that today they say we’re in silicon age but in terms of structural material silicon 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 its first of all it’s not true okay in terms of volume of material remember steals a trillion ton industry and at a thousand dollars a ton roughly that’s a trillion-dollar industry which worldwide what’s the value of of the world gross domestic product it’s sweat 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 who are 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 taking for granted I wrote an article about that once about 25 years ago that the materials industry or the structural materials I wasn’t calling 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 on productivity or tons per hour of production and in fact we have come a long way in terms of tons of hours 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 it’s a theories of 12 hours on PBS that was done back in the 1990’s or something called the impact of metals on the history of mankind well Penn State’s I mean Pennsylvania is a state that has lots of steel companies and and whatnot they’re interested in the history of metals so far as that goes but it turns out they like to about halfway through the history of metal so 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 fifth in the 16th century the 1500s the weld today is a broad expanse of gently rolling hills and vales but it was once dense forest with mature Oaks beach and chestnut chestnuts were huge trees we don’t have many more because of the chestnut blight that occurred about a hundred years ago wiped out of the chestnuts in North America but they were 200 foot tall majestic beautiful trees and they had them in England to buy the 16th century the weld 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 of 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 their earth you have a little chamber where you you blow some air in the bottom so it will burn slowly heat up and when you’re all done you put out you’ve you starve it of oxygen close off the 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 or 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 war with the charcoal and they were making iron for cannons here’s the cannons cast here blah blah 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 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 class 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 the needing charcoal so in 1558 a law was passed for hitting the following of trees to make coal for the burning of iron but the weld of kent and sussex was accepted 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 accept the region where it was critical so he’s still tearing down the trees in the weld 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 and pence 24 pence 12 pence to a showing you didn’t remember that ok anyway so at 24 fold increase in wolf price of wood so this is just like the energy crisis we have with the oil 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 4 miles of the Great forest of the weld or within three miles of the coast line anywhere ok so England was facing an energy crisis and what did they do well someone who 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 Argus ironworks right up here in Saugus Massachusetts it’s a national historical site they have it rebuilt and go up there and you can see the iron masters 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 moister shells for their flux they need calcium carbonate well I oyster shells or calcium carbonate you don’t have to dig a mind to get your limestone and 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 Ogden saugus that was started in eighteen sixty or 1642 it failed by 1688 as a result of litigation nuisance suits in the reduction of timber resources they were 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 for jizz all up and down the Chesapeake Bay in the early eight century the 1700s there was also Colonial Williamsburg and Jamestown down here anyone been to Jamestown or Colonial Williamsburg oh okay well I grant to high school in Virginia Beach and whenever someone come visit we’d always take them up you know my parents would my mother would take him 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 in the 16 1700s early 1700s and they rebuilt it and it’s right there at the College of William and Mary and and stuff and we talked about going up and seeing Williamsburg but across some about 20 25 miles aways Jamestown which was the first settlement in Virginia yep it was both bar stock and some finished goods so in one of these articles have 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 a 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 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 royster shell flux carbon coal or cold but we thought was 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 go in there with an iron tool and you’d break open that that stop and it would just run out on the casting wooden floor or not wooden floor the dirt floor blast furnace is today at a big steel mill are not much different they have a big wooden floor about 10 feet deep with wood I thought would 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 wait about a thousand pounds it’s called the sau baar what’s this out it’s a female pig these are piglets that’s the pig ow iron this is a salvar the salad bar may later be forged into a cannon barrel okay but this would be big heavy thing that would take horses and men to lift into the ford shop the pig iron would be made into things that would go to some blacksmith and there’s a blacksmith shop up there saugus and they would beat them into you know into wrought iron and other things so far as that goes so they

were making cast objects but then some time today with 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 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 1 1 chopped 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 forward somewhere else your blast furnace somewhere else and that I estimated one time this actually is Electra or productivity ok I estimated if they were doing eight tons a week that that would probably be something like at hand foraging 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 for 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 think is Sheffield doing 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 steel you might know are we it’s about about 1500 Celsius yeah but yeah it’s very high 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 ok I take a piece of steel I can hold it there all day long and it will not melt get soft but it won’t melt I can break it in two by Teague anyway the temperature that flames around 20 to 2,100 2,200 Fahrenheit this melts at 2,500 to the ok 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 he and he’s got charcoal in his Forge he can get to 2000 2100 this is more like 2300 ok 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 ok 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 hiring 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 pre heat the air coming in now it was a very efficient system because too and we’ll mix together you got to get oxygen in there to get the process going but Bessemer showed you could get higher temperatures if you pre heated your air you get a higher temperature flying by preheating there right and so Bessemer basically taught people in 1850s that if you pre heated the air you could end up making steel before that the only steel we had we had steel we had steel swords but it all had 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 cause it 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 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 hour per ton range that is a factor of 30 increase in productivity and along come someone called a hander Carnegie he becomes the richest man in the world richer than bill 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 you’ve been mayor of Chattanooga and he needed $25,000 because one of the Roosevelts he’d give 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 Kearny got an appointment for my fault my grandfather with Andrew Carnegie my grandfather went to see Andrew Carnegie and said well we’ve he said we’d like you to give us the last 25 thousand dollars which will make our with Rockefellers quarter million dollar challenge grant will 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 in 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 it was very big as a philanthropist philanthropist on education and my grandfather in his autobiography said he figured if he had had 12 or 14 months and not 13 he probably wouldn’t gotten the money because he and Andrew Carnegie both had 13 months of education he got the money and started the universe 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 Kearny had built huge things which are called basic basic open-heart 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 you 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 air that cold air would come in through the hot brickwork and exit through the cold Rick work and you just keep oscillating between the two brick works where the pre heaters for your air and it took about 24 hours to melt a couple hundred tons of steel then after World War two some guys in Austria decided there is another way to

do it if they use 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 night 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 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 thing this vessel has the volume about five times the boss of the volume of the liquid and when you hit it with that supersonic jet and 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 of 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 pant apply it right next to the blast furnace because you’re pumping in liquid oxygen this consumes about I don’t remember about it’s over ten percent of all the liquid oxygen produced in the world I mean they just they just liquify air you know distill it so you have liquid argon liquid nitrogen liquid oxygen the liquid oxygen is mostly used to make steel use 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 litre okay because it’s a byproduct of making steel and liquid argon is a byproduct 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 we 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 a ten years ago or seven or eight years ago it was about a half an hour a ton but now anyway it’s about about 30 minutes a ton or 20 minutes of ton now of labor costs when I work for a steel company in 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 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 really clean steel for aerospace engines and 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 at 300 300 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 are gone through there and I can

remember in the early 70s when I took thermo in this department Tom King had is calculating the argon oxygen decarburization process why well it has been invented right here at MIT in the basement of building eight there’s the this is a picture of the basement of building eight about 1920 right after that my team moved over this is what the basement of building eight looked like it was a tooth to 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 nineteen sixty-two the Ford Foundation gave them the money to make this to take this make this not a to bay area but they basically were they had little Ernest is here and when you went to the lab this is the lab you would go to a hundred years ago at MIT and you learn how to make steel or cast iron or something else or you might learn to assay for gold this is a out of the same book with this is a mining engineering and metallurgy courses of study that’s this this is I think this is 1888 or something okay at MIT and yeah I take physics at take german why’d you have to take german because that’s where all the science was done until after World War 2 the great science nation of the world was Germany where did all the quantum mechanics guys plonk you know not all of them were German de Broly is 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 two over here because we imported all those scientists after World War Two we left them in Europe starving and we said here come over here Verner von Braun will 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 submit the United States as the one of the leaders in in science today well the other things were fairly similar but somewhere in here I don’t remember but it said fire ass a saying 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 happen there was a OD the argon oxygen decarburization process that the basic science was done under John chipman back in the 1950s by name guy guy named Chris ski 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 to me made today is made by the aod process which was at its roots right here in the building bottom of building eight and they do other things to de-ass 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 of the tundish and you cast the steel and to 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 this deal but ninety-five percent of the steel is continuously cast water cool 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 one continuous casters for three or four years continuously never stop okay this changed things from getting about 67% sixty-five percent yield when i worked at Bethlem steel most things were in good 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’s 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 remelted 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 Bethlem steel he was just under vice president he was charged 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 prove 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 it excess of steel mills in the world and what do the steel companies the United States do United States of Bethlem 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 be 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 us fuel companies in the marketplace in the meantime the Japanese were had enough profitability they were building brand new steel mills the Koreans decided to build a steel mill actually was the premiere of korea said if we’re going to be a major shipbuilding country this is the 1970s early 1970s think 1972 they would 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 ok so it’s not exactly a lot of love lost there but in any case the Koreans decided they partnered with us deal US Steel gave him the engineering they built a company with the government of Korea ok back and the guy who was put in charge of it was grow Park who worked for president Park it was the premiere of korea in kernel 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 ok 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 Bethlem steel built the last large-scale steel mill in the world financed by a private company in 1968 273 they built burns harbor in indiana Bethlem 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 well in the United States causes 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 so just like the

Japanese they were funded by entire countries it was a whole country it was an individual company when intel wants to build new fab or Boeing wants to build 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 his department head in this department is now Dean at Rice University he was saying 20 years ago the steel was dead he was a okay he was in polymers okay he didn’t understand the scale of steel steel wasn’t dead it wasn’t profitable all through the 1980s it was losing money why I 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 two 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 shorter period of time there are tremendous disruptions okay and 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 ok but it’s an undergraduate dorm down here ok and dick Simmons graduated from this department in like nineteen fifty-two he went to work for a steel company eventually he became president of Allegheny Ludlum steel and through to 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 hey 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 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 went down got my car he very sheepishly said to me Tom we’re not going to the main terminal oh we’re going in general aviation deco 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 he was he’s a very is I wouldn’t say he’s a humble guy but he’s he was very modest and hidden is 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 I had to deal with the blast furnace failure at Allegheny let them once a blast furnace it was a bof failure back to know is the aod it was a OD failure anyway it was the bearing in the aod and I had to go to the plant the hourly workers love dick Simmons they hated most the rest of the management would they Revere dicks events okay he was 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 Ford worked for John Elliott who had been one of John chipman students and John Chapman 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 Ford was Canadian but some people up in realize 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 than iron and they said there’s got to be some money to be made for a hundred 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 and one of these mini Mills is place called chaparral steel down in Texas Gordon Ford became president chaparral steel

and very innovative manager he won a manager of the Year award by the American Management Association for the rant way ran chaparral and in any case they used to send their there 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 to try to go faster and they couldn’t do it and so the guys 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 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 chateau yeah a way thing here it is ones on the board and ones 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 ok so this 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 travel 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 the tall this guy in India who was not stupid and he knew that the u.s. deal in Bethlem steel that 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 a soul or metal steel Bethlem bankrupt this indian is worth he’s a multi-billionaire because he went out in the 1980s and 1990s when Wall Street said steals 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 gate glass industry okay that’s it thanks Bob