From the top of Mount Washington in Pittsburgh, you can see three rivers intersect. While I was completing my Master of Science in Industrial Administration (now called a Master of Business Administration) at Carnegie Mellon University, I would drive to the top. Along one of the riverbanks there was a steel company, J and L STEEL. The furnaces shot flames 100 feet high. Like a campfire log, the steel mill danced and flickered with oranges and yellows. Never before had I seen anything like it, nor since.
The American steel industry dominated world steel production from the end of World War II through the 1970’s. With the rebuilding of Europe and Japan plants began to open in other countries. The new plants innovated and revolutionized the way steel was produced. For example, they took the American’s two-step process into one-step called continuous casting. Unable to compete with foreign prices, American steel mills sought protection in Washington through importation tariffs. By the 1990’s, American steel was dying.
Protection, rather than innovation, led to the demise of the American steel industry. The same innovation principle will be vital for companies in the coming years.
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