Andrew Carnegie's Success

Much of Carnegie's success came from his extraordinary ability to recognize and exploit the opportunities being created by industrialization. During his 12 years with the Pennsylvania Railroad, he developed the managerial skills and personal relationships that would help him in his later business ventures. He learned how the railroad industry worked and introduced such innovations as keeping the telegraph office open 24 hours a day and burning railroad cars after accidents to clear the tracks quickly. During the Civil War, he organized the military telegraph system for the North and gained additional insights into the industry. Seeing the commercial potential of sleeping cars on trains, Carnegie invested $217.50, which he obtained through a …show more content…
He withdrew from his other investment activity to concentrate on steel manufacturing. With his own capital, he built his first blast furnace that year and another in 1872. He persuaded some of his Pittsburgh business acquaintances to join him in steel manufacturing and with them formed Carnegie, McCandless, and Company (later known as Carnegie Steel). The company employed the innovative Bessemer method, which Carnegie had witnessed on a visit to Bessemer's steel plants in England in 1872. This process, which forces compressed air through molten iron to burn out excess carbon and other impurities, significantly cut the cost of converting iron into steel. In 1875 Carnegie opened his first steel plant in Braddock, Pennsylvania, naming it after the president of the Pennsylvania Railroad, Edgar Thomson. The plant's first order, for 2,000 steel rails, was placed by the Pennsylvania Railroad. Carnegie also introduced open-hearth steel production to his plants, which lowered the costs and increased sales and profits. Carnegie consistently invested his profits back into the company to make improvements, cut operating costs, and drive out competition. By 1878 the company was capitalized at $1.3 million and it continued to grow, making Carnegie the dominant steel manufacturer in the …show more content…
C. Frick Company, which produced coke--a component in the manufacture of steel. Carnegie and Frick made a formidable business team, with Carnegie overseeing expansion, installation of cost controls, and modernization of plants while Frick controlled day-to-day management. In 1883, Carnegie bought the Homestead Works to produce steel structural members for elevated railways and skyscrapers-products in increasing demand in growing urban centers. Despite a harsh national depression from 1893-1896, the Carnegie Company, following Carnegie's command to "Take orders and run full," held prices down, kept skilled workers on the payroll, and earned profits. By 1890, Carnegie's take-home pay was $25 million per year. A decade later, Carnegie Steel's annual profits were $40