Saving American Industry by Disrupting It

The U.S. economy has lost more than a third of its industrial base over the past 20 years and with it more than six million good-paying jobs. This loss is the real cause of the rising economic inequality that now plagues our nation.
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The U.S. economy has lost more than a third of its industrial base over the past 20 years and with it more than six million good-paying jobs. This loss is the real cause of the rising economic inequality that now plagues our nation.

While most of the corporate CEOs who are facilitating this outsourcing of national wealth are indifferent to what is happening, there are a few old-fashioned, true capitalists who are not. One of those is Texas entrepreneur Rob Wendt. He is a man on a mission: He's fighting to rebuild the American steel industry with American workers in America.

His is a lofty goal, to say the least. Once at the heart of the U.S. economy, the steel business now stands with the automobile industry as a stark symbol of American decline. Our nation led the world in steel production for decades -- it was used to build the cars and appliances that fueled domestic job creation and economic growth over much of the 20th century -- but U.S. producers have been in freefall since the recession of the 1970s.

At one time its biggest exporter, America is today the world's number-one steel importer. We have been outrun by China, Europe, and Japan -- and now India is hot on our heels.

Wendt wants to reverse that trend. To do so, he is using what the industry has lacked for nearly 100 years: truly disruptive technology. His startup, Origami Steel, has developed a patent-pending process that could radically change the ways in which steel is both made and sold. Fully funded, the company's technology has the potential to turn the international steel business on its head, much as hydraulic fracturing (better known as "fracking") has done with oil and gas.

Before founding Origami Steel, Wendt ran a company specializing in steel components used mainly in port construction and heavy-duty earth-retention jobs. Its products were crucial to upgrades made to the New Orleans waterfront in the wake of Hurricane Katrina, to the stabilization of the World Trade Center site after the 9/11 attacks, and in other big construction projects around the world.

In his years on the job, Wendt witnessed the effects of unfettered globalization firsthand. Overseas steel companies won large contracts by bribing government officials, cut costs by using cheaper materials than those specified by builders, and further consolidated their already daunting market share. As the herd of U.S. steel companies continued to thin, American builders found themselves forced to buy abroad despite low product quality, long wait times, and high shipping costs.

Scores of American jobs were lost as a result, and the increased efficiency that globalization's cheerleaders had always promised never materialized.

Improving steel production is the first thing Wendt wants to do to bring the American industry back. Origami Steel's pending patents cover an entirely new way of folding and laser-fusing metal plates without the need of weakness-inducing welds. The process is also capable of rolling out products in a virtually endless variety of shapes, giving architects and engineers options they've never before had.

Wendt isn't stopping there. His company's technology would also make fundamental changes to the way steel is sold and distributed, just as has done with books. Origami Steel's customers will be able to design entire building projects using the company's online system, rather than contracting with distributors or other middlemen. Products like beams, connectors, and other components will be manufactured on-demand and shipped direct from specialized plants that the company plans to build in key regions around the nation. Their design calls for them to be considerably smaller and more environmentally friendly than the antiquated facilities run by overseas competitors.

Given its emphasis on emerging technology, perhaps it's fitting that Wendt chose to base his new venture in the tech-hub of Austin. Will he turn that already industrious city into the next Pittsburgh? Will Origami Steel wind up threatening Luxembourg's ArcelorMittal, Japan's Nippon Steel & Sumitomo Metal, and the rest of the industry's global giants? Only time will tell. In the meantime, the steel world's executives, analysts, and investors would be well advised to keep an eye on this little company and its founder. Betting against American innovation and entrepreneurs, after all, can be a very risky move.

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