Disasters in business history

[L50LasPak]

Do construction disasters count?

I'd say if it was proven in the aftermath that the business was at fault for cutting corners and it ultimately impacted their bottom line, then yes.

 

[ShortBusDriver]

Daewoo is known in America only for their failed attempt to penetrate the really bad car market.

And the rifle which was imported into the US in extremely limited numbers prior to the 1989 ban.

One of the roof Koreans was actually armed with a Daewoo.

 

[Kari Kamiya]

Big Idea Productions could've potentially still remained in Phil Vischer's hands a little bit longer had he and Dick Leach, the owner of Lyrick Studios, actually signed a contract for the distribution instead of just having a verbal agreement. Because when Dick sold his company to Hit Entertainment and then suddenly died, and Phil struck a deal with Warner Bros. to fund Jonah, Hit slapped them with a lawsuit, which could've gone a bit smoother for Phil with a physical contract. Also, the money of the merchandise and home video sales went to the distributors.

But everything about Big Idea Productions was a disaster due to overspending to get big as a company fast and not turning a profit fast enough, and the staff (the animators, mostly) clashed quite a lot--all before they started making the Jonah movie. It's also quite possible that Phil may have been laundered from the start by some executives and lawyers taking advantage of a Christian man with no prior business experience. But ultimately, his pride got a hold of him.

Saberspark did an in-depth video on Big Idea's history. It's long (has some meme fluff that adds to the duration), but it's a tragic story and a cautionary tale.

 

[mindlessobserver]

I am old enough to remember the Hardees take over of Roy Roger's. A cautionary tale in brand acquisition that has lessons for any business looking to expand. The quick tl;dr is that Hardees wanted to expand into the North and saw acquiring Roy Roger's as the best way to do it. The plan was to, in theory, integrate roy Rogers into the hardees brand. Convert all the Roy Rogers stores into Hardees, and then Profit.

Instead however the established customer base of Roy Roger's saw Hardees as a hostile interloper taking away their precious store. The integration of the Hardees menu and rebranding all the stores drove the established fan base away, leaving hardees holding an huge debt from the aquisition and a permanently damaged Roy Roger's brand (that they sold off for a song) and their own brand irreparably damaged in the market they had tried to expand into. They are still trying to recover from it to this day.

It's honestly comparable to Disneys acquisition of Lucasfilm, and other misguided brand purchases by companies thet have no idea what to do with their aquisition.

 

[wtfNeedSignUp]

Theranos.

It's pretty amazing how not only the whole thing glows in the dark with the usual suspects, but also how the media simps through the "female power".

 

[Tovarisz]

WeWork comes to my mind just because I know of a company who has a CEO who is just like WeWork's CEO and he personally pissed me and people from different company working with me off on more than one occasion. Can't wait for him to share WeWork's CEOs fate. They also hire their full time employees on shittiest contracts that are legal and are constantly drunk.

 

[Aqua Panda]

I actually remember the family picking up a couple of Daewoo dvd players back in the day.

They ended up being really terrible and cheap pieces of crap. The disc trays especially used really cheap plastic screws and gears that would very easily strip and leave discs trapped inside. The actual software was a disaster as well. Tons of video artifacts beyond the norm you would get for dvd.

 

[glow]

The Intel "Meltdown" vulnerability comes to mind.

If software bugs count then we have to bring up Knight Capital, in which a manual deployment of their automated trading software caused them to lose $170,00 every second for 45 continuous minutes. They tried rolling the deployment back but actually made it worse because they had no proper processes - effectively they deployed one defective instance of the software and "rolling it back" activated eight defective instances. The system would throw hundreds of alerts a day so nobody paid attention to the alerts.

For those not in tech - manual deployments are a shitshow and you're begging for a mistake, even if you're in some tiny start-up, let alone a billion dollar company - when there's this much money on the line, it's borderline criminal negligence to not set up proper automated deploy/rollback procedures. No doubt there were many engineers complaining about this state of affairs while the bosses didn't care and counted their bonuses.

 

[Absolutego]

Kinda old compared to most of the stuff ITT, but the entire saga of Xerox and their inability to exploit the innovations created by the PARC is legendary, so much that it's taught in business schools as a lesson in failure to recognize opportunities. tl&dr; East Coast suits accidentally started the West Coast research lab that created the mouse, GUI, object oriented programming, and a shitton of other inventions that would pioneer the PC era, but had no idea what they were sitting on and let Apple, and later everyone else, steal the ideas from them without any credit or compensation. Legendarily bad decision making.

There was also that time last year Salesforce went down globally because they let a marketing tech deploy to production on a Friday afternoon, but that's a more classic blunder.

 

[CEO of Pickles]

Bethesda's launch of Fallout 76. This particular launch was a disaster since, from a business perspective, it was a constant stream of bad decisions piling on top of each other.
Unsecured customer support tickets, change to NO REFUNDS, false advertising of a promotional item, and a class action lawsuit all for one game.

 

[Meat Target]

The Zip .22, a gun so awful it sank the company that made them, which previously had had a good reputation for ita Single Action Army clones.

 

[Muncie Anderson]

Early 1968: Two titans of the railroad industry, the Pennsylvania Railroad and the New York Central, merge together to form Penn Central, which quickly takes control of the New York, New Haven and Hartford Railroad later that year. All three companies had seen better days, particularly the New Haven. Pennsylvania and New York Central had been talking about a merger since 1957, and that started a series of reactionary company mergers through the northeastern United States. Two expanding companies, the Norfolk and Western and Chesapeake & Ohio, had also announced merger plans with one another once they had finished gobbling up smaller railroads. This didn't happen following Penn Central's bankruptcy in 1970; both N&W and C&o are now parts of the two remaining eastern giants of railroads, Norfolk Southern and CSX. As for Penn Central...

PRR and NYC came into the merger in the black, but PC's first year of operation yielded a deficit of $2.8 million ($20.6 million today). In 1969 the deficit was nearly $83 million ($579 million today). PC's net income for 1970 was a deficit of $325.8 million ($2.14 billion today). By then the railroad had entered bankruptcy proceedings — specifically on June 21, 1970. The nation's sixth largest corporation had become its largest bankruptcy (the Enron Corporation's 2001 bankruptcy eclipsed this in large measure). Although the PC was put into bankruptcy, its parent Penn Central Company was able to survive.

The devastating effects of Hurricane Agnes in 1972 further hampered PC operations, destroying many important branches and main lines.

In 1976, Penn Central along with six other bankrupt and much smaller northeastern railroads were reorganized into Conrail by a branch of the U.S. government, the United States Railway Association. It took a few years for Conrail to turn a profit, but once it began to thrive, the government sold Conrail to private investors, and it would continue into the nineties as a profitable independent company which was jointly bought by CSX and Norfolk Southern.

(You probably could've caught Leonard Shaner on a good day, and he probably would have happily talked about this topic for hours if you let him...)

 

[Agent Abe Caprine]

Boss Key Productions. Cliffyb went from a respected developer to a laughingstock thanks to Lawbreakers. Radical Heights was merely the cherry on top. Before Lawbreakers shut down, the PS3 port of Team Fortress 2 had a bigger playerbase. Hell, Meridan 59 had more players in 2018.

 

[CEO of Pickles]

Boss Key Productions. Cliffyb went from a respected developer to a laughingstock thanks to Lawbreakers. Radical Heights was merely the cherry on top.

Lawbreakers came out at a time when the market was oversaturated with competitive hero shooters. It could have survived long enough to stand out, but Cliff seemed to go out of his way to fail (F2P to $30, "Fuck XBox", fast tracking a competitive scene, prioritizing cringy marketing, etc).
Radical Heights was definitely the cherry on top because it felt like he was TRYING to be bland in ANOTHER oversaturated market.

 

[Cedric_Eff]

ENRON,

and why never to hide your losses.

 

[Krokodil Overdose]

It's pretty amazing how not only the whole thing glows in the dark with the usual suspects, but also how the media simps through the "female power".

Much like the UVA rape hoax, it was a story that was just too good to be true- that all the usual suspects believed because they wanted it to be true. One of my favorite YouTube comments ever: "two years, twenty government agencies, and millions of taxpayer dollars to figure out what a phlebotomist could have told you over happy hour."

 

[WD-40]

Micheal Cimino’s Heaven’s Gate was such a financial bomb that it single-handed killed United Artists. Making only $3.5 million out of it $44 million budget, the production was plagued with Cimino’s perfectionism that lead to the film going four times over its budget. For instance, when a street Cimino had built for the film was six feet too narrow, instead of taking the recommended and cheaper option of tearing down one side of the street and moving it back six feet, Cimino ordered both sides be torn down and moved back three feet, because it would look nicer. Or how Cimino had an irrigation system built under the battlefield so it would remain a bright green during filming. Or how Cimino halted filming for several hours so a cloud he liked would pass into view.

Over 220 hours of film were shot, later cut down to a 5 hour runtime, then had to be cut down again to 3 hours and 40 minutes causing it to miss its Christmas 1979 premiere date and executives to contemplate firing him. After its one week run in November 1980 and another recut and re-release in April 1981 the film was both a financial and critical failure. Cimino’s career was ruined, United Artists was merged with MGM a few years later, and along with other flops like Sorcerer and Cruising led to a decline in director-driven films as a whole.

 

[Moist Unguentine]

Corfam shoes were “DuPont’s $100 Million Edsel”. Corfam shoes didn't breathe or stretch like leather and were almost impossible to break in. DuPont was still riding high on the success of Nylon and the company was investing a lot of money in R&D to develop new products. While Corfam was a flop, future products in the pipeline at the time included Lycra and Kevlar which proved to be very profitable later on.

The short life of DuPont's Corfam

 

[Moist Unguentine]

One big example that comes to mind is the meteoric rise, and subsequent massive fall of the South Korean company Daewoo. They were one of the big chaebols (along with Hyundai, LG, and Samsung), which are usually family-owned mega-corporations that have their hands in a lot of things in Korea. Although Daewoo was known for their cars, which were for the most part quite crappy, even compared to the lackluster cars that Hyundai and Kia were producing at the time, they were also involved in things such as electronics, ship building, textiles, telecommunications, the list goes on. Daewoo got themselves into trouble in the late 90s, when the Asian Financial Crisis was happening, as they continued to spend more and more, while the other chaebols cut back on their expenses. The reckless spending lead to the company going bankrupt in 1999, and CEO Kim Woo-Jung fled abroad, until he was arrested in 2005 after returning to Korea, and was sentenced to 10 years in prison, and he eventually passed away in December 2019.

I'm not sure how much media attention that Daewoo's downfall got outside of Korea, but had it occurred in say, the US, I'd say that it would rival the falls of companies like Enron and WorldCom.



The Sampoong Department Store collapse in South Korea would count as a big example of that, as the owner had so many chances to make sure that a disaster of that magnitude would not happen, but he did fuck all because all he cares about was the bottom line.

Daewoo was clueless about car commercials for the US market. This is a good example.

https://www.youtube.com/watch?v=ZNJsNOjWtkE

 

[DJ Grelle]

Philips in the Netherlands. It used to be on the cutting edge of technology, standing at the cradle of things like VCR, CD, DVD and Blu Ray. And then in the 90ies it just stagnated.
Nothing was done to become a leader in electrical appliances once more and they started to sell off divisions.

The company still exists but as a shadow of its former self. Compared to one of their former divisions; NXP semiconductors, which is one of the largest (I think top 5) chip designers and manufacturers in the world.