Disasters in business history

[GHTD]

I'd like to start a list of some of the most disastrous moments in the business world that Kiwis can think of.

One I'm thinking of is when notorious boomer store JCPenney hired a former Apple exec, Ron Johnson, as their CEO. He ended up eliminating coupons as well as many of the company's low-cost brands, which is basically what JCP was known for. I remember reading it was so disastrous he got fired after a year and the company took a massive loss during his CEO run. I mean, just look at them now, under Chapter 11 and likely going to be bought out just for the real estate and nothing else.

Company Man video on the disaster:

 

[Big Bad Wart]

Does this count?

Blockbuster's downfall was a disaster. They should have not trusted ENRON and instead bought Netflix.

 

[Smug Chuckler]

I remember when Enron was the buzz back in the early 00's.

 

[Μusk]

The Intel "Meltdown" vulnerability comes to mind.

Here's how it went:

• Intel engineers purposefully neglect/exclude/turn off? CPU function that performs a check necessary for security.
• This is done with increased performance in mind. AMD and (most) other manufacturers were not effected because they did not disable this feature.
• REALLY FUCKING BAD vulnerability. Can potentially be exploited via Javascript or any program really, and let's an attacker read any of your computers memory it wants. No easy way to detect it attacking your computer.
• The vulnerability potentially exists on pretty much every Intel CPU going back to 1995. Definitely exists on CPUs within the last decade that feature speculative and OOT execution.
• Intel's "fix" consists of a shitty kernel patch that disgusted Linus Torvalds himself and tanked performance significantly on ALL Intel CPUs.
• Around the time of this happening, the Intel CEO resigned from the company.
• This resignation was after a long period of the CEO maintaining the minimum number of shares necessary to hold the position.

This vulnerability hit everyone. Imagine the main product your company is responsible for all of a sudden becoming defective and potentially malicious for everyone that uses it. This vulnerability was particularly concerning to datacenters and the NSA domestically, who were hit the hardest by it.

 

[Bunny Tracks]

Blockbuster's downfall was a disaster. They should have not trusted ENRON and instead bought Netflix.

Fun fact: The last movie ever rented from an official Blockbuster (ie; not just some store licensed to use the name and logo, but an actual company store) was the film This is the End.

 

[DeadFish]

Do construction disasters count?

 

[Bunny Tracks]

Though they had no (known) hand it, and are now used as the textbook example of exactly to handle a crisis such as the one they, and the whole country faced back in 1982, the Tylenol Murders still exposed a devastating, and looking back on it, utterly mindbogglingly easy way to poison an entire country. A way that ended up costing seven (known) people their lives, and costed the company, Johnson & Johnson, over $100 million dollars.

To this day, the person, or persons behind the murders still haven't been caught, and although the company, and industry as a whole went above and beyond in terms of rectifying the issue, the fact that no one ever thought of introducing preventive measures in first place until the crimes occurred is a rather unnerving thing to think about.

 

[sasazuka]

Target Canada, a failed northern expansion that only lasted two years, from 2013 to 2015.

Basically, Canadian shoppers expected the selection to be comparable to what they find at American Target stores when they go cross-border shopping, but, instead, found the selection a bit lacking and downscale, more comparable to the Zellers stores that most of the Canadian Targets replaced. (I myself had never visited an American Target store to have been able to compare.)

The Canadian Target locations were, again, mostly former Zellers stores (although not all Zellers became Targets), which were often in lower-end shopping centres and strip malls and not usually the top tier destination malls with the big spending clientele Target was hoping to attract. (There were exceptions, like with the planned Target at Ottawa's Bayshore Shopping Centre, the main destination mall west of downtown. Bayshore had a Zellers, which was one I particularly liked to visit, but, instead of just building the Target inside the former Zellers location, Bayshore opted to use Target as the centrepiece of a huge expansion and construction took quite a while, with the Target having missed its planned opening window of the 2014 Christmas season. Long story short, the store was almost ready to open after millions having been spent on construction when Target announced that they were pulling out of the Canadian market, so the store never officially opened. I'm not sure if the Bayshore Target even had a clearance sale. Walmart swooped in and bought the Bayshore location, relocating to Bayshore from Lincoln Fields, a mostly dead mall.)

The biggest problem I noticed with Canadian Target stores was that the shelves and pegs would often have to be almost empty before the stockers would restock them, and I know it wasn't purely supply chain problems because, as soon as the stores started the closing sales, they'd have bins full of the items that were hard to find before Target announced they were pulling out of the Canadian market.

The last straw seems to have been Canadian Target shoppers' credit card information being hacked, a fatal confidence blow for a chain that was already struggling.

Spoiler: Bright Sun Films 'ABANDONED' video on Target Canada.

Spoiler: Bright Sun Films 'ABANDONED' video on Zellers, which also talks extensively about Target Canada.

 

[Thiletonomics]

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.

Do construction disasters count?

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.

 

[Daddy's Little Kitten]

Sears and Kmart went to shit. They owe me 120 bucks.

Theranos.

I'm gonna miss JCP. Their clothes would last me a long time.

 

[Lonely Grave]

The spectacular downfall of Ansett Australia.

Ansett was Australia's second national airline after the more entrenched Qantas, who survives to this day as Australia's sole national airline. Ansett's story is a classic tale of uncaring executive management, complete apathy for the ground-level problems of business operations, and a foreign overlord that made all the wrong moves. In just one of their many bumbling, idiotic moves they tried to buy off Branson's Virgin venture into their market with fierce prodding from their Singaporean overlords but it failed abysmally when Branson publicly tore up the $240 million AUD cheque in front of a large press conference. Within a week Ansett was bust.

I remember the news even as a kid. One day on the evening news somewhere in 2002 with the big headline "Ansett Collapses" with a lot of sheepish big-suit executives walking morosely out doors hounded by the media. Their posture should have belied pity but their girth attracted the scorn they richly deserved.

 

[Quantum Diabetes]

So much for this formerly popular weight loss candy:

https://en.m.wikipedia.org/wiki/Ayds

 

[Big Bad Wart]

Though they had no (known) hand it, and are now used as the textbook example of exactly to handle a crisis such as the one they, and the whole country faced back in 1982, the Tylenol Murders still exposed a devastating, and looking back on it, utterly mindbogglingly easy way to poison an entire country, that costed the company, Johnson & Johnson, over $100 million dollars.

To this day, the person, or persons behind the murders still haven't been caught, and although the company, and industry as a whole went above and beyond in terms of rectifying the issue, the fact that no one ever thought of introducing preventive measures in first place until the crimes occurred is a rather unnerving thing to think about.

U.S has always had a Laissez-faire streak so it not that surprising that a lot safety measures are missing since they cost money and time.

The earliest example of this I can think of off the top of my head is the meat industry. When Sinclair wrote The Jungle (1906) he basically brought attention to the malpractice taking place on a wide scale at multiple plants. Although some claims like people falling into meat were found to be baseless a lot of the exploitation and general horrible conditions existed. This mess lead to the Meat inspection Act and the Pure Food and Drug act. The Pure and Drug Act was a major stepping stone to the creation of the FDA in the 30's.

 

[Bunny Tracks]

The earliest example of this I can think of off the top of my head is the meat industry. When Sinclair wrote The Jungle (1906) he basically brought attention to the malpractice taking place on a wide scale at multiple plants. Although some claims like people falling into meat were found to be baseless a lot of the exploitation and general horrible conditions existed. This mess lead to the Meat inspection Act and the Pure Food and Drug act. The Pure and Drug Act was a major stepping stone to the creation of the FDA in the 30's.

Real talk here, The Jungle is a fantastic book that everyone should read. Yes, it has a bunch of socialist shit in it, but that's because of the time it was written. Things really were that bad back then, and to my knowledge, the stuff about people falling into the rendering machines was only considered false because they couldn't prove it actually happened. Everything else in the book was pretty much true.

Regardless, it and Upton Sinclair deserve much more credit than they get.

 

[whatever I feel like]

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

 

[CWCissey]

Ratner.

I win.

https://en.wikipedia.org/wiki/Gerald_Ratner#The_speech

 

[hawaianlapulapu]

When the worst game in history ET almost ruing the whole videogame industry

 

[／Ｏｕｒ Ｌａｄｄｉｅ／]

When the worst game in history ET almost ruing the whole videogame industry

Glad to see Elliot looking like an overweight POC on the poster there.

Does the business of tulip mania count?

 

[murdered meat bag]

JCPenny's downfall can be one of the first "get woke, get broke" casualties. The reason why they cut coupons, sales and all the shit soccer moms loved was so they could try to get the Gay and lesbian market who were supposed to be wealthier, more chic and didnt' mind spending the money. They even had ellen do their promotions. But it turns out chasing after 3 percent of the entire US isn't enough to sustain a national company chain. Not surprising since the CEO was an apple guy right?

 

[GHTD]

JCPenny's downfall can be one of the first "get woke, get broke" casualties. The reason why they cut coupons, sales and all the shit soccer moms loved was so they could try to get the Gay and lesbian market who were supposed to be wealthier, more chic and didnt' mind spending the money. They even had ellen do their promotions. But it turns out chasing after 3 percent of the entire US isn't enough to sustain a national company chain. Not surprising since the CEO was an apple guy right?

It really didn't make sense. JCP generally has shoppers in their 50's and 60's, it's a boomer store. I shop there from time to time when I need some cheap clothing that isn't graphic tee shit, and it's mostly boomers I see when I go.

At least it wasn't a Eddie Lampert (Sears/Kmart guy) type situation where the CEO just let the chain rot for their own benefit.