CHANDLER MEDAL ADDRESS
Some Growing Pains of O u r Chemical Industry M. C. WHITAKER American Cyanamid Co., Stamford, Conn. L
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T HAS always been my ambition to be a chemical engineer and design, build, and put into operation new chemical processes. I did not want to run them after they were put into successful production, any more than a bridge engineer wants to stay after the bridge is finished and collect the tolls. However, every time I got started on the kind of a job I wanted to do, I was detoured into problems of initiation, organization, and management. Perhaps some observations woven about my unchosen field in the chemical industry would be in order a t this time. We are accustomed to take f o granted ~ new developments i n the technological field without giving a thought to who made them, where they were conceived, or how produced, and what effect these (developments have had upon t h e industries which preceded them, or the fields which ]profited by them. We take +for granted nylon, stainless gteel, antibiotics, plastics, Tadio, television, detergents, .airplanes, not one of which ‘was produced 50 years ago. “The plants and tools which produced these are all new, .and so are the jobs that they have m a d e f o r t e c h n o l o gists, as well as for management, labor, and capital. To be sure, we had in this country 50 years ago what we then thought were important and substantial industries. Included in that group was a small but hopeful chemical inIdustry which seemed to have made a beginning about 300 years before. I n 1900 it was looked upon with more or less suspicion or contempt and a decided lack of interest on the part of the public, the bankers, and the politicians. GROWTH IN THE CHEMICAL INDUSTRY
Industrial growth in the nonchemical industries parallels, -in general, the production of steel. In 1900 our output of steel was 24,000,000 tons. Today it is over four times that, nor 100,000,000 tons. A good yardstick to measure growth in the chemical indus-
try is sulfuric acid. American production of this basic chemical in 1900 was 1,000,000 tons, but today it is over 12,000,000 tons per year. This basis of comparison indicates that steel and general industry has increased its production to four times what jt was in 1900, while the chemical industry in the same period has increased its output about twelve times. An endless number of illustrations might be produced to show the growth of the chemical industry in this country, and to show how chemists and chemical engineers have taken over and converted huge rule-of-thumb operations into chemical industries. It seems but a few years ago since two Ph.D.’s from Johns Hopkins got jobs in an oil iefinery in Whiting, Ind. Someone thought that they might improve the process and the products then recovered by direct distillation from crude petroleum. As might be expected, they went far beyond that, and their work paved the way for the chemical revolution that was to follow in the worldwide petroleum industry. Since then many oil companies have built, manned, and operated great research laboratories, and their chemists and engineers swarm over everything from the oil wells to the end use of their products. The petroleum industry, like many other ruleof-thumb industries since, has gone chemical. Some of the incidental factors which contributed to the recent rapid growth of the chemical industry in America might be mentioned in passing. We were weaned from our dependence on foreign research, development, and production by World War I. We were rudely awakened to the fact that we had been misled, propagandized, lulled, and bludgeoned into the belief that we did not belong in the fine chemical field, and that foreign countries should control, through some divine right, research, production, and sale of such chemicals throughout the world. We are told that our chemists were not well trained and lacked originality, that our engineers could not hope to master the complex problems of chemical engineering. We were told that American benzene would
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not make good aniline, and that we, therefore, could never make, and that it vias useless for us to try to make, refined organic chemicals. It was graciously conceded that a few basic commodities, too heavy or dangerous to ship across the Atlantic, might be made in America. We were also told that, because practically all knodedge in chemistry originated in Gel many, progress was bound to be controlled by Germans through their patents. Strangely enough, a large majority of the American public believed all of this, even though our small minority of chemists knew it was not so. KO matter how voluble w might be, our voice was not heard, or was ignored. The rude awakening which followed the outbreak of TTTorld War I and the suspension of chemical imports had an effect which the master minds had not anticipated. Instead of begging for dyestuffs, pharmaceuticals, potash, and SL long line of essential chemicals which we did not produce, rchat there was of the American chemical profession mobilized and went to work. Latent or suppressed talent bobbed up eveiywhere, frequently in the most unexpected places. The innate ingenuity and determination of the American technologists, which had not been reckoned ~ i t ha t all by our exploiters, came to life and spread all over the chemical picture. Aniline was soon being made from American benzene. Synthetic phenol was being produced in a half dozen plants. Potash production to meet our fertilizer requirenieiits n as started by several methods, and large deposits of natural potash were developed in America. Alloy steels to meet our tool requirements were promptly developed and produced, and the dyestuff and pharmaceutical industries weie establidied. K e mere then told that our activity was all a waste of time, that the war \+auld soon be over, and that when it was the Germans would wring 0111’ necks with patents. However, by the end of the war the public and Congress had been educated to the importance of the chemical industry and its relation to national defense and the welfare of our people. From then on we were determined to stand on our own feet. How well we succeeded can be answered by the fact that there were few critical shortages in JTorld War 11,despite the enormously increased demand for \$Tar chemicals, new pharmaceuticals, insecticides, explosives, etc. The synthetic rubber problem, masterminded by our top chemists and engineers, mas solved on a gigantic scale (over 600,000 tons per year) without a hitch, a magnificent tribute to our ability to train and use technologists, and rely disconcerting to our detractois. The cheniical industry is noiv a live, grorving, going thing. It is a good time to look forward and see and Understand what it is that makes the wheels go round in this industry, hon and why it goes and grows-in short, how did we get this way. In the early days cheniical industries had to finance themselves. If they wanted to expand, they had to earn the money from their going operations before they could do so. Bank credit or public financing was practically unknown. A bond issue was unheard of. N o one seemed to understand the industry or what it was trying to do. It was so small and unimportant that there was no inclination to learn. NOW, however, that the industry has come of age and its earning power has become established, magazines, banks, and investment houses compete to tell the public in glowing terms the advantages of chemical investment. Some have nominated
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it for the top place among the 329,000 manufacturing industries of the country. All of this is very gratifying to those of us who have seen the chemical industry grow to manhood. I do not need to prove t o you by facts and figures that the chemical industry has groirn in the past fifty years, or hoi\ much. Technical j 0111 nals, magazines, newspapers, and eyen the radio have taken m e r that job. Chemical societv meetings would not rate a back page n e m paiagraph in the old days, whereas they no\v hare to provide pressrooms to hand out information about the doing3 of chemists and engineeis. Even the Patent Ofice Gnzetfe is n0T-i searched for news about our inventions! PLACE OF RESEARCH
Groiv th in the chemical industry has an essential bearing on its success. A chemical enterprise cannot stand still. We have plenty of examples of those which failed because they did not go forward. This unique requirement is based upon several important factq. A chemical company must grow, and grow fast enough to advance its highly trained and skilled personnel in order to mtiintain an efficient organization. Young and aggressive men cannot be kept on the job unless ample opportunity for advancement in salary and position is forthcoming. Skill, experience, and integrated diversification are so important to a successful chemical enterprise that a high turnover of technical personnel can easily wreck it. The greatest concern of management, therefore, is to expand, create new opportunities, and grow a t a rate which will a t least keep up with a maturing organization. Research has been the chemical industry’s answer to this challenge. Fifty years ago there were few, if any, industrial research laboratories in the United States. To be sure, a number of companies had laboratories, but their activities were devoted almost exclusively to trouble-shooting on plant process and products. Forn ard-looking research directed to applying new scientific knon ledge to the improvement and expansion of the business n-as almost unknown, and research directed to producing new knowledge was confined to a few universities. Today industry supports about 2500 research and derelopment laboratories employing 150,000 people, of which 90,000 are scientists and technically trained personnel. A typical research organization in a growing and well diversified chemical company would consist of approximately 550 chemists, 60 physicists, 80 engineers, 75 biologists, 20 metallurgists, 5 physicians, 450 technicians, and 400 nontechnical employees-a total of 1640. This does not include any of the chemists, engineers, or other technologists required for plant operation, sales, or administration, but is limited to that. part of a company required for growth. These laboratory organizations have nothing to do but produce ideas and f a d s and demonstrate their usefulness. Ideas, facts, and their proofs are all they hare to sell, and industry is a willing buyer to the tune of about one billion dollars per year. Obsolescence of plant or product is a nightmare si management. The turnover in this field varies with the industry from a fear changes in a generation to a rate of once a year. There is no other industrial field where a man with a good business is apt to wake up some morning and find that his entire enterprise, or some of its elements, has been obsolete by new invention. His only remedy for that situation is to d o some inventing on his own account or be very alert a t acquir-
May 1951
I N D U S T R I A L A N D E‘N G I N E E R IN G C H E M I S T R Y
ing the inventions of others, or both. So he goes in for research. Success is, of course, the key that unlocks all doors in business. Success is not optional in industrial research. It is necessary, if hundreds of millions of dollars are to be poured each year into our laboratories. Talent for a research and development organization is not rounded up by a dragnet. It has to be located, studied, and hand-picked to meet the requirements as then visualized. It has to be diversified as to training, experience, and ability, and fitted together like a picture puzzle. It has to be broken in a t slow speed for a few years in order to get the gears in mesh and allow the staff time to acquire a working knowledge of the business and its possibilities. Somewhere in the group there must be found or developed a few individuals (about 5%) with exceptional vision, originality, inventiveness-men with the divine spark. A man who by nature reacts negatively to every idea or suggestion or even shows by facial expression that he thinks “it can’t be done” does not belong and usually does not stay in research. Research laboratories should also serve as a classification yard where men are carefully observed over a period of years and sorted out according to their fitness for positions in research, production, sales, management, etc. This function is now well understood by some management, and, when effectively carkied out, it completely eliminates the isolation which formerly existed between the laboratory and other groups in a company. A chemist or a chemical engineer as a president or a vice president of a chemical company did not exist fifty years ago, Now a technically trained man as vice president in charge of research is taken as a matter of course.
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We have many presidents and chairmen of boards who are alumni of their own research organizations. Research costs in this country are high. The reasons are obvious. But ’that is not the end of the story. It costs the chemical industry more than $5 for every $1 spent on a successful research program to put the results to work. The place to take the time, spend the money, and use the talent on a new project is at the research and development level, and not on engineering, construction, and development programs based on incomplete or sketchy research. No company can survive if it has to re-research, re-invent, re-pilot, re-build, and re-pay for a chemical developnzent which gets off to a bad start. The grdwth of the chemical industry has been very dependent on the progress made in other fields. Standard and special tools, metals, alloys, and other materials of construction, electrical equipment, instruments, refractories, glasses, and enamels are needed in endless quantities. Syntheses requiring pressures up to 35,000 pounds per square inch or more for the production of ammonia; methanol; liquid air, oxygen, and nitrogen; melamine; and polyethylenes are in operation on a large scale. Highly qualified engineers and builders are needed for such specially designed equipment. All of this and full cooperation from related industries, engineering organiaations, and specialists have smoothed the way for our rapid growth. Talent, facilities, time, and nioney are probably the most important basic elements in industrial research. However, the management contributions are equally essential in the production of valuable results from research and in the establishment of the organization as a permanent and important unit of the business.
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Chandler Medal address as presented here i s an editorial condensation of the address given by M i l t o n C. Whitaker at Columbia University in January 1951 when he received the Chandler Medal. This medal was established in 1910 by former students and friends of Charles F. Chandler, professor of chemistry at Columbia, t o support lectures b y an eminent person in the science of chemistry and its applications. Whitaker’s distinguished position in chemistry may be judged b y the Fact that of the twenty-two previous recipients of the medal, five have been Nobel Prize winners. M i l t o n C. Whitaker has been successful as a chemist, engineer, teacher, editor, and administrator. As a special assistant to Charles F. Chandler, Whitaker proved himself an able chemist. In 1902 he joined the Welsbach Co. as a chemist at their Gloucester, N. J., plant. In 1904 the company recognized his talents as an engineer and placed him in charge of production. H e returned to Columbia in 1910 and inaugurated the department of chemical engineering at Columbia. During this time Milton C. Whitaker he became the second editor of the then Journal OF Industrial and Engineering Chemistry. From 1916 to 1927, when he took up an engineering consulting practice, Whitaker was vice president in charge of research and production for the U. S. InIndustrial Chemical Co. In 1930 Whitaker joined dustrial Alcohol Co., and president of the subsidiary U. the American Cyanamid Co. and organized and headed the laboratories of that company at Stamford, Conn. Although Whitaker retired 4 years ago at the age of 76 as a vice president of American Cyanamid Co., he still maintains an office a t headquarters. His present status i s that of consultant to the company.
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INDUSTRIAL AND ENGINEERING CHEMISTRY INVENTIONS
If new and improved processes developed by research are not promptly adopted and promising new products are not produced, several important results follow. The high mor ale and the alert enthusiasm required in an efficient research organization will soon wither on the vine, or the development may soon be made obsolete by the work of others. The life of the patents and the protection they give the researcher’s work will be shortened, and if the development is not put to work there is no way to get back the money invested in the research. Sympathetic, confident, cooperative, and patient management, willing and able to supply the required amount of money, is a necessary condition for achievement and growth of any industrial research organization in any company. TI-e are not going to try to define invention. Too many experts in this field have tried and failed. We are, however, always interested in the processes which lead to patentable developments. Anybody may see or sense a need, and the technologist can often hand him the ansTser, and thus we have a new invention. That is why a well diversified and seasoned research organization, which has had time to accumulate a large amount of “working capital” in the form of knowledge of the business, experience, and know-how, is so important to industry. Inventions usually lead to patents. Everybody in the chemical industry knows something about patents on new inventions. If a manufacturer neglects this phase of his business he will sooner or later find himself accused of appropriating the property of others and invited to pay rent on that property or move out. If he refuses to do either, the U. S. courts may have to decide, and this is expensive to both the accused and the owner of the patent. It is difficult to understand the frequent attacks which are made on the patent system. It has made this the greatest industrial nation on earth and is the foundation of the great growth of our industries, especially the chemical industry. All of the new developments in the chemical industry take talent, time, and money. The talent has to be employed, the work has to be done, and money has to be spent over a period of years before a thin dime of profit is forthcoming. I n the South African Rand it costs from $10,000,000 to $15,000,000 to develop a gold-producing property, but they know the gold is there before they begin, and they know it will stay there until they come and get it. I n our industry, on the other hand, we sometimes make and pay for a development, then find that the profit is not there because conditions are changing from day to day. Our whole program may be blacked out by the development of others. I n the good old days management had and enjoyed its obscurity. It had nothing t o do but manage its business and plan for growth. How well it did that can be judged by the results achieved in less than fifty years. DRAFT AIVD TAX PROBLEMS
But what is the outlook for the future of management and the chemical industry, now that obscurity has been replaced by a spotlight? Suppose we take a short look a t some of the new problems. When we are preparing for or are in a shooting war, management is a “white-haired boy,” but as soon as the shooting stops he returns to his peacetime usefulness as a “whipping
Vol. 43, No. 5
boy.” I n wax he is ordered to carry out herculean tasks in research, engineering, construction, and production. His know-how, his hand-picked and diversified organization, his research facilities and results, his production plants, his contacts in industry are demanded and freely given. His one ambition is to do the job which has been handed to him, efficiently, promptly, and well. Long before the manager has mastered his new problems the draft boards appear upon the scene and proceed to disrupt completely his technical and production organization by calling his key research workers, engineers, and technologists into military services. England, France, Germany, and Japan found a way to a\-oid wrecking the industrial organizations which sustained the effort of World War 11, but the plans so successfully used by these countries just do not seem to be able to penetrate the brass curtain around the book of rules in America. As soon as the war stops another group takes over, and management is criticized, accused, investigated, and probably indicted. If it finds its production for peace is greater than the demand, it is told that it overexpanded and will have to take the consequences; and if a surge in demand exceeds its capacity, it is told officially that if it does not expand the prcduction the Government will build plants and compete. Industry has much to fear from the growing class legislation, discriminatory lam-laws which destroy the selfreliance and independence of the individual, laws which kill incentive and the independent will to grow and prosper. Such superficial political expedients will have to be replaced by sound common sense and real statesmanship if the free individual and his free enterprises are to survive. Taxes to support the most expensive and extravagant government the world has ever seen are another growing problem. Over half the profits of our industry are now being taken as taxes. Just what does this mean to the small stockholder? Suppose the company in which you own stock earns $100 on your shares. The company is required to pay approximately $50 of your earnings to the government, so it has $50 left. Part of this residue (say 30%) is required to modernize, deiyelop, and safeguard your investment. This leaves $35 out of the original $100 earned. Suppose this is paid out to YGU as a dividend. Nom it is your turn to be taxed on these same earnings. Federal income taxes have to be paid. Let us assume you are in the 30y0 income bracket: you will now have $24.50 left out of the $100 earned by your investment. But you hare not yet paid your state income, your property, your sales, your gasoline, travel, or amusement taxes or the concealed taxes (estimated a t about 30% of the price you have to pay for everything you buy). After you have paid all of these taxes you may as well run over to the savings bank and deposit the few dollars you have left in a fund you are building up to send your children t o college, because there is not enough left to buy a fraction of a share of stock in’a promising new enterprise. Where is the money to finance growth of our industry going to come from? I do not advocate that we spoil technologists to make politicians, God forbid that. However, if this is to be a democratic form of government and freedom of opportunity is to survive, technical people will have to take on their responsibilities as citizens, inform themselves about what is going on, and exercise the sovereign power which they now own.
May 1951
INDUSTRIAL AND ENGINEERING CHEMISTRY WHERE DO WE GO FROM HERE?
Now that we have touched upon the past achievements of
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American chemical industry and briefly commented upon its methods and problems, it might be in order to consider, also briefly, where we go from here. So far, the chemist had had to deal with a small group of well behaved atoms which he thought he understood. Now however, since the physicists have started to shove our atoms around and make them behave like we don’t know what, the chemist may have to revise some of his ideas. What he has to do will depend upon developments and will have to be taken in stride. Formerly, industrial chemists were very secretive. They did not want anybody-public or competitor-to know what they were doing or how they did it. They were guarded in their contacts and avoided technical subjects in their social intercourse. They were not allowed to publish anything, even an analytical method, for fear the information might be used to find out something about the products they made and sold. Their plants were behind an iron curtain, and the chemists and engineers were behind that. I was always opposed to this secrecy. I was roundly roasted by many of my colleagues because I advocated the publication of complete specifications and physical data on all chemical products made and sold, and because I led off by printing all such data on the ones made by mv company. I advocated the publication of process details as soon as patent protection, if any, was launched, in order to foster confidence and cooperation among engineers. All of these things are rapidly coming about; and we have, to the great advantage of all technologists, increasing teamwork among chemists, physicists, chemical engineers, and all other engineering professions. You may have noticed that progress in certain fields seems to reach a ceiling and stick there for years, a generation or more. A stepwise curve of progress can be plotted for the glass, steel, petroleum, soap, coating, textile fiber, and perhaps hundreds of other industries. Have you ever figured out what it was that broke through that progress ceiling and started an industry off on a new and higher level? Somewhere in that woodpile you are almost sure to find the chemist and the chemical engineer. When they invade or are invited into an industry that has been static for years, most anything can happen. When vision, money, and talent gang up, something is bound to happen. As an example, study the history of the Chemicals Division of the Union Carbide and Carbon Corp. It started in a new field less than 40 years ago with nothing but a small budget from the parent company and an idea. Its success must be attributed to the topnotch technical talent which conceived, developed, built, and is now operating the organization. When the doctors with their clinical facilities and experience ganged up with the synthetic organic chemists, the tailormade sulfa drugs lifted the ceiling for the treatment of bacterial infections to a new height, and when the biochemist was brought into the picture the ceiling was still further lifted by the development of such antibiotics as penicillin, streptomycin, and aureomycin. Work still goes on, with plenty of reasons for hope that even cancer may be conquered through this cooperative work. When the chemist and the metallurgist cooperated, great and far-reaching improvements were made in alloy steels for
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high-speed cutting tools, improved strength, corrosion resistance, and many other special properties. Nickel, chromium, molybdenum, vanadium, and a great variety of special alloy steels which have been such a great boon to the chemical industry in solving its problems were not available 40 years ago. The glass industry which for centuries had been static has had its ceiling lifted by the chemist. Tumblers which used to fly to pieces in hot water, and dishes which would crack on a hot surface are now a thing of the past. A new development is in the making where a dish can be heated red hot over a gas flame and then quenched in ice water without damage. Optical glasses, highly resistant chemical glassware, glass fiber, and a whole line of new products continue to be developed and flow into common use. Coatings, paints, and varnishes have been revolutionized by cooperation between the technologists of the chemical industry and the users. It used to take 28 days and five or more coats of paint and varnish to finish the body of an automobile. Such a finish lasted only a year or two. Now tailormade synthetic resins are used and the finish lasts for the life of the car. Instead of drying by oxidation or evaporation, the heat-setting type of synthetic resin has reduced this timeconsuming operation to about an hour. Some companies are now producing cars at the rate of over 100,000 per month. Figure out for yourself how much floor space would be required to finish that number of bodies a t the rate of 28 days per body under the old system, One of the oldest commodities is soap. The ceiling of that industry is being rapidly lifted by the advent of chemical detergents. Many of these produce no suds, but the housewife insists that suds are necessary; so the chemist comes up with a foaming agent to provide the suds and perhaps a wetting agent to make the water wetter. Cooperative research has lifted the ceilings in many other industries. I n turn, almost every other industry has contributed to the growth of the chemical industry. Stainless and other alloy steels, improved glass, synthetic coating compounds, plastics, and detergents have all made their contribution. This cooperation between other professions and other industries and the chemical industry is one of the most hopeful signs for future growth. Chemistry is permeating almost every industrial field, and the growth of industry is being accelerated by the replacement of rule-of-thumb operations by chemical know-how. Many things have happened in the past 50 years, some of which I have mentioned, which have played into the hands of the American chemical industry. I have pointed out some of the obstacles which confront all of us. I visualize that by the year 2000 scientists and engineers will have infiltrated into and will manage practically all industry. The chemical industry with its present momentum will, if given reasonable freedom, far outstrip anything already accomplished in making its contributions to t h e wealth, comfort, health, and security of our people. To achieve the potential which is in sight, men and women trained in the sciences and their applications will enter high places in public life and affairs, formulate laws, and direct their administration, to the end that we may have sound, equitable, and efficient management in the biggest business of them allGovernment,
