A Foreign Affair

I wonder what it would have been like to be an engineer in Westinghouse's Power Equipment Division, circa 1963, in Pittsburgh, designing transformers.

So I'm a middle-aged engineer in 1963. I'd think that as an electrical engineer I'd most certainly be the only wage-earner in the family. Westinghouse hadn't yet begun its drawdown into industrial financial services...no, its revenue still came from the manufacturing of stuff...actually building things instead of financing them. I've got a wife and kids and a dog and most importantly, a reliable car to commute to my new surburban housal unit in Wilkinsburg. I help design a 200MVA transformer bank for shipment to Sacramento. It's installed the following year. My life is good, yes. Sure, I spend most of my weekends boiling glass syringes to sterilize them for re-use the next week as an insulin dependent diabetic, but overall, life is good, yes.

Cut to today, where I'm a middle-aged engineer in 2010. Today while I'd like to wonder about what engineering must have been like in 1963, instead I sit in my cube and receive reports how a 69kV feeder crossarm broke, causing a fault, and when our dispatchers attempt to reclose a few moments later to restore the 8,000-odd customers that were momentarily outaged, the Westinghouse transformer installed in 1964, some 46 years earlier, decides its days are over. Major internal core damage occurs as the sudden pressure and differential relays operate; an internal B-phase fault ends its half-century run.

Today I sit in my cube and think of its replacement. We have an opportunity to get a new laminated core built for this bank...but it will have to be sent overseas to get that done. We have an opportunity to buy a new replacement bank...but it will most certainly come from South Korea or China. Transformer bank engineering and construction is now, nearly universally, a foreign affair.

A foreign affair, because our "new economy" allowed GM to become a financial services company that happens to make cars...as they discovered that the real money wasn't in making shit -- it was providing financial services to others who make it and to the buyers of it. Someone built my housal unit, I'm paying a mortgage to GMAC for it, and GM earns a small sum for handing the transaction. Sit in the middle and collect a percentage managing the financial affairs of other producers and consumers. Increasingly, however, those producers were foreign.

If you followed the demise of Westinghouse you'll know how the transmission services division of this company also delved into "industrial services financing" before closing the East Pittsburgh plant and being swallowed up by ABB in 1989. A financing company that also happened to build power transformers. Interesting parallel. Also interesting is how now they do neither.

I suppose Hyundai Heavy Industries in South Korea will follow the same path. Today they are one of the few producers of bulk power transformers, but if things play out there as they've done here, they'll soon tire of just making stuff and will really tire of watching those Melican financial services companies skim all those profits and soon they'll say "fuck it" and get into that action for themselves. Hyundai Heavy Credit Corporation will become one of the "heavy hitters" in the global industrial financial marketplace...pun intended. Won't take them very long to realize how much money is to be made providing both the manufacturing and the financial servicing of their products...cutting out all those American middlemen.

And what will happen to all those American financiers of 2010, whose fathers were building transformers in Pittsburgh in 1963? What will they do? What will their children do, twenty seven years from now, when manufacturing isn't a viable career and when financing is no longer a viable career?