WEBVTT 00:00:00.000 --> 00:00:02.080 Welcome to the Deep Dive, the place where we 00:00:02.080 --> 00:00:04.740 take those massive stacks of sources, the histories, 00:00:04.919 --> 00:00:06.719 the quarterly reports, the deep dive research, 00:00:07.040 --> 00:00:09.980 and we try to distill it all down. Yeah, we boil 00:00:09.980 --> 00:00:11.820 it down into the essential knowledge that helps 00:00:11.820 --> 00:00:14.500 you, the listener, connect all the dots. And 00:00:14.500 --> 00:00:17.199 today we are undertaking a really fascinating 00:00:17.199 --> 00:00:19.160 piece of, I guess you could call it, corporate 00:00:19.160 --> 00:00:21.719 archaeology. I like that. We're digging into 00:00:21.719 --> 00:00:24.109 a name that... For most people, it's just completely 00:00:24.109 --> 00:00:27.230 synonymous with Americana. You know, Rustic Charm, 00:00:27.230 --> 00:00:30.710 Summer Kitchens. The Mason Jar. The iconic Mason 00:00:30.710 --> 00:00:33.969 Jar brand. Ball. And if that's all you know about 00:00:33.969 --> 00:00:36.810 Ball, then you are in for a serious, serious 00:00:36.810 --> 00:00:39.530 shock today. Absolutely. Our mission for this 00:00:39.530 --> 00:00:42.689 deep dive is to track the epic, what is it, 145 00:00:42.689 --> 00:00:45.329 -year journey of the company that bore that famous 00:00:45.329 --> 00:00:48.590 name. And it's a story that is just defined by 00:00:48.590 --> 00:00:52.270 its willingness to abandon success, to completely 00:00:52.270 --> 00:00:54.369 reinvent itself. It really is. I mean, think 00:00:54.369 --> 00:00:56.549 about this trajectory. This company first mastered 00:00:56.549 --> 00:00:59.189 high -volume glass production. Okay, makes sense. 00:00:59.310 --> 00:01:02.179 Right. Then they executed this. Just radical 00:01:02.179 --> 00:01:05.719 pivot to pioneer aerospace technology for NASA. 00:01:06.019 --> 00:01:09.099 Which is just mind -boggling. And now, maybe 00:01:09.099 --> 00:01:11.799 most surprisingly of all, they are the world's 00:01:11.799 --> 00:01:14.739 largest manufacturer of recyclable aluminum packaging. 00:01:15.460 --> 00:01:17.680 It's the ultimate study in corporate survival 00:01:17.680 --> 00:01:21.000 through like a strategic identity crisis. It's 00:01:21.000 --> 00:01:23.439 like watching a century old tree suddenly decide 00:01:23.439 --> 00:01:26.400 to launch itself into orbit only to later land 00:01:26.400 --> 00:01:28.859 and become, I don't know, a global infrastructure 00:01:28.859 --> 00:01:31.439 utility for the beverage industry. It's wild. 00:01:31.700 --> 00:01:34.019 And the key, what we really want to unpack is 00:01:34.019 --> 00:01:36.700 the mechanism of each pivot. What crisis forced 00:01:36.700 --> 00:01:39.200 them out of glass? How in the world did they 00:01:39.200 --> 00:01:41.359 get the know -how to build satellites? Yeah. 00:01:41.420 --> 00:01:44.730 And why just recently did they sell that? Hugely 00:01:44.730 --> 00:01:47.689 successful $5 .6 billion aerospace division. 00:01:47.810 --> 00:01:50.189 Exactly. When you hear Ball, you think of glass. 00:01:50.650 --> 00:01:53.069 But the reality today is just it's staggering. 00:01:53.310 --> 00:01:56.390 It is. The Ball Corporation today is an $11 .8 00:01:56.390 --> 00:01:59.430 billion powerhouse. It's listed on the New York 00:01:59.430 --> 00:02:02.329 Stock Exchange. Ticker is Bail Now. And they're 00:02:02.329 --> 00:02:04.430 headquartered out in Westminster, Colorado. And 00:02:04.430 --> 00:02:06.129 yes, to your point, they just sold their entire 00:02:06.129 --> 00:02:08.430 high -mining, super prestigious aerospace division 00:02:08.430 --> 00:02:13.349 for $5 .6 billion. In cash. in cash. They just 00:02:13.349 --> 00:02:15.729 decided to simplify their identity and focus 00:02:15.729 --> 00:02:18.330 completely on metal packaging. It's almost half 00:02:18.330 --> 00:02:20.729 the company's valuation in one single move. So 00:02:20.729 --> 00:02:22.569 what we're going to unpack today is how five 00:02:22.569 --> 00:02:24.830 enterprising brothers, the Ball brothers, starting 00:02:24.830 --> 00:02:27.210 out in Buffalo, New York, managed to achieve 00:02:27.210 --> 00:02:31.110 these three massive successful leaps from glass 00:02:31.110 --> 00:02:34.789 to space and then to aluminum to reach their 00:02:34.789 --> 00:02:38.370 current almost unimaginable global scale. It's 00:02:38.370 --> 00:02:40.289 a testament to industrial adaptation, right? 00:02:40.370 --> 00:02:42.669 Yeah. Surviving antitrust restrictions and just 00:02:42.669 --> 00:02:45.050 always, always prioritizing where the resources 00:02:45.050 --> 00:02:47.009 and the market growth are going to be next. I 00:02:47.009 --> 00:02:49.150 can't wait. Let's unpack this. OK, so let's start 00:02:49.150 --> 00:02:51.509 where all great corporate stories seem to begin. 00:02:52.169 --> 00:02:56.030 With a bit of necessity and a tiny bit of borrowed 00:02:56.030 --> 00:02:58.270 money. We're in Buffalo, New York. The year is 00:02:58.270 --> 00:03:01.169 1880. And you have our main characters, the five 00:03:01.169 --> 00:03:03.969 Ball brothers, Frank, Edmund, William, Lucius, 00:03:03.969 --> 00:03:05.750 and George. Right. And they were not, you know, 00:03:05.750 --> 00:03:08.069 born into some industrial dynasty. They started 00:03:08.069 --> 00:03:10.030 a company called the Wooden Jacket Can Company. 00:03:10.250 --> 00:03:12.129 And the seed money for this, get this, it was 00:03:12.129 --> 00:03:15.949 about $200. $200? Yeah. Which they borrowed from 00:03:15.949 --> 00:03:19.280 their uncle. George Harvey Ball, who, as an aside, 00:03:19.539 --> 00:03:22.400 was actually the founder of Keuka College. It 00:03:22.400 --> 00:03:25.000 was a total shoestring operation. And the original 00:03:25.000 --> 00:03:27.000 product description is so important because it 00:03:27.000 --> 00:03:28.639 tells you right away that they were not thinking 00:03:28.639 --> 00:03:30.939 about grandma's jams or pickles. Not at all. 00:03:31.039 --> 00:03:34.099 They were making industrial containers, specifically 00:03:34.099 --> 00:03:37.080 tin cans that were then encased in these wooden 00:03:37.080 --> 00:03:40.120 jackets. The market was heavy industry. Right. 00:03:40.159 --> 00:03:42.020 They were holding things like kerosene, paints, 00:03:42.219 --> 00:03:44.800 varnishes, stuff you did not want to spill. Yeah. 00:03:44.860 --> 00:03:46.939 The visual of this thing is, well, it's kind 00:03:46.939 --> 00:03:49.360 of clunky. It's a metal can for liquids. And 00:03:49.360 --> 00:03:51.419 then you'd slide it into this bulky, protective 00:03:51.419 --> 00:03:53.939 wooden shell. But what's really fascinating here 00:03:53.939 --> 00:03:56.620 and what really dictated that first major pivot 00:03:56.620 --> 00:03:59.120 for the company is what they were actually transporting, 00:03:59.460 --> 00:04:02.699 kerosene. Exactly, kerosene. Because the process 00:04:02.699 --> 00:04:05.319 of refining kerosene back then often involved 00:04:05.319 --> 00:04:07.780 treating it with acid. And the sources point 00:04:07.780 --> 00:04:11.139 to this crucial technical failure. The acid was 00:04:11.139 --> 00:04:14.719 eating through the cans. Precisely. It was causing 00:04:14.719 --> 00:04:17.180 corrosion in the tin cans that they were manufacturing. 00:04:17.759 --> 00:04:20.720 The cans were failing structurally because of 00:04:20.720 --> 00:04:22.720 the acidic liquids they were designed to hold. 00:04:22.860 --> 00:04:25.180 So their immediate solution wasn't, you know, 00:04:25.180 --> 00:04:28.160 to invent a new kind of tin alloy. No, no, it 00:04:28.160 --> 00:04:29.759 was much more practical. They just needed to 00:04:29.759 --> 00:04:31.480 find a material that was chemically resistant. 00:04:31.699 --> 00:04:33.879 And so they were forced to start integrating 00:04:33.879 --> 00:04:37.740 glass inserts into the wood jacketed cans. It 00:04:37.740 --> 00:04:39.439 was the only way to hold the corrosive liquid 00:04:39.439 --> 00:04:42.000 safely. So glass was never the passion project. 00:04:42.100 --> 00:04:44.579 It was just a functional solution to a corrosion 00:04:44.579 --> 00:04:47.519 problem. That's incredible. Yeah. And they were 00:04:47.519 --> 00:04:49.480 initially just buying these glass containers 00:04:49.480 --> 00:04:51.519 from an existing factory in Poughkeepsie, New 00:04:51.519 --> 00:04:55.120 York. But that necessity, it planted the seed. 00:04:55.199 --> 00:04:57.759 The idea that, well, if we have to use glass 00:04:57.759 --> 00:05:00.139 anyway, maybe we should just make it ourselves. 00:05:00.360 --> 00:05:02.139 And that opportunity to, you know, vertically 00:05:02.139 --> 00:05:04.639 integrate, it presented itself pretty quickly. 00:05:04.699 --> 00:05:06.500 And it was all thanks to intellectual property 00:05:06.500 --> 00:05:09.160 law. Right. So around 1884, the brothers get 00:05:09.160 --> 00:05:11.480 wind of the fact that the patent for the key 00:05:11.480 --> 00:05:14.660 home canning product of the era, the Mason Improved 00:05:14.660 --> 00:05:18.699 Fruit Jar. The name everyone knew. The name everyone 00:05:18.699 --> 00:05:21.459 knew. And once that patent became public domain, 00:05:21.740 --> 00:05:24.500 the market was just wide open for anyone who 00:05:24.500 --> 00:05:26.079 could come in and mass produce them efficiently. 00:05:26.589 --> 00:05:29.189 That's a perfect lesson, isn't it? Ball wasn't 00:05:29.189 --> 00:05:31.670 the inventor of the canning jar. They were the 00:05:31.670 --> 00:05:33.970 masters of manufacturing and distribution that 00:05:33.970 --> 00:05:37.189 came after the invention. Exactly. So they jumped 00:05:37.189 --> 00:05:39.550 in full force into the home canning business. 00:05:39.730 --> 00:05:42.129 They started producing jars in all the familiar 00:05:42.129 --> 00:05:45.910 sizes, half gallon, pint, and the smaller ones 00:05:45.910 --> 00:05:48.490 they called midget size. And the glass back then 00:05:48.490 --> 00:05:50.290 wasn't the crystal clear stuff we see today, 00:05:50.389 --> 00:05:53.120 was it? No, not at all. They often used lower 00:05:53.120 --> 00:05:55.639 -grade raw materials, which resulted in glass 00:05:55.639 --> 00:05:57.920 that was either amber -colored or that really 00:05:57.920 --> 00:06:01.120 distinctive aqua blue -green color. Ball blue. 00:06:01.500 --> 00:06:03.959 The famous ball blue. It's become iconic, but 00:06:03.959 --> 00:06:05.800 you have to remember, initially it was just the 00:06:05.800 --> 00:06:07.480 unavoidable result of the materials they had 00:06:07.480 --> 00:06:09.540 on hand. And, of course, they stamped it proudly 00:06:09.540 --> 00:06:12.860 with their logo. So on February 13th, 1886, they 00:06:12.860 --> 00:06:15.319 formalized this rapidly growing business. It's 00:06:15.319 --> 00:06:17.279 now the Ball Brothers Manufacturing Company. 00:06:17.480 --> 00:06:20.480 And almost immediately, they get hit with a massive 00:06:20.480 --> 00:06:23.519 external shock. A disaster, really. Their Buffalo 00:06:23.519 --> 00:06:25.639 factory was completely destroyed by a fire in 00:06:25.639 --> 00:06:29.939 1886. Everything they had built, gone. No, most 00:06:29.939 --> 00:06:32.139 companies would struggle just to rebuild in the 00:06:32.139 --> 00:06:35.920 same spot. But this disaster. It coincided perfectly 00:06:35.920 --> 00:06:38.819 with a major industrial discovery that was changing 00:06:38.819 --> 00:06:41.399 the economics of manufacturing like overnight. 00:06:41.579 --> 00:06:44.040 The discovery of just massive reserves of natural 00:06:44.040 --> 00:06:45.819 gas in the Midwest. And this is where we have 00:06:45.819 --> 00:06:47.879 to introduce that critical thread that runs through 00:06:47.879 --> 00:06:51.750 their whole history. Energy reliance. Glass making 00:06:51.750 --> 00:06:54.410 needs immense, consistent heat. We're talking 00:06:54.410 --> 00:06:56.990 hundreds and hundreds of degrees to melt silica. 00:06:57.050 --> 00:06:59.649 And using natural gas was just vastly cheaper 00:06:59.649 --> 00:07:02.149 and way more efficient than using coal, which 00:07:02.149 --> 00:07:04.310 was the dominant fuel source back in Buffalo. 00:07:04.670 --> 00:07:06.769 So the brothers realized if we stay in Buffalo, 00:07:06.949 --> 00:07:09.089 we're looking at high operating costs for the 00:07:09.089 --> 00:07:11.870 rest of our existence. But if we move west. Instant 00:07:11.870 --> 00:07:14.389 competitive advantage. The sources say that Frank 00:07:14.389 --> 00:07:16.389 Ball was traveling and heard about this natural 00:07:16.389 --> 00:07:19.089 gas boom that was hitting Ohio and Indiana. And 00:07:19.089 --> 00:07:21.290 he just realized that Muncie, Indiana was the 00:07:21.290 --> 00:07:24.100 place to be. And Muncie at the time was desperate 00:07:24.100 --> 00:07:26.759 for industry. The town leaders there were looking 00:07:26.759 --> 00:07:29.360 to capitalize on their new cheap energy resource, 00:07:29.660 --> 00:07:32.600 and they offered the Ball brothers a deal that 00:07:32.600 --> 00:07:34.860 was, I mean, it was simply too good to refuse. 00:07:35.079 --> 00:07:36.980 Oh, it was a phenomenal contract. Frank Ball 00:07:36.980 --> 00:07:39.980 signed a deal for seven acres of land to build 00:07:39.980 --> 00:07:43.699 a factory, a gas well provided for their exclusive 00:07:43.699 --> 00:07:46.079 use. They gave them their own gas well. Their 00:07:46.079 --> 00:07:49.279 own gas well, plus $5 ,000 in cash, which was 00:07:49.279 --> 00:07:52.470 a huge sum for a startup. that had just literally 00:07:52.470 --> 00:07:55.610 burned to the ground and, crucially, a railroad 00:07:55.610 --> 00:07:58.430 connection. They were essentially being paid 00:07:58.430 --> 00:08:01.470 and subsidized to move their entire operation. 00:08:01.750 --> 00:08:03.790 That relocation commitment was just massive. 00:08:04.170 --> 00:08:06.410 Construction on the Muncie factory started in 00:08:06.410 --> 00:08:09.149 September 1887, and the brothers started making 00:08:09.149 --> 00:08:11.529 plans to move the entire glass manufacturing 00:08:11.529 --> 00:08:14.149 operation from New York. It wasn't an instant 00:08:14.149 --> 00:08:16.069 move, though. Frank and Edmund, they made the 00:08:16.069 --> 00:08:18.220 initial leap. William and George stayed behind 00:08:18.220 --> 00:08:20.120 in New York for a little bit to keep operating 00:08:20.120 --> 00:08:22.480 the metal stamping works. They still had to make 00:08:22.480 --> 00:08:24.639 those zinc lids. Right. Keep the cash flow going. 00:08:24.959 --> 00:08:28.360 Exactly. Yeah. But by 1889, the company headquarters 00:08:28.360 --> 00:08:30.959 and all the glass and metal manufacturing had 00:08:30.959 --> 00:08:34.169 moved to Muncie. And the Romani brothers joined 00:08:34.169 --> 00:08:37.429 them in the 1890s, cementing Muncie as the home 00:08:37.429 --> 00:08:40.289 of the Ball Empire for decades. It's a subtle 00:08:40.289 --> 00:08:42.690 but really interesting historical note, though, 00:08:42.769 --> 00:08:45.289 that the first products made in that Muncie factory 00:08:45.289 --> 00:08:49.269 in March of 1888. They weren't fruit jars. No, 00:08:49.350 --> 00:08:51.250 they were still focused on those industrial needs, 00:08:51.409 --> 00:08:53.690 things like oil containers and lamp chimneys. 00:08:53.830 --> 00:08:56.649 But that cheap gas, it just allowed them to scale 00:08:56.649 --> 00:08:58.990 up the fruit jar business dramatically. And the 00:08:58.990 --> 00:09:01.409 growth was, I mean, phenomenal, even when you 00:09:01.409 --> 00:09:03.850 factor in all the national economic turbulence 00:09:03.850 --> 00:09:06.129 of the time. Yeah, despite having more factory 00:09:06.129 --> 00:09:09.389 fires in Muncie in 1891 and 1898 and the huge 00:09:09.389 --> 00:09:11.990 national economic panic of 1893, their production 00:09:11.990 --> 00:09:14.769 just surged. They went from making 22 million 00:09:14.769 --> 00:09:19.200 fruit jars in 1894. to a staggering 37 million 00:09:19.200 --> 00:09:22.120 jars by 1897. So here's where they leveraged 00:09:22.120 --> 00:09:24.659 technology to really establish true market dominance. 00:09:24.860 --> 00:09:27.679 In 1898, they patent the FC ball machine. And 00:09:27.679 --> 00:09:29.960 this wasn't just like a minor upgrade. This was 00:09:29.960 --> 00:09:32.080 a machine that introduced mass production through 00:09:32.080 --> 00:09:34.620 semi -automatic glass blowing. Which was a game 00:09:34.620 --> 00:09:37.909 changer. Before this. Glass production relied 00:09:37.909 --> 00:09:41.190 so heavily on skilled manual glass blowers. It 00:09:41.190 --> 00:09:43.370 was slow. It was expensive. It was inconsistent. 00:09:43.850 --> 00:09:46.289 It was a craft. It was a craft. This semi -automatic 00:09:46.289 --> 00:09:48.250 machine, which was developed by Frank and his 00:09:48.250 --> 00:09:51.090 associates, it just slashed their labor costs 00:09:51.090 --> 00:09:53.789 and dramatically increased the consistency of 00:09:53.789 --> 00:09:57.230 their output. This innovation gave them a monumental 00:09:57.230 --> 00:10:00.690 competitive edge over basically every other glass 00:10:00.690 --> 00:10:03.590 manufacturer in the country. So by 1905, just 00:10:03.590 --> 00:10:05.889 seven years after that patent, they're producing 00:10:05.889 --> 00:10:10.009 60 million canning jars a year. 60 million. And 00:10:10.009 --> 00:10:12.049 they'd already acquired seven other glass factories. 00:10:12.289 --> 00:10:14.750 Their initial strategy chasing that cheap energy 00:10:14.750 --> 00:10:17.590 had enabled them to invest in and then perfect 00:10:17.590 --> 00:10:20.210 this mass manufacturing technology. But that 00:10:20.210 --> 00:10:22.850 initial crucial advantage, that natural gas boom, 00:10:23.009 --> 00:10:26.210 it couldn't last forever. No, the supply in Indiana 00:10:26.210 --> 00:10:28.529 was famously short -lived. It had been exploited 00:10:28.529 --> 00:10:31.210 so rapidly by so many industries that it started 00:10:31.210 --> 00:10:33.629 to dry up. So when the gas supplies in the area 00:10:33.629 --> 00:10:36.029 began to diminish, the Ball brothers had to adapt 00:10:36.029 --> 00:10:38.820 again. And they did. They quickly installed gas 00:10:38.820 --> 00:10:40.919 converters, which allowed them to use Indiana 00:10:40.919 --> 00:10:43.320 coal instead, ensuring that their manufacturing 00:10:43.320 --> 00:10:46.039 operations, their competitive advantage, continued 00:10:46.039 --> 00:10:48.919 without disruption. So the key takeaway from 00:10:48.919 --> 00:10:51.299 this whole opening chapter is that Ball Corporation 00:10:51.299 --> 00:10:55.059 was really built on a series of these rapid industrial 00:10:55.059 --> 00:10:58.019 adaptations. Absolutely. The initial product 00:10:58.019 --> 00:11:01.139 was forced by kerosene corrosion. The primary 00:11:01.139 --> 00:11:04.460 market was seized because a patent expired. And 00:11:04.460 --> 00:11:06.620 their competitive advantage was achieved by chasing 00:11:06.620 --> 00:11:09.740 cheap localized energy and then mastering proprietary 00:11:09.740 --> 00:11:12.480 manufacturing tech. It's a playbook for success, 00:11:12.600 --> 00:11:15.090 really. So as we move into the early 20th century, 00:11:15.350 --> 00:11:17.450 the Ball Company, they're not just interested 00:11:17.450 --> 00:11:19.450 in making jars anymore. They're interested in 00:11:19.450 --> 00:11:22.470 dominating the entire ecosystem of home preservation. 00:11:22.529 --> 00:11:25.029 Yes. They began to consolidate their position 00:11:25.029 --> 00:11:27.029 through what we now call vertical integration. 00:11:27.129 --> 00:11:30.029 By 1922, they formally changed their name to 00:11:30.029 --> 00:11:32.370 the Ball Brothers Company, and they recognized 00:11:32.370 --> 00:11:35.110 that their core product, the canning jar, isn't 00:11:35.110 --> 00:11:38.490 just a piece of glass. Right. It's glass, it's 00:11:38.490 --> 00:11:40.269 zinc for the metal lids, it's rubber for the 00:11:40.269 --> 00:11:42.710 sealing rings, and it's paper for the packaging. 00:11:42.889 --> 00:11:45.110 And they wanted to control that entire supply 00:11:45.110 --> 00:11:47.049 chain. So they just started buying their own 00:11:47.049 --> 00:11:50.330 suppliers one by one. Pretty much. They acquired 00:11:50.330 --> 00:11:52.929 a zinc strip rolling mill so they could produce 00:11:52.929 --> 00:11:55.250 the sheet metal for the lids themselves. They 00:11:55.250 --> 00:11:57.350 started manufacturing their own rubber sealing 00:11:57.350 --> 00:11:59.870 rings. They even bought a paper mill for their 00:11:59.870 --> 00:12:02.330 packaging materials. Which gives them just tremendous 00:12:02.330 --> 00:12:06.370 control over cost. quality, and crucially, the 00:12:06.370 --> 00:12:08.710 speed of their output. And this integration, 00:12:08.870 --> 00:12:12.830 it extended far beyond just the jars. Later on, 00:12:12.830 --> 00:12:15.090 they expanded this strategy by acquiring companies 00:12:15.090 --> 00:12:19.059 that specialized in tin, steel, and even plastic 00:12:19.059 --> 00:12:21.960 packaging components. They were slowly transforming 00:12:21.960 --> 00:12:24.440 into a comprehensive packaging solutions provider, 00:12:24.679 --> 00:12:26.879 even if the glass jar was still their public 00:12:26.879 --> 00:12:28.840 face. And their consumer presence was really 00:12:28.840 --> 00:12:31.179 cemented through education, which I find fascinating. 00:12:31.360 --> 00:12:34.519 In 1909, they published The Correct Method for 00:12:34.519 --> 00:12:37.240 Preserving Fruit. Which was the direct predecessor 00:12:37.240 --> 00:12:40.080 to the famous ball blue book of home canning 00:12:40.080 --> 00:12:42.679 recipes. It shows such a sophisticated understanding 00:12:42.679 --> 00:12:44.820 of branding, doesn't it? They weren't just selling 00:12:44.820 --> 00:12:47.610 you a product. They were selling the entire lifestyle 00:12:47.610 --> 00:12:50.049 and the knowledge base you needed to actually 00:12:50.049 --> 00:12:52.570 use that product effectively. But this kind of 00:12:52.570 --> 00:12:55.850 rapid industrial scaling and consolidation, it 00:12:55.850 --> 00:12:59.110 brought with it some inherent challenges, particularly 00:12:59.110 --> 00:13:01.610 when it came to labor. Right, which leads us 00:13:01.610 --> 00:13:04.669 to a really crucial historical moment that's 00:13:04.669 --> 00:13:08.149 often minimized in, you know, the official corporate 00:13:08.149 --> 00:13:11.149 histories, the labor disputes at the Muncie facility. 00:13:11.470 --> 00:13:14.049 We're talking about the 1910 strike. In March 00:13:14.049 --> 00:13:16.750 of that year, workers who were organized with 00:13:16.750 --> 00:13:19.710 local 200 of the industrial workers of the world. 00:13:19.870 --> 00:13:22.309 The IWW, the Wobblies. Exactly, the Wobblies. 00:13:22.389 --> 00:13:24.710 Yeah. They went on strike demanding wage increases. 00:13:25.009 --> 00:13:26.629 And a quick settlement was actually reached, 00:13:26.730 --> 00:13:29.769 wasn't it, on March 29th? It was. But then management 00:13:29.769 --> 00:13:32.210 very quickly reneged on the agreement and threatened 00:13:32.210 --> 00:13:35.389 lockout. So the strike continued. But this is 00:13:35.389 --> 00:13:37.549 where the deeper industrial tension of the era. 00:13:37.960 --> 00:13:40.159 really comes into play. Because the strike effort 00:13:40.159 --> 00:13:42.559 was severely hampered by the machinists, the 00:13:42.559 --> 00:13:45.659 skilled workers. Right. The machinists were affiliated 00:13:45.659 --> 00:13:47.899 with the American Federation of Labor, the AFL, 00:13:47.919 --> 00:13:51.049 and they refused to join the IWW strike. And 00:13:51.049 --> 00:13:54.070 that matters so much because the IWW and the 00:13:54.070 --> 00:13:57.029 AFL represented two, I mean, radically different 00:13:57.029 --> 00:13:59.250 philosophies of unionism. Totally different. 00:13:59.350 --> 00:14:02.509 The IWW championed what they called industrial 00:14:02.509 --> 00:14:05.009 unionism, which meant everyone in the factory, 00:14:05.169 --> 00:14:07.370 skilled or unskilled, should strike together 00:14:07.370 --> 00:14:10.590 as one unit. The AFL, on the other hand, focused 00:14:10.590 --> 00:14:13.549 on craft unionism, which was all about protecting 00:14:13.549 --> 00:14:15.889 the skilled trades. So with that division, the 00:14:15.889 --> 00:14:18.860 company could exploit it. Exactly. Because those 00:14:18.860 --> 00:14:21.080 skilled machinists refused to join the general 00:14:21.080 --> 00:14:23.580 industrial strike, the ball factory could continue 00:14:23.580 --> 00:14:26.799 to function, even if it was slowly. This division 00:14:26.799 --> 00:14:29.340 ultimately fractured the entire effort, and the 00:14:29.340 --> 00:14:31.539 strike failed by the end of April. It really 00:14:31.539 --> 00:14:34.419 underscores the immense power the company wielded 00:14:34.419 --> 00:14:37.059 as a major industrial employer in Indiana. They 00:14:37.059 --> 00:14:39.200 were able to exploit those divisions within the 00:14:39.200 --> 00:14:41.600 labor movement. Despite those internal challenges, 00:14:41.740 --> 00:14:44.279 though, their dominance in the home canning market 00:14:44.279 --> 00:14:48.500 was just undeniable. Pre -1933, Ball was the 00:14:48.500 --> 00:14:51.940 largest domestic manufacturer. And by 1939, get 00:14:51.940 --> 00:14:55.440 this, they manufactured an incredible 54 % of 00:14:55.440 --> 00:14:59.440 all canning jars made in the U .S. 54 %? I mean, 00:14:59.440 --> 00:15:01.899 that's a market monopoly in all but name. But 00:15:01.899 --> 00:15:04.000 that level of saturation means you are incredibly 00:15:04.000 --> 00:15:07.059 vulnerable when the market shifts. And the Great 00:15:07.059 --> 00:15:10.539 Depression caused a huge sustained drop in consumer 00:15:10.539 --> 00:15:13.179 demand for home canning jars. Families just couldn't 00:15:13.179 --> 00:15:15.620 afford to stock up on the volume of produce they 00:15:15.620 --> 00:15:17.899 used to preserve. So they pivoted again. They 00:15:17.899 --> 00:15:20.460 used their established glass lines to start manufacturing 00:15:20.460 --> 00:15:23.100 other commercial jars and bottles. Anything they 00:15:23.100 --> 00:15:25.139 could do to keep the factories running. And then 00:15:25.139 --> 00:15:27.679 World War II forced an even more complete, though 00:15:27.679 --> 00:15:30.700 temporary, conversion. Right. They converted 00:15:30.700 --> 00:15:32.840 a substantial part of their operations to produce 00:15:32.840 --> 00:15:35.159 shells and machine parts for the military effort, 00:15:35.340 --> 00:15:37.899 leveraging all that expertise they had in metal 00:15:37.899 --> 00:15:40.620 stamping and fabrication. This ability to pivot 00:15:40.620 --> 00:15:43.120 proved their manufacturing strength. But the 00:15:43.120 --> 00:15:45.799 true crisis, the one that really defined their 00:15:45.799 --> 00:15:49.379 future, it came after the war. And it involved 00:15:49.379 --> 00:15:52.690 the U .S. government. Two major hurdles. One 00:15:52.690 --> 00:15:55.330 was legal, one was commercial, and together they 00:15:55.330 --> 00:15:57.889 forced the company to completely abandon its 00:15:57.889 --> 00:16:00.450 legacy. Okay, let's start with the legal roadblock 00:16:00.450 --> 00:16:02.470 because this is something we need to dive into 00:16:02.470 --> 00:16:06.580 deeper. The 1947 U .S. Supreme Court... antitrust 00:16:06.580 --> 00:16:09.419 case. Right. So Ball was one of several defendants 00:16:09.419 --> 00:16:12.679 in this major federal case. The allegation, which 00:16:12.679 --> 00:16:15.279 dated back years, centered on anti -competitive 00:16:15.279 --> 00:16:17.820 practices, you know, things like market control 00:16:17.820 --> 00:16:20.879 and potential price fixing within the very consolidated 00:16:20.879 --> 00:16:24.080 glass jar industry. And the final decision, while 00:16:24.080 --> 00:16:26.980 it didn't dismantle the company, it was a devastating 00:16:26.980 --> 00:16:28.980 restriction on their future growth strategy. 00:16:29.279 --> 00:16:31.759 It was. How exactly did it restrict them? That 00:16:31.759 --> 00:16:34.039 wasn't just a fine or something, was it? No, 00:16:34.059 --> 00:16:35.899 it was structural. The decision specifically 00:16:35.899 --> 00:16:38.259 mandated that Ball was now required to seek and 00:16:38.259 --> 00:16:40.460 receive prior court approval before they could 00:16:40.460 --> 00:16:42.960 acquire any other glass manufacturer or any company 00:16:42.960 --> 00:16:46.179 involved in making related machinery. Wow. OK, 00:16:46.259 --> 00:16:48.639 just think about that for a moment. This immediately 00:16:48.639 --> 00:16:51.419 choked off their primary strategy for growth 00:16:51.419 --> 00:16:54.159 and consolidation, which was buying up competitors 00:16:54.159 --> 00:16:56.860 or key component suppliers within their core 00:16:56.860 --> 00:16:59.139 industry. So the court effectively told them. 00:16:59.519 --> 00:17:02.320 You cannot expand any further in the glass industry 00:17:02.320 --> 00:17:05.220 without our explicit permission. Their entire 00:17:05.220 --> 00:17:07.559 established playbook of vertical and horizontal 00:17:07.559 --> 00:17:10.460 integration in glass was just shut down by the 00:17:10.460 --> 00:17:13.170 highest court in the land. And at the same time, 00:17:13.230 --> 00:17:16.009 the consumer market for canning jars was in terminal 00:17:16.009 --> 00:17:18.910 decline. Right. The post -war economy was affluent. 00:17:18.990 --> 00:17:21.470 People were moving toward frozen and commercially 00:17:21.470 --> 00:17:24.329 prepackaged food. The need for home preservation 00:17:24.329 --> 00:17:27.069 was just shrinking. The combination was absolutely 00:17:27.069 --> 00:17:29.470 lethal. Legal restrictions prevented them from 00:17:29.470 --> 00:17:31.829 expanding horizontally in glass, and consumer 00:17:31.829 --> 00:17:34.150 trends were shrinking their core market. And 00:17:34.150 --> 00:17:36.509 the ultimate critical data point that proves 00:17:36.509 --> 00:17:40.410 this. In 1949, Ball suffered its first net operating 00:17:40.410 --> 00:17:43.569 loss in... company history. That net loss is 00:17:43.569 --> 00:17:46.289 the true inflection point. It signaled the end 00:17:46.289 --> 00:17:49.609 of their historical identity as primarily a glass 00:17:49.609 --> 00:17:52.630 jar maker. The executives looked at the restrictions, 00:17:52.829 --> 00:17:54.910 they looked at the shrinking market, and they 00:17:54.910 --> 00:17:57.150 realized that survival meant diversification, 00:17:57.390 --> 00:18:00.390 not just adaptation within their existing framework. 00:18:00.650 --> 00:18:03.190 It's a perfect illustration of how external crisis 00:18:03.190 --> 00:18:06.299 can force corporate genius, isn't it? When the 00:18:06.299 --> 00:18:09.079 door to growth in their current field was violently 00:18:09.079 --> 00:18:11.579 slammed shut by the Supreme Court, they were 00:18:11.579 --> 00:18:14.599 forced to seek entirely new horizons. The horizon 00:18:14.599 --> 00:18:17.079 they chose was, well, it was literally out of 00:18:17.079 --> 00:18:19.380 this world. Okay, we really have to address the 00:18:19.380 --> 00:18:22.079 biggest, most unbelievable leap in this entire 00:18:22.079 --> 00:18:24.880 history. They are legally restricted, they're 00:18:24.880 --> 00:18:27.079 suffering a net loss, and they're locked out 00:18:27.079 --> 00:18:30.480 of the glass market. How do you pivot from manufacturing 00:18:30.480 --> 00:18:33.059 home canning jars and military shells in Muncie, 00:18:33.140 --> 00:18:36.000 Indiana, to building hardware for NASA? It's 00:18:36.000 --> 00:18:38.019 a radical transition. Where do you even find 00:18:38.019 --> 00:18:40.880 the engineering talent for that? This transition 00:18:40.880 --> 00:18:43.859 is so radical that it really highlights their 00:18:43.859 --> 00:18:45.619 commitment to survival and their willingness 00:18:45.619 --> 00:18:48.960 to spend a ton of capital just to acquire expertise 00:18:48.960 --> 00:18:52.220 they didn't have. Throughout the 1950s, the company 00:18:52.220 --> 00:18:55.519 was exploring these high growth sectors and the 00:18:55.519 --> 00:18:57.920 nascent aerospace industry was, I mean, it was 00:18:57.920 --> 00:19:00.430 a massive. government funded opportunity. And 00:19:00.430 --> 00:19:02.369 they had to have known they couldn't just hire 00:19:02.369 --> 00:19:04.690 a few engineers in Indiana and call themselves 00:19:04.690 --> 00:19:08.109 a space company. They needed critical mass. Exactly. 00:19:08.430 --> 00:19:10.970 And they solved that talent problem by strategically 00:19:10.970 --> 00:19:13.930 locating their new venture. They formed the Ball 00:19:13.930 --> 00:19:16.329 Brothers Research Corporation and the established 00:19:16.329 --> 00:19:19.970 labs in Boulder, Colorado. OK. That makes sense. 00:19:20.170 --> 00:19:22.950 Right. Boulder was already emerging as this significant 00:19:22.950 --> 00:19:26.190 center for defense, atmospheric and space research. 00:19:26.410 --> 00:19:28.569 It was right next to institutions like the University 00:19:28.569 --> 00:19:31.250 of Colorado. So they hired engineers and physicists, 00:19:31.690 --> 00:19:34.230 many of them likely recruited directly from research 00:19:34.230 --> 00:19:37.269 institutions like Caltech and MIT. So they brought 00:19:37.269 --> 00:19:40.670 in completely new high tech blood and just radically 00:19:40.670 --> 00:19:43.089 shifted the company's internal culture. That 00:19:43.089 --> 00:19:46.109 geographic move was absolutely crucial. They 00:19:46.109 --> 00:19:48.130 were intentionally separating the future of the 00:19:48.130 --> 00:19:50.549 company. boulder from the restrictive legacy 00:19:50.549 --> 00:19:53.289 of muncie they officially began manufacturing 00:19:53.289 --> 00:19:56.250 aerospace equipment around 1959 and their investment 00:19:56.250 --> 00:19:58.930 paid off i mean rapidly and spectacularly which 00:19:58.930 --> 00:20:01.410 is why this gamble is so famous the timeline 00:20:01.410 --> 00:20:04.829 is just so tight just three years after they 00:20:04.829 --> 00:20:08.960 started manufacturing on march 7 1962 Ball launched 00:20:08.960 --> 00:20:12.500 its OS01, the orbiting solar observatory satellite, 00:20:12.819 --> 00:20:15.259 which was designed and built specifically for 00:20:15.259 --> 00:20:17.900 NASA. This wasn't a screw or a widget. This was 00:20:17.900 --> 00:20:20.799 a complete, successful scientific satellite delivered 00:20:20.799 --> 00:20:23.220 for the U .S. space program. In three years. 00:20:23.400 --> 00:20:25.740 That level of technical achievement instantly 00:20:25.740 --> 00:20:28.000 validated their whole radical diversification 00:20:28.000 --> 00:20:30.279 strategy. They went from making containers for 00:20:30.279 --> 00:20:32.480 preserved food to making containers for scientific 00:20:32.480 --> 00:20:34.500 instruments in outer space. And that success, 00:20:34.819 --> 00:20:37.980 it just cemented their new identity. OSO -1 led 00:20:37.980 --> 00:20:40.240 directly to massive follow -on contracts for 00:20:40.240 --> 00:20:43.519 seven total satellites in the OSO program. Ball 00:20:43.519 --> 00:20:46.599 was now a bona fide, reliable contractor in the 00:20:46.599 --> 00:20:48.920 high -stakes U .S. space race. But those high 00:20:48.920 --> 00:20:51.420 stakes also meant high risk, and we can't just 00:20:51.420 --> 00:20:53.480 gloss over the immense danger that's involved 00:20:53.480 --> 00:20:55.980 in this type of work. No, we absolutely have 00:20:55.980 --> 00:20:58.059 to acknowledge the tragic costs of innovation 00:20:58.059 --> 00:21:02.160 here. In 1964, during development, there was 00:21:02.160 --> 00:21:04.500 an explosion at the facility that tragically 00:21:04.500 --> 00:21:07.900 killed three workers and damaged the OSO2 satellite. 00:21:08.200 --> 00:21:10.400 Which really underscores that while the Aerospace 00:21:10.400 --> 00:21:13.339 Division brought prestige and high margins, it 00:21:13.339 --> 00:21:16.480 was inherently volatile and dangerous work. It's 00:21:16.480 --> 00:21:18.940 a world away from the relatively benign processes 00:21:18.940 --> 00:21:22.519 of bottling jam. Absolutely. Despite that tragedy, 00:21:22.579 --> 00:21:25.039 though, the company continued expanding its research 00:21:25.039 --> 00:21:27.799 and manufacturing capabilities into avionics 00:21:27.799 --> 00:21:30.420 and aerospace systems. The identity shift was 00:21:30.420 --> 00:21:32.740 complete. They weren't the glass company anymore. 00:21:32.920 --> 00:21:35.380 They were the satellite company, providing stable, 00:21:35.500 --> 00:21:37.920 high -margin government contract revenue. And 00:21:37.920 --> 00:21:39.839 back in Indiana, the original foundation was 00:21:39.839 --> 00:21:42.170 just being dismantled. The Muncie glass plant, 00:21:42.329 --> 00:21:44.430 the heart of the Ball empire for so long, it 00:21:44.430 --> 00:21:47.289 closed in 1962. Yeah, glass production continued 00:21:47.289 --> 00:21:49.069 at some other facilities for a while, but that 00:21:49.069 --> 00:21:51.829 chapter was functionally closed. So by 1969, 00:21:52.250 --> 00:21:54.670 the corporate identity was solidified around 00:21:54.670 --> 00:21:58.089 its new ventures. The company was formally renamed 00:21:58.089 --> 00:22:02.089 simply Ball Corporation. And in that same pivotal 00:22:02.089 --> 00:22:06.109 year, 1969, the year of the moon landing. Of 00:22:06.109 --> 00:22:09.150 all years, they made the second strategic acquisition 00:22:09.150 --> 00:22:11.349 that really defines their current existence. 00:22:11.630 --> 00:22:14.869 Right. They acquired Jeffco Manufacturing Company, 00:22:15.089 --> 00:22:18.029 a maker of recyclable aluminum beverage cans. 00:22:18.289 --> 00:22:21.349 Wait a minute. Why aluminum cans? They just successfully 00:22:21.349 --> 00:22:23.369 established themselves in aerospace, which is 00:22:23.369 --> 00:22:26.289 high margin and stable. Aluminum cans are high 00:22:26.289 --> 00:22:29.289 volume, super competitive, and relatively low 00:22:29.289 --> 00:22:31.500 margin. Why would you enter that market? That's 00:22:31.500 --> 00:22:33.720 the key question. They understood market dynamics, 00:22:33.740 --> 00:22:36.440 and they leveraged their core expertise. Ball 00:22:36.440 --> 00:22:39.000 had decades of experience in high -volume, precision 00:22:39.000 --> 00:22:41.319 metal fabrication from making all those tin cans, 00:22:41.619 --> 00:22:44.140 the zinc lids, the military shells. So the rapidly 00:22:44.140 --> 00:22:46.079 emerging aluminum beverage can market, which 00:22:46.079 --> 00:22:48.140 was being driven by consumer convenience and 00:22:48.140 --> 00:22:50.519 this new recyclability movement, it was a perfect 00:22:50.519 --> 00:22:52.700 fit for their skills. Right. It utilized their 00:22:52.700 --> 00:22:54.720 existing metal skills on a massive commercial 00:22:54.720 --> 00:22:57.259 scale that was completely non -restricted and 00:22:57.259 --> 00:23:00.799 non -regulated by that antitrust ruling. entry 00:23:00.799 --> 00:23:04.119 strategy was not timid at all. The Jeffco acquisition 00:23:04.119 --> 00:23:07.000 immediately made Ball the largest producer of 00:23:07.000 --> 00:23:09.700 recyclable beverage cans in the world. Wow. So 00:23:09.700 --> 00:23:11.180 they entered the market right at the top. They 00:23:11.180 --> 00:23:14.960 just bypassed years of incremental growth using 00:23:14.960 --> 00:23:17.160 all that massive capital flow they had built 00:23:17.160 --> 00:23:19.359 up from the aerospace contracts. So now they 00:23:19.359 --> 00:23:21.579 were diversified across two radically different 00:23:21.579 --> 00:23:24.720 sectors, stable, high margin aerospace contracts 00:23:24.720 --> 00:23:27.759 on one hand and a volatile, high volume global 00:23:27.759 --> 00:23:30.339 packaging on the other. And with this new industrial 00:23:30.339 --> 00:23:32.319 architecture in place, the family -run business 00:23:32.319 --> 00:23:34.700 was finally ready to join the global public markets. 00:23:34.859 --> 00:23:37.039 Yep. The company's stock went public on July 00:23:37.039 --> 00:23:40.539 13, 1972, and it began trading on the New York 00:23:40.539 --> 00:23:43.779 Stock Exchange in 1973. The fact that they survived 00:23:43.779 --> 00:23:46.839 that 1947 antitrust case and the net loss of 00:23:46.839 --> 00:23:50.059 1949 by completely transitioning into two separate, 00:23:50.200 --> 00:23:53.059 high growth, unrelated industries. It's not just 00:23:53.059 --> 00:23:55.279 a crucial piece of corporate history. It's a 00:23:55.279 --> 00:23:57.380 masterclass in risk management and adaptation. 00:23:57.640 --> 00:24:00.059 But to fully move forward, the final piece of 00:24:00.059 --> 00:24:02.480 the legacy, the source of their fame, it needed 00:24:02.480 --> 00:24:05.279 to be completely separated. So if the Ball Corporation 00:24:05.279 --> 00:24:08.579 is now this multi -billion dollar aluminum and 00:24:08.579 --> 00:24:11.619 aerospace firm, what is the connection to the 00:24:11.619 --> 00:24:14.220 jars that you still see on the shelf at the hardware 00:24:14.220 --> 00:24:16.920 store? This has to be a key point of confusion 00:24:16.920 --> 00:24:20.140 for almost every consumer. It is, and it requires 00:24:20.140 --> 00:24:22.740 a really clear distinction between the current 00:24:22.740 --> 00:24:26.220 corporation and its branded legacy. The Ball 00:24:26.220 --> 00:24:28.720 Corporation stopped producing its own glass jars 00:24:28.720 --> 00:24:31.980 entirely. Their final glass manufacturing operations 00:24:31.980 --> 00:24:34.859 were sold off in 1996. Okay, but they kept the 00:24:34.859 --> 00:24:37.519 brand, right? The iconic jar, the blue -green 00:24:37.519 --> 00:24:40.359 glass, the logo that was still theirs? Technically, 00:24:40.359 --> 00:24:43.380 yes, but only for a short period. The home canning 00:24:43.380 --> 00:24:45.319 business, which included that famous trademark, 00:24:45.579 --> 00:24:48.500 was first spun off into a subsidiary called Altrista 00:24:48.500 --> 00:24:51.259 in 1993. Okay. And then they sold off Altrista 00:24:51.259 --> 00:24:53.740 in 1996 as a completely freestanding corporation. 00:24:54.160 --> 00:24:55.920 And then the subsequent corporate trail just 00:24:55.920 --> 00:24:58.880 gets dizzying. It really does. Altrista later 00:24:58.880 --> 00:25:02.279 renamed itself Jarden Corporation in 2001. Jarden 00:25:02.279 --> 00:25:04.079 then merged with Newell Rubbermaid to become 00:25:04.079 --> 00:25:07.029 Newell Brands in 2016. So here is the critical 00:25:07.029 --> 00:25:09.950 distinction for you, the listener. Newell Brands 00:25:09.950 --> 00:25:13.109 now licenses the famous ball -registered trademark 00:25:13.109 --> 00:25:15.829 for its home canning products. So the iconic 00:25:15.829 --> 00:25:18.470 mason jar brand that evokes all that nostalgia 00:25:18.470 --> 00:25:21.839 is today a licensing deal. And the corporation 00:25:21.839 --> 00:25:24.940 that shares the name, the $11 .8 billion giant, 00:25:25.180 --> 00:25:28.299 is busy making soda cans and, until recently, 00:25:28.500 --> 00:25:31.259 satellites. That distinction is fundamental to 00:25:31.259 --> 00:25:33.160 understanding the modern company. Absolutely. 00:25:33.200 --> 00:25:35.519 The modern ball corporation had shed its glass 00:25:35.519 --> 00:25:38.559 past and was focused entirely on global expansion 00:25:38.559 --> 00:25:40.779 and packaging and managing its aerospace contracts. 00:25:41.099 --> 00:25:44.140 And as its focus became more global, Its roots 00:25:44.140 --> 00:25:47.119 in Muncie, Indiana, felt increasingly anachronistic. 00:25:47.259 --> 00:25:49.359 Which prompted another headquarters relocation. 00:25:49.440 --> 00:25:52.039 In 1998, the corporate headquarters moved from 00:25:52.039 --> 00:25:54.619 Muncie to Broomfield, Colorado. A move that really 00:25:54.619 --> 00:25:57.119 solidified its focus on overseeing massive global 00:25:57.119 --> 00:25:59.779 operations as a manufacturer of metal containers 00:25:59.779 --> 00:26:02.480 and a supplier to the aerospace industry. It 00:26:02.480 --> 00:26:04.539 permanently distanced itself from its agricultural 00:26:04.539 --> 00:26:06.940 manufacturing roots. From this point forward. 00:26:07.450 --> 00:26:10.329 The growth story is one of just relentless consolidation 00:26:10.329 --> 00:26:13.470 through acquisition, all aimed at cornering the 00:26:13.470 --> 00:26:16.130 global aluminum packaging market. Let's track 00:26:16.130 --> 00:26:18.150 some of these massive acquisitions. Yeah, let's 00:26:18.150 --> 00:26:21.410 do it. In 1997, they acquire MC Packaging LTD 00:26:21.410 --> 00:26:24.789 in China. This was a massive strategic move. 00:26:25.089 --> 00:26:28.210 It instantly positioned them as the largest supplier 00:26:28.210 --> 00:26:30.809 of cans in the rapidly expanding Chinese market. 00:26:31.029 --> 00:26:34.450 A critical foothold in Asia. Huge. Then came 00:26:34.450 --> 00:26:37.890 the move to dominate Europe. In 2002, they acquired 00:26:37.890 --> 00:26:41.750 Schmalbach Lubeca AG, a German -based metal can 00:26:41.750 --> 00:26:44.269 company. And this wasn't just integration. This 00:26:44.269 --> 00:26:47.009 was scale. It created Ball Packaging Europe and 00:26:47.009 --> 00:26:49.250 immediately boosted Ball's beverage can sales 00:26:49.250 --> 00:26:51.910 by over a billion dollars a year. A billion dollars. 00:26:52.009 --> 00:26:53.730 Yeah. Just from that one acquisition. Annually. 00:26:53.809 --> 00:26:55.750 And they weren't just buying beverage can companies 00:26:55.750 --> 00:26:58.009 either. They started diversifying the types of 00:26:58.009 --> 00:27:01.049 aluminum packaging they made. So in 2006, they 00:27:01.049 --> 00:27:03.569 entered the steel aerosol business with the acquisition 00:27:03.569 --> 00:27:06.819 of U .S. Can. And by... 2010, they were focusing 00:27:06.819 --> 00:27:09.200 on the component supply chain itself. Right, 00:27:09.279 --> 00:27:11.500 which brings us to a crucial technical term that 00:27:11.500 --> 00:27:13.099 we should probably clarify for everyone listening. 00:27:13.519 --> 00:27:16.759 In 2010, through acquisitions like Newman Aluminum 00:27:16.759 --> 00:27:19.779 and Erickson SAS, they became the largest supplier 00:27:19.779 --> 00:27:22.660 of aluminum slugs globally. Okay, what exactly 00:27:22.660 --> 00:27:25.759 is an aluminum slug? Think of it this way. The 00:27:25.759 --> 00:27:28.160 standard beverage can is made from a rolled -up 00:27:28.160 --> 00:27:30.839 sheet of aluminum metal. An aluminum slug is 00:27:30.839 --> 00:27:34.180 a small, solid, preformed, dense piece of aluminum, 00:27:34.319 --> 00:27:37.170 usually a cylinder. And these slugs are used 00:27:37.170 --> 00:27:39.990 to create extruder products like aluminum aerosol 00:27:39.990 --> 00:27:42.970 cans, specialty bottles, or high -pressure cylinders. 00:27:43.269 --> 00:27:45.829 It's a very niche, high -precision segment of 00:27:45.829 --> 00:27:48.509 the packaging market. And Ball decided they wanted 00:27:48.509 --> 00:27:51.150 to dominate the raw material supply for it. And 00:27:51.150 --> 00:27:53.630 their ultimate consolidation move came in 2016 00:27:53.630 --> 00:27:56.309 when Ball acquired the British firm Rick Sam 00:27:56.309 --> 00:28:00.140 Pellickey for $6 .1 billion. That acquisition 00:28:00.140 --> 00:28:02.960 was the definitive market event. It solidified 00:28:02.960 --> 00:28:05.059 their status without a shadow of a doubt as the 00:28:05.059 --> 00:28:06.819 world's largest producer of aluminum beverage 00:28:06.819 --> 00:28:09.380 cans. They had successfully cornered the global 00:28:09.380 --> 00:28:11.819 market. They achieved the scale and efficiency 00:28:11.819 --> 00:28:14.720 necessary to compete in that high volume, low 00:28:14.720 --> 00:28:17.119 margin environment. And in more recent years, 00:28:17.160 --> 00:28:19.740 we've seen them leveraging that expertise and 00:28:19.740 --> 00:28:22.920 their focus on sustainability. That brings us 00:28:22.920 --> 00:28:25.700 to the lightweight ball aluminum cup. which they 00:28:25.700 --> 00:28:28.440 introduced in 2019. Yeah, and that's an explicit 00:28:28.440 --> 00:28:31.980 branding push toward recyclability as an alternative 00:28:31.980 --> 00:28:34.500 to single -use plastics in high -volume venues 00:28:34.500 --> 00:28:37.279 like stadiums and concert halls. And they linked 00:28:37.279 --> 00:28:39.619 this innovation directly to their public image. 00:28:39.940 --> 00:28:43.099 In 2020, Ball acquired the naming rights to the 00:28:43.099 --> 00:28:46.059 Pepsi Center in Denver, renaming it Ball Arena. 00:28:46.299 --> 00:28:48.299 Which placed their brand right in the center 00:28:48.299 --> 00:28:50.599 of major sports and entertainment. It was a signal 00:28:50.599 --> 00:28:54.000 of a forward -facing, modern, and very high -visibility 00:28:54.000 --> 00:28:56.259 corporate... So at this point, they're dominating 00:28:56.259 --> 00:28:58.960 aluminum packaging globally, while their aerospace 00:28:58.960 --> 00:29:01.259 division just continues to run successfully in 00:29:01.259 --> 00:29:04.240 the background. But success in two completely 00:29:04.240 --> 00:29:06.900 unrelated fields can lead to corporate complexity 00:29:06.900 --> 00:29:10.400 and, I guess, divided capital. Which brings us 00:29:10.400 --> 00:29:12.779 to the biggest news story of their last few years, 00:29:13.000 --> 00:29:17.319 the massive strategic shift in 2024. Despite 00:29:17.319 --> 00:29:20.000 its prestige, its revenue, its high margin government 00:29:20.000 --> 00:29:23.539 contracts. Ball divested Ball Aerospace entirely. 00:29:23.980 --> 00:29:27.119 They sold it to BAE Systems Inc. for a staggering 00:29:27.119 --> 00:29:31.420 $5 .6 billion in cash. OK, but why? Why sell 00:29:31.420 --> 00:29:34.180 off a division that is stable, high margin and 00:29:34.180 --> 00:29:37.460 highly specialized? Why choose to be only a can 00:29:37.460 --> 00:29:39.579 company, which is far more competitive, requires 00:29:39.579 --> 00:29:41.700 massive infrastructure investment and has lower 00:29:41.700 --> 00:29:44.279 margins? That's the core analytical challenge 00:29:44.279 --> 00:29:46.640 of this whole deep dive, isn't it? The rationale, 00:29:46.900 --> 00:29:48.960 at least as stated by the CEO, Dan Fisher, was 00:29:48.960 --> 00:29:51.480 purely strategic. He said the move allows Ball 00:29:51.480 --> 00:29:54.819 to increase its focus on low carbon, best value 00:29:54.819 --> 00:29:57.000 aluminum packaging initiatives. So they use that 00:29:57.000 --> 00:29:59.339 massive capital infusion to simplify the business 00:29:59.339 --> 00:30:01.400 and refocus entirely on their core strength, 00:30:01.559 --> 00:30:03.740 which they see as the future of sustainable packaging. 00:30:03.759 --> 00:30:06.109 It's a calculated risk. Aerospace is stable, 00:30:06.190 --> 00:30:08.369 but it requires constant high level R &D and 00:30:08.369 --> 00:30:10.069 a lot of political maneuvering. Packaging is 00:30:10.069 --> 00:30:12.190 competitive, but it aligns perfectly with this 00:30:12.190 --> 00:30:14.309 massive global demand for sustainable circular 00:30:14.309 --> 00:30:17.930 economy products. And that $5 .6 billion allows 00:30:17.930 --> 00:30:20.490 them to pour capital into optimizing their can 00:30:20.490 --> 00:30:23.269 production network and expanding globally without 00:30:23.269 --> 00:30:25.750 all the complexity of managing defense contracts. 00:30:26.069 --> 00:30:28.269 And that focus shift is continuing into 2025. 00:30:29.049 --> 00:30:31.549 They even sold a majority stake in their Ball 00:30:31.549 --> 00:30:34.329 Aluminum Cup business, forming a joint venture 00:30:34.329 --> 00:30:37.329 named Oasis Venture Holdings, specifically to 00:30:37.329 --> 00:30:39.369 accelerate the growth of that category under 00:30:39.369 --> 00:30:41.849 new ownership. While at the same time acquiring 00:30:41.849 --> 00:30:44.849 Alucan and Florida Can Manufacturing to further 00:30:44.849 --> 00:30:47.210 optimize their core aluminum packaging network, 00:30:47.849 --> 00:30:50.210 Every single move now is calculated to simplify 00:30:50.210 --> 00:30:53.029 and dominate aluminum. The story of Ball Corporation 00:30:53.029 --> 00:30:55.230 is just a history of these successive brutal 00:30:55.230 --> 00:30:58.329 exits. They exit wood and tin for glass because 00:30:58.329 --> 00:31:01.210 of corrosion. They exit glass for aerospace and 00:31:01.210 --> 00:31:03.009 aluminum because of antitrust limitations and 00:31:03.009 --> 00:31:05.490 drop in demand. And finally, they exit aerospace 00:31:05.490 --> 00:31:08.529 to focus 100 % on dominating aluminum packaging 00:31:08.529 --> 00:31:11.009 and leveraging the global environmental imperative. 00:31:11.450 --> 00:31:13.430 It's just an incredible story of constant change. 00:31:13.730 --> 00:31:16.410 Hashtag tag tag tag outro. As we conclude this 00:31:16.410 --> 00:31:18.390 deep dive. It feels like we're returning to the 00:31:18.390 --> 00:31:21.609 theme that justified that final massive divestment, 00:31:21.609 --> 00:31:24.609 sustainability. Right. The current Ball Corporation 00:31:24.609 --> 00:31:27.470 is intensely focused on the environmental legacy 00:31:27.470 --> 00:31:30.450 that aluminum packaging offers, mainly because 00:31:30.450 --> 00:31:33.180 of its infinite recyclability. And this focus 00:31:33.180 --> 00:31:35.279 wasn't just, you know, recent window dressing. 00:31:35.420 --> 00:31:38.039 Their formal commitment to sustainability actually 00:31:38.039 --> 00:31:41.319 began way back in 2006. And they issued their 00:31:41.319 --> 00:31:43.420 first report in 2008. They were pretty early 00:31:43.420 --> 00:31:45.519 to that game. They were recognized for it quickly, 00:31:45.619 --> 00:31:47.299 too, which shows they were serious about the 00:31:47.299 --> 00:31:49.779 transformation. And that transformation has been 00:31:49.779 --> 00:31:52.059 validated repeatedly by external benchmarks. 00:31:52.579 --> 00:31:54.759 They've successfully transitioned their public 00:31:54.759 --> 00:31:57.420 identity from a historical glass manufacturer 00:31:57.420 --> 00:32:01.130 to a global leader in green manufacturing. What 00:32:01.130 --> 00:32:02.869 kind of recognition are we talking about? Well, 00:32:02.890 --> 00:32:05.410 recent stuff includes being named to Times World's 00:32:05.410 --> 00:32:08.549 Most Sustainable Companies list in 2024, and 00:32:08.549 --> 00:32:11.309 they've had consistent inclusion in S &P Global's 00:32:11.309 --> 00:32:14.769 Sustainability Yearbook in both 2023 and 2024. 00:32:15.390 --> 00:32:17.970 They have successfully linked their core product, 00:32:18.130 --> 00:32:20.950 the aluminum can, directly to the circular economy. 00:32:21.230 --> 00:32:23.680 So let's look at the final tally on this. The 00:32:23.680 --> 00:32:25.960 ball journey starts with five brothers barring 00:32:25.960 --> 00:32:28.700 $200 in Buffalo to solve a kerosene corrosion 00:32:28.700 --> 00:32:31.740 problem. An amazing start. And that initial spark 00:32:31.740 --> 00:32:34.880 evolved through industrial fire and the constant 00:32:34.880 --> 00:32:37.900 pursuit of cheap energy into the iconic glass 00:32:37.900 --> 00:32:41.500 jar brand, then the sophisticated satellite powerhouse 00:32:41.500 --> 00:32:45.559 of the 1960s. And now a public global aluminum 00:32:45.559 --> 00:32:49.940 powerhouse with $11 .8 billion in 2024 revenue. 00:32:50.240 --> 00:32:52.740 It is a stunning example of corporate agility. 00:32:53.259 --> 00:32:55.619 I think they realized that efficiency, capital 00:32:55.619 --> 00:32:58.019 allocation and market dominance required them 00:32:58.019 --> 00:33:00.619 to maintain a willingness to just discard successful 00:33:00.619 --> 00:33:03.700 but restrictive past identities. First glass, 00:33:03.920 --> 00:33:07.059 then aerospace, all to secure a more unified 00:33:07.059 --> 00:33:09.460 and profitable future in packaging. And every 00:33:09.460 --> 00:33:11.839 single one of those pivots from the 1880s all 00:33:11.839 --> 00:33:13.960 the way to today, it came down to a calculation 00:33:13.960 --> 00:33:17.420 involving resources and energy. The initial pivot 00:33:17.420 --> 00:33:19.420 to Muncie hinged entirely on the realization 00:33:19.420 --> 00:33:21.779 that natural gas was cheaper than coal for making 00:33:21.779 --> 00:33:24.049 glass. would allow them to scale. And that is 00:33:24.049 --> 00:33:26.029 a perfect point to end on because it ties that 00:33:26.029 --> 00:33:28.710 19th century energy boom directly to the 21st 00:33:28.710 --> 00:33:31.089 century challenge. The success of the Ball brothers 00:33:31.089 --> 00:33:33.230 hinged on that short -lived localized natural 00:33:33.230 --> 00:33:35.589 gas boom in Indiana. So where's the connection 00:33:35.589 --> 00:33:38.410 to today? Today, the aluminum packaging industry 00:33:38.410 --> 00:33:41.410 is critically dependent on massive, consistent, 00:33:41.609 --> 00:33:44.210 and cheap energy, particularly hydroelectric 00:33:44.210 --> 00:33:46.849 power, which is essential for the aluminum smelting 00:33:46.849 --> 00:33:49.130 process. So let's leave our listeners with this 00:33:49.130 --> 00:33:51.680 final provocative thought. How dependent are 00:33:51.680 --> 00:33:54.259 modern megacorporations, even the ones focused 00:33:54.259 --> 00:33:57.259 on recyclable materials like aluminum, on specific, 00:33:57.440 --> 00:34:00.640 often localized energy resources? Right. If a 00:34:00.640 --> 00:34:03.700 massive unforeseen energy or geopolitical pivot 00:34:03.700 --> 00:34:06.720 were to happen, say a sudden shift in global 00:34:06.720 --> 00:34:09.719 hydropower availability or massive carbon taxation 00:34:09.719 --> 00:34:12.659 that disrupts energy grids, what corporate identity 00:34:12.659 --> 00:34:15.000 might Ball Corporation be forced to discard next? 00:34:15.300 --> 00:34:17.340 What would they have to invent in favor of a 00:34:17.340 --> 00:34:19.880 fourth, completely unforeseen industrial strategy? 00:34:19.920 --> 00:34:22.719 The jars and the jets are gone, but the lesson 00:34:22.719 --> 00:34:25.380 of constant reinvention remains. Thank you for 00:34:25.380 --> 00:34:27.239 joining us for this deep dive into the continuous 00:34:27.239 --> 00:34:29.280 evolution of the Ball Corporation. We'll catch 00:34:29.280 --> 00:34:29.760 you next time.