If it were
a movie it would have been obvious to anyone that Carnegie and Frick would
always have a rocky relationship. Frick
felt he had accomplished all he could in coke.
The future, he knew, lay in steel.
In 1885 Frick had a plan. He sold
the majority of his shares in the H. C. Frick Coke Co. with the intention of
buying his way into Carnegie Steel. When
Andrew Carnegie heard of this plan he wrote to Frick counseling him to remain
in Coke. As he argued even if Frick were
to become the Chairmen of Carnegie Steel, Frick would never be as satisfied as if
he stayed with the company that he had build from the ground up and bore is
name. Frick politely thanked Carnegie
for his advice and quietly bided his time.
Frick knew what he wanted and he would get it too, if not today then
tomorrow.
Frick may
not have had as long a wait as he expected.
In 1886 while Andrew Carnegie lay in bed sick with typhoid his brother
Tom Carnegie, developed pneumonia and just 5 days later died. Henry Phipps was moved to Chairman but
everyone understood that it was only a temporary assignment. Frick’s time was about to arrive. By November 1 of that year Carnegie offered
Frick a partnership. He took Tom’s
position as Principal Firm Manager while also remaining Chairmen of his Coke Company. Once again conflict of interest was not a
concept these men were familiar with. It
was not too long before there was a small inkling of what was to come. In 1887
a Labor Strike at one of Frick’s Coke plant threatened
the coke supply to Carnegie’s mills.
Carnegie, as majority share holder at in H.C. Coke Co. demanded that Frick
settle with the workers and reestablish the supply of coke to his steal
mills. At the same time the other coke
manufacturers were demanding that he hold firm less they have to match what
ever terms he agreed to or face similar issues.
Unable to handle the situation as he wanted to Frick set out upon a
novel solution. He quit. Carnegie was in Scotland, where he seemed to
always be in times of difficulty, so Frick wrote to Phipps telling him that he
could no longer handle the Company as he wished when the majority Stock holder,
i.e. Carnegie, was making demands and not letting Frick run his company has he
saw fit so they could have the company and he was going on vacation. And he did.
He took Adelaide and his two
children and sailed for Europe for several months while
Phipps struggled to settle the labor strike and run a company he knew nothing
about. After a few months of basically
ignoring a rain storm of telegrams and letters begging him to return to Pittsburgh
from a number of company officers and share holders Frick finally accepted an
invitation to come to Scotland
and spend a few days with Carnegie. The
two men came to an understanding and shortly thereafter Frick returned to Pittsburgh
and resumed control of H.C. Frick Coke Company probably to Phipps great relief. The following year Henry Phipps had and
enough. He was ready to enjoy
retirement. Carnegie made David Stewart
the Chairmen but almost immediately Stewart died. Now there really was no other candidate,
Carnegie turned to Frick.
Carnegie
felt that now he really did have a managerial genius at the head of Carnegie
Steel and in Frick he did. Carnegie and
Frick worked well together. Both were
obsessed with controlling costs while willing to use a certain amount of
duplicity to make things work out the way they wanted. When they learned a rival company was using a new way of making
railroad rails that would be able to severely cut costs and thereby reducing
prices which would allow the owners of the process to undercut Carnegie Steel,
Carnegie wrote to the rail road companies warning that the new process was dangerous
and could lead to failure of the rail line.
Almost immediately orders dried up and the company’s investors become desperate
to sell. Enter Frick with a very
generous offer to take their plant and new process off their hands for
basically cost. Almost immediately the
new process was put into place at all the Carnage steel mills. Questions about the safety of the new
processes seemed to evaporate into thin air.
Things were going well and then the Labor contract a Homestead
expired….
