Home' Technology Review : October 2005 Contents 38
Briefcase One Decision
of the sexiest technology of
the past 100 years. The in-
candescent light bulb. The
picture tube for color TVs.
Windows for every NASA spacecraft. The
glass screens for laptop computers and
at-panel TVs. And, yes, optical ber.
They invented it.
Then there's the tailpipe business.
In the world of glamorous technology,
it never hurts to have a dependable trade
in something like cleaning up the exhaust
of cars, trucks, and buses. More than 30
years ago, Corning developed the honey-
combed materials that have become the
guts of catalytic converters, dramatically
reducing pollution. "Environmental tech-
nology," as Corning calls it, has been a
steady business for the company ever since.
Then, four years ago, even as Cor ning's
ber-optics business was unraveling, the
company's leadership decided to place a
daring bet on cleaning up diesel exhaust.
That bet---which is just now beginning to
play out---commits Corning to spending
upward of a half-billion dollars and har-
nessing the talent of hundreds of research-
ers to develop, manufacture, and sell a line
of devices to dramatically reduce pollution
from diesel-powered vehicles. Diesel en-
gines produce slightly di erent pollutants---
including soot---than gas-powered engines,
and typical car technology is ine ective
"This is not a wild leap o a cli ," says
Joe Miller, Corning's chief technology of-
cer. At the same time, Miller says, it was
"a very, very gutsy decision."
The collapse of the tech bubble was as
vivid, and as traumatic, at Corning as any-
where. Indeed, it must have appeared to
blow a hole in Corning's nancial perfor-
mance. The company's totalquarterly reve-
nue peaked in the fourth quarter of 2000,
at $2.1 billion. Just eight quarters later, in
the fourth quarter of 2002, Corning's quar-
terly revenue was down to $736 million.
In the midst of layo s and factory clos-
ings---only one of the ve ber-optics facto-
ries that Corning operated in 2000 remains
open---the company shut down research
labs in New Jersey, England, Japan, and
Russia. R&D spending was cut by $5 mil-
lion per week---nearly 50 percent from 2001
to 2003---a ecting even Cor ning's storied
Sullivan Park research complex. Mean-
while, diesel technology's share of the
budget grew "fourfold," says Miller.
In fact, Corning didn't place just one
bet on diesel antipollution devices---the
market for which should grow quickly as
sti antipollution laws come into force
around the world. Tom Hinman, head of
diesel technologies at Corning; CTO
Miller; and the Cor ning board made a
pair of bets. The rst was to build a factory
to supply a market that didn't exist. The
cost: $370 million. Total sales of Corn-
ing's diesel mitigation business the year
the factory was approved: $12 million.
The second bet was even more daring.
Cor ning abandoned the industry-standard
ltration technology for diesel cars. As
competitors scooped up business, and as
construction proceeded on the new fac-
tory, Cor ning ordered up not just a new
product from its research labs but a whole
new materials-science breakthrough on
which to base that product.
"We made a lonely choice," says Hin-
man. The existing ceramic material for
diesel lters worked ne but was di cult
and expensive to manufacture. Hinman's
team thought it could come up with a new
material that was as e ective against pol-
lution, more durable, and half as expen-
sive for carmakers.
The company bet not just on the mar-
ket---which it expects to be $1 billion a year
in 2008, and to grow from there---but on
its own heritage of inventiveness. In 2004,
90 percent of Corning's sales came from
products less than four years old. Corning
scientists have often come up with tech-
nology solutions under time and market
pressure; in fact, they developed the ma-
terial for catalytic converters under goad-
ing from automakers faced with the Clean
Air Act of 1970. The diesel R&D group
ended up taking two years to zero in on the
right material for diesel-engine lters---
aluminum titanate---but it checked in with
senior management every six weeks, and
more often when necessary. "It was tough
sledding," says Hinman. "You see the
competition moving on....It required tre-
mendous con dence."
Corning is already making heavy-duty
diesel-engine lters at its new Erwin, NY,
plant. Production of car lters---using the
new aluminum titanate ceramic---should
start before year's end.
Miller came to Corning in July 2001 as
CTO, and he says that cutting R&D spend-
ing was very painful---but also instructive.
"There is nothing," says Miller, "like that
kind of experience to temper what you're
hearing, to be sure you don't just look at
these things with rose-colored glasses."
Even in a science-driven company, he says,
"there is no algorithm to guide you on
THE DECISION: In the midst of the tech crash,
Corning put big money into the development of a sleepy
technology: pollution filtration for diesel engines.
FY 2004 revenues: $3.85 billion
Total sales of diesel-exhaust mitigation
products in 2004: $69 million
AP WIDE WORLD
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