Morrison-Knudsen was a legendary builder — then its CEO lost $310M in a single year

Morrison-Knudsen was one of America's oldest and most respected engineering and construction companies, having built major projects including the Hoover Dam, the San Francisco Bay Bridge, and the Trans-Alaska Pipeline System. In 1988, William Agee became CEO and immediately shifted the company's strategy away from its core construction business into risky new areas.

Agee's most disastrous bet was the MK Transit division, which manufactured railcars. The division lost massive amounts of money, accounting for more than 60% of the company's losses. In 1994, Morrison-Knudsen announced a loss of $310 million for the fiscal year. The board ousted Agee in February 1995 after a leak of his intended resignation.

The company declared bankruptcy in 1995 and was sold to Washington Group in 1996 for $380 million. Thousands of jobs were lost. The case became a textbook example of a CEO destroying a century-old company by abandoning its core competency for a speculative expansion into an industry he did not understand.