September 27 in business history: one design repeated 2,710 times, a $2.7 billion write-off, and two million accounts
Three September 27s ask the same question — what in a business can actually be repeated and what only looks repeatable — through a wartime ship design that produced 2,710 ships, Sony's 1989 purchase of Columbia Pictures, and the sales target behind Wells Fargo's fake-account scandal.
Three September 27s, and one question asked three different ways: what part of this business can actually be repeated, and what part only looks repeatable?
In 1941 the answer was a ship design, and repeating it produced 2,710 ships. In 1989 the answer was a film library, and paying $4.8 billion for it produced a $2.7 billion write-off five years later. In 2016 the answer was a sales target, and repeating that produced more than two million accounts that the bank's own review said may never have been authorized.
The design that could be repeated
On Saturday, September 27, 1941, fourteen merchant ships went into the water at yards across the United States, along with two Navy destroyers at the Boston Navy Yard 1. At Bethlehem-Fairfield in Baltimore, President Franklin Roosevelt watched the SS Patrick Henry, the first Liberty ship, slide down the ways and gave a short speech; at the other thirteen launchings that morning, the White House played a recording of the same speech 12.
What Roosevelt asked for was a rate, not a ship: "We must build more cargo ships and still more cargo ships — and we must speed the program until we achieve a launching each day, then two ships a day" 1.
The thing that made that rate arguable had been decided before the speech. The Liberty ship was one design, designated EC2-S-C1, built from prefabricated sections and welded rather than riveted, in assembly-line fashion 34. A Liberty ship was 441 feet 6 inches long, displaced 14,245 long tons, made 11 to 11.5 knots, and cost about $2 million 4.
The design did what the speech asked. Eighteen American shipyards built 2,710 Liberty ships between 1941 and 1945 — an average of three ships every two days — the largest number of ships ever produced to a single design 4. The Smithsonian puts the same fleet at 2,710 3. The first ships took about 230 days to build, and the Patrick Henry took 244; the average came down to 42 days, and in 1943 the yards launched three a day 34. The record was the SS Robert E. Peary, launched four days and 15½ hours after its keel was laid — a publicity stunt the program did not repeat, and one that left a great deal of fitting-out still to do 4.
The crews were the part that did not scale. One merchant mariner in 26 died during the war, a higher fatality rate than that of any branch of the armed forces 3.
Decision mirror: The capacity that speech asked for no longer exists at this scale. In 2024 China took over 53 percent of global market share in commercial shipbuilding and the United States accounted for 0.1 percent. One Chinese firm, the state-owned China State Shipbuilding Corporation, built more commercial vessels by tonnage in that single year than the entire United States shipbuilding industry has built since the end of the Second World War 5. The United States Trade Representative's Section 301 remedies, including fees on Chinese-built ships and on the operators of Chinese vessels, took effect on October 14, 2025 5. The number worth holding onto here is not 2,710. It is 0.1 percent. A country can stop repeating a design it once repeated three times every two days.
The thing that could not be repeated
Columbia Pictures Entertainment's board met in New York at 8:30 a.m. on Wednesday, September 27, 1989, voted on Sony's proposal, and signed papers with Sony an hour later 6. Sony agreed to pay $27 a share in cash — $3.4 billion for the equity and $1.4 billion for the company's outstanding debt, $4.8 billion in total — the largest United States acquisition by a Japanese firm to that date, and the first purchase of a major Hollywood studio by one 67.
What Sony was buying was Columbia and Tri-Star, an 820-screen Loews theater chain, a library of 2,700 films and 23,000 television programs, and 2,500 employees 67. Coca-Cola, which held 49 percent of the company, had given Sony an option over its shares; the investment bank Allen & Co., which held 3 percent, had done the same 6.
The price was several dollars a share above what analysts had expected, and the reason was the one item on that list nobody could build. A company like Sony, the wire report noted, was willing to pay a premium for a film library that "can only be acquired — never created" 7. Sony's own explanation came from Michael Schulhof, vice chairman of Sony Corporation of America: the purchase extended Sony's long-term strategy of building a total entertainment business around the synergy of audio and video hardware and software 67.
The synergy did not appear in the accounts. In November 1994 Sony took a $2.7 billion write-off on Sony Pictures Entertainment, on top of a $510 million operating loss at the studio, and blamed slower than expected growth and higher than expected costs of running it. "If we didn't do it once and for all now," executive deputy president Tsunao Hashimoto said in Tokyo, "we would continue to face losses on our entertainment business" 8.
Decision mirror: The same arithmetic ran again 30 years later. In the second quarter of 2024 Warner Bros. Discovery booked a $9.1 billion non-cash goodwill impairment charge against its Networks segment — triggered by the gap between the company's market capitalization and its book value — inside a quarterly net loss of $10.0 billion 9. Sony's purchase did eventually earn its keep, on a schedule nobody priced in 1989: for the year ended March 31, 2026, the Pictures segment reported sales of ¥1,505.9 billion and operating income of ¥117.3 billion, up from ¥104.9 billion the year before 10. The value arrived. It arrived some three decades after the price.
The target that was repeated instead
On Tuesday, September 27, 2016, the independent directors of Wells Fargo announced what the bank's sales scandal would cost its two most senior retail executives. Chief executive John Stumpf would forfeit his outstanding unvested equity awards, valued at about $41 million, and would forgo his salary while the investigation ran. Carrie Tolstedt, who had run the Community Bank, had left the company and would forfeit outstanding awards worth about $19 million, with no severance and no retirement enhancements. Neither executive would receive a bonus for 2016. A special committee of independent directors was to lead the investigation 11.
The conduct being paid for had a design of its own, and the design was a target. The Consumer Financial Protection Bureau's consent order found that Wells Fargo set sales goals and implemented sales incentives, including an incentive-compensation program, in part to increase the number of banking products and services its employees sold to existing customers; that thousands of employees engaged in improper sales practices to satisfy those goals and earn rewards under the program; and that during the relevant period the bank terminated roughly 5,300 employees for those practices 12.
What that produced, by the bank's own analysis, was more than two million deposit and credit card accounts that may not have been authorized by customers — roughly 1.5 million deposit accounts and about 565,000 credit card accounts — with funds sometimes moved out of customers' real accounts to fund the new ones, PINs and phony email addresses created to push customers onto online banking, and fees charged on accounts nobody had asked for. Wells Fargo paid $100 million to the CFPB, $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles 1213.
The number then grew. An expanded third-party review reported in August 2017 raised the count of potentially unauthorized accounts to about 3.5 million. In February 2020 the bank agreed to pay $3 billion to resolve criminal and civil investigations into sales practices the Department of Justice dated from 2002 to 2016 — a practice, the department said, of "pressuring employees to meet unrealistic sales goals" — including a $500 million civil penalty to be distributed by the Securities and Exchange Commission to investors 14. In January 2020 the OCC announced a prohibition order and a $17.5 million civil money penalty against Stumpf, and sought a prohibition order and a $25 million penalty against Tolstedt 15. The Federal Reserve's 2018 enforcement action required the bank to fix its governance and risk management; the asset-growth restriction stayed in place until June 3, 2025, and the order itself was not terminated until March 5, 2026, after what the Fed described as remediation work spanning nearly a decade 1617.
Decision mirror: The target outlived the bank that wrote it. In July 2023 the CFPB ordered Bank of America to pay $90 million in penalties to the Bureau and $60 million to the OCC, plus more than $100 million to customers, for misconduct that included employees applying for and enrolling consumers in credit card accounts without their knowledge — done, the Bureau found, "in order to reach now disbanded sales-based incentive goals and evaluation criteria." Bank of America held $2.4 trillion in consolidated assets and served 68 million people at the time 18. A sales goal is cheap to write down and expensive to withdraw.
Three questions for the week
- Which unit in your plan genuinely repeats? Fourteen ships launched on September 27, 1941, became 2,710 ships from a single design at eighteen yards, three every two days, because the design, the welding and the prefabrication were identical every time 134. The comparison number for the same industry today is 0.1 percent 5. Name the unit that repeats.
- What are you paying for that cannot be repeated? Sony paid $4.8 billion on September 27, 1989, for a library that can only be acquired and never created, and wrote off $2.7 billion of it five years later 678. The same segment reported ¥117.3 billion of operating income in the year to March 31, 2026 10. Price and value arrive on different schedules, and the schedule is not in the purchase agreement.
- What does your number do to the people measured by it? Wells Fargo's sales goals produced about two million unauthorized accounts, roughly 5,300 dismissals, $3 billion to the Department of Justice, and $42.5 million of penalties against its two most senior retail executives 121415. Bank of America ran the same play seven years later and paid $150 million in penalties plus more than $100 million to customers 18.
References
- 1Wikipedia, "Liberty Fleet Day"
en.wikipedia.org
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- 4Wikipedia, "Liberty ship"
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- 12Consumer Financial Protection Bureau, consent order 2016-CFPB-0015
files.consumerfinance.gov
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