For nearly eighty years, Koch Industries has stood as the preeminent American business success story. But what does the future of this colossal conglomerate look like – particularly as its leadership, the legendary Koch brothers, grow older?
In an interview with The Final Round on Tuesday, “Kochland” author Christopher Leonard untangled the complicated history of the Koch family, the business’ legacy, and how sweeping – and vital – Koch Industries’ domination of the energy space is today.
‘One of the most important companies’ in the U.S.
How, and in what ways, has Koch Industries remained influential in today’s world?
“That’s the question that started the book,” explains Leonard. “You hear about this kind of cartoon character of the Koch brothers as political figures, but in fact, this really is one of the most important companies in the United States. Koch Industries’ annual sales are larger than that of Facebook, Goldman Sachs, and U.S. Steel combined. And it’s not just the size of the company, I think, that makes it important; it’s the scope of what it does.”
With a valuation of roughly $140 billion dollars, the sprawling conglomerate controls subsidiaries in the manufacturing, refining, and distribution of various energy resources, such as petroleum and chemicals. Its prodigious reach has ensured that, for nearly four decades, Koch Industries has entered the lives of countless Americans.
“This company specializes in the kind of stuff that underpins civilization,” Leonard explained. “Fuel, fertilizer, building materials; it really touches everybody’s life.”
Information is the Koch family’s ‘most important resource’
Both Charles and David Koch – known colloquially as the Koch brothers – shared an entrepreneurial spirit, fostered by their father, Fred C. Koch, after whom the company is named. And while this doubtlessly shaped the brothers’ business acumen, it is not their most important resource.
“When you talk about the business and how it became what it is today, this is a company that, back in even the seventies and eighties, realized the most important resource they dealt with wasn’t gas, or coal, or cattle – it was information,” explained Leonard. “This is a company that’s big into trading, and their strategy is to try to know more about the world than their competitors and to trade on that advantage.”
That hunger for information remains a central part of Koch Industries’ business strategy, and often permeates the brothers’ political motivations.
“Politically, along with that long-term strategic view, [the Koch brothers] have very firm ideas about limited government, free-market economics, and you’ve seen that in their leadership since the seventies, as well.”
Olivia Balsamo is a writer and producer at Yahoo Finance. Follow her on Twitter: @BalsamoOlivia.