Bankruptcy and beyond
Fredrik had perfected the Bessemer process and built both a new factory in Sandviken and a functioning municipality which included a school for worker’s children. But huge loans and too little income in the end proved too much for the new company and both Högbo Iron and Steel and Fredrik personally - went bankrupt.
Production stopped in 1866 and the Göransson family lost the company and the factory. But Fredrik’s sons Ernst and Henrik for a time rented the blast furnace in Edsken and carried on producing steel. To support himself and his family, Fredrik worked as a selling agent and helped several companies with his skills as an entrepreneur.
The bankruptcy was big news and most of the newspaper items were regretful and sympathetic, some calling it a national disaster. There was even talk of English intrigue and Gothenburg jealousy, as the main competition came from both those places.
Högbo Iron and Steel was to be sold at auction and the future looked incredibly dark. The buyer was Gävle Dala Mortgage Society, one of the major creditors in the Högbo company bankruptcy. They were at the auction to push the selling price as high as possible by bidding against the Högbo competitors, but “accidentally” ended up buying the company, which subsequently reverted to the Göransson family.
Fredrik himself was unable to sit on the board of the new company because of his personal bankruptcy. Instead Göransson’s oldest son, Anders Henrik, who was only 23 at the time of the bankruptcy, had to take on that huge responsibility and in November 1867 the newly named company Sandviken’s Ironworks could start business.
By 1871 Sandviken’s Ironworks was the largest producer of pig-iron in Sweden. But in line with their strategy, it was mostly used to make their own products and only about 10% was sold as raw material. A strategy which continues to this day.
1872 was an important year and Sandviken’s Ironworks was represented at a very large exhibition in Moscow. They won a gold medal and were the only company to dine with the Tsar. After that followed several other major exhibitions, in Liège, Philadelphia and Paris.
In 1883, the 25th anniversary of the Bessemer process was celebrated with a big party in the school building to which all the employees were invited. It was a double celebration, because Fredrik was at last free of his bankruptcy and could once again be on the board of directors for the company.
In 1898 Fredrik became a member of the Royal Academy of Sciences and in the spring of 1900 was also to become an honorary doctor at Uppsala University, but he was not able to collect that award as he died on the 12th May, aged 81.
In 2014 Göran Fredrik Göransson was hailed as the third greatest entrepreneur in Sweden’s history. IKEA’s founder Ingvar Kamprad was in first place.