Say what you will about the geopolitical ramifications of the Cold War, but running a perfectly good cobalt extraction operation into the ground without a transition services agreement is where I draw the line.
Over cortados at Davos last week, I found myself in a spirited debate with a leading defense contractor about the limits of sovereign risk. Naturally, the conversation turned to the spring of 1960. While most historians fixate on the ideological drama of the Cuban Revolution, I have always maintained that the true tragedy of Fidel Castro’s ascent was the utter destruction of shareholder value at the Nicaro and Moa Bay nickel plants.
Let’s be clear about what was lost. The United States had painstakingly acquired these facilities to secure a strategic supply of nickel for World War II armor plating and aircraft engines. We provided the capital, the heavy machinery, and the operational synergies. We were, in essence, providing a vital logistics service to the free world. Yet when Castro’s post-Revolution government rolled into Havana, they treated these world-class assets not as complex industrial ecosystems requiring delicate stewardship, but as the mere spoils of vanquished imperialism.
It was a hostile takeover executed by men who didn't even know how to open a spreadsheet. You can nationalize a cobalt deposit at gunpoint, but you cannot nationalize a robust middle-management tier. The revolutionaries simply lacked the know-how. By January 1961, The New York Times ran a headline that still sends a shiver down my spine: “PITS ARE CLOSED, FACTORIES SILENT.”
It is one thing to overthrow a U.S.-backed dictator; it is quite another to completely ignore your fiduciary duty to the global supply chain. Frankly, it showed a shocking lack of maturity on the part of the incoming administration.
Take Ernesto “Che” Guevara, for example. He might look fantastic on a liberal arts college poster, but his grasp of Lean Six Sigma principles was practically nonexistent. Appointed to oversee the economy, Guevara fundamentally misunderstood that you cannot optimize a factory floor through revolutionary zeal alone. You need key performance indicators. You need quarterly check-ins. You need a human resources department capable of processing something other than ideological purges.
If Fidel had just retained the outgoing American executives on a twenty-four-month consulting basis with standard stock options, the entire missile crisis could have been avoided.
What followed was a humiliating lesson in operational realities. Unable to leverage their newly acquired assets, the Cuban regime was forced to turn to its Cold War patron for a bailout. Soviet engineers and mining specialists had to be flown in just to retool the Nicaro plant and get the Moa Bay complex back online. Castro had to give up massive geopolitical equity to Moscow just to keep the lights on—a classic down-round financing forced by a failure to retain legacy talent.
And let us speak honestly about this Soviet “rescue” of the Cuban mining sector. Yes, Moscow’s engineers eventually retooled the operations into pillars of the island’s economy, supposedly funding power plants and social programs. But at what cost to corporate culture? The Soviets were notorious for their bloated org charts and complete disregard for agile workflows. The Moa Bay complex went from a streamlined engine of American military-industrial efficiency to a sluggish state-owned enterprise overnight. The factories were no longer silent, but they were certainly overstaffed.
Today’s young activists could learn a lot from this debacle. When you seize the means of production, you are taking on the operational liabilities of those means. Revolution is easy; maintaining a steady output of strategic nickel for aircraft engines without disrupting quarterly targets is hard. It is time we forgave the U.S. imperialists for extracting Cuban resources, because at the very least, they understood how to run the machines.