The first Allis-Chalmers Company was formed in 1901 as an amalgamation of the Edward P. Allis Company (steam engines and mill equipment), Fraser & Chalmers (mining and ore milling equipment), the Gates Iron Works (rock and cement milling equipment), and the industrial business line of the Dickson Manufacturing Company (engines and compressors). It was reorganized in 1912 as the Allis-Chalmers Manufacturing Company. During the next 70 years its industrial machinery filled countless mills, mines, and factories around the world, and its brand gained fame among consumers mostly from its farm equipment business's orange tractors and silver combine harvesters.

In the 1980s and 1990s, a series of divestitures transformed the firm and eventually dissolved it. Its successors today are Allis-Chalmers Energy and AGCO.

History

Overview

Author-photographer Randy Leffingwell (1993) aptly summarized the firm's origins and character. He observed that it "grew by acquiring and consolidating the innovations" of various smaller firms and building upon them; and he continued that "Metal work and machinery were the common background. Financial successes and failures brought them together."

Former marketing executive Walter M. Buescher (1991) said that Allis-Chalmers "was a conglomerate before the word was coined." Whether or not it is literally true that Allis-Chalmers predated the sense of "conglomerate" meaning a widely diversified parent corporation, Buescher's point is valid: Allis-Chalmers, despite its common theme of machinery, was an amalgamation of disparate business lines, each with a unique marketplace, beginning in an era when consolidations within industries were fashionable but those across industries were not yet common.

1800s to 1901

Edward P. Allis was an entrepreneur who in 1860 bought a bankrupt firm at a sheriff's auction,^[1] the Reliance Works of Milwaukee, Wisconsin, which had been owned by James Decker and Charles Seville. Decker & Seville were millwrights who made equipment for flour milling. Under Allis's management, the firm was reinvigorated and "began producing steam engines and other mill equipment just at the time that many sawmills and flour mills were converting to steam power." Although the financial panic of 1873 "caught Edward Allis overextended" and forced him into bankruptcy, "his own reputation saved him and reorganization came quickly," forming the Edward P. Allis Company. Leffingwell said, "He set out to hire known experts: George Hinkley, who perfected the band saw; William Gray, who revolutionized the flour-milling process through roller milling; and Edwin Reynolds, who ran the Corliss Steam Engine works." Allis died in 1889, but under his sons (Charles Allis and William Allis) and the other principals, the firm continued to prosper, and by 1900 it had grown to become one of America's largest steam engine builders.

Thomas Chalmers was a Scottish immigrant to America who came to the U.S. about 1842. By 1844 he was at Chicago, Illinois and had found work with P.W. Gates, whose foundry and blacksmithing shops produced plows, wagons, and flour-milling equipment. The Gates firm "built the first steam-operated sawmill in the country at a time when Chicago was the leading producer of milled lumber in the country." In 1872, Thomas Chalmers founded the Fraser & Chalmers firm to manufacture mining machinery, boilers, and pumps. By 1880 steam engines were part of the product line and by 1890, the firm had become one of the world's largest manufacturers of mining equipment. Thomas Chalmers's son, William James Chalmers, was president of the company from circa 1890 to 1901. Meanwhile, the Gates Iron Works, with Chalmers family involvement, had become a manufacturer of crushers, pulverizers, and other rock and cement milling equipment.

Another Scottish immigrant family, the Dickson family, came to Canada and the U.S. in the 1830s. By 1852, they had organized a small machine shop and foundry (Dickson & Company) in Scranton, Pennsylvania. In 1856 Thomas Dickson became its president, and in 1862 the firm incorporated as the Dickson Manufacturing Company. By 1900 they were building boilers, steam engines, locomotives, internal combustion engines, blowers, and air compressors.

By 1901 the principals of the Edward P. Allis, Fraser & Chalmers, and Gates firms had decided to merge their companies. Edwin Reynolds believed Allis could control the industrial engine business. In May 1901 the Allis-Chalmers Company was formed. It acquired Dickson's industrial engine business. Dickson's locomotive business was rolled into the new locomotive consolidation, the American Locomotive Company (ALCO).

1901–1911

The managing director of the new company was Charles Allis, his brother William was chairman of the board, and William J. Chalmers was deputy managing director. Shortly after the merger was completed, a new factory was built in an area west of Milwaukee that was then known as North Greenfield. In 1902, with this new factory, the locale was renamed West Allis, Wisconsin.

With the combining of the constituent firms, Allis-Chalmers offered a wide array of pyrometallurgic equipment, such as blast furnaces and converters for roasting, smelting, and refining; ore milling equipment, various kinds of crushers and pulverizers, including stamp mills, roller mills, ball mills, conical mills, rod mills, and jigging mills; cyanidation mills and other concentration mills; hoisting engines; cars, including skip cars, slag cars, and general mine cars; briquetting plants; and the pumps, tanks, boilers, compressors, hydraulic accumulators, pipes, valves, sieves, and conveyors needed within these products. Like other firms that build capital equipment for industrial corporations, it also supplied consulting, erecting, and training services, such as helping a mining company to design a plant, to build its buildings and set up its machinery, and to teach the employees how to use and maintain it.

In 1903, Allis-Chalmers acquired the Bullock Electric Company of Cincinnati, Ohio, which added steam turbines to Allis-Chalmers's powerplant equipment business line.

1912-1919

By 1912, the Allis-Chalmers Company was in financial trouble, so it was reorganized. It was renamed the Allis-Chalmers Manufacturing Company, and Otto Falk, a former Brigadier General of the Wisconsin National Guard, was appointed to turn it around. Falk pushed for new products and new or expanded markets. Falk saw great growth potential in the mechanization of agriculture, which at the time was blossoming all over America. Allis-Chalmers's first farm tractors, the 10-18, the Model 6-12, and the Model 15-30, were developed and marketed between 1914 and 1919, and the farm implement line was expanded.

1920s

As had also been true of the 1900–1920 period, the Roaring Twenties were a favorable time for consolidation and even conglomeration throughout the business world. It was also a time of strongly continuing mechanization on North American farms. At Allis-Chalmers, the 1920s brought yet more tractors, such as the 18-30, the 12-20, the 15-25, and the United tractor/Model U.

Famed inventor and engineer Nikola Tesla spent the period 1919-1922 working in Milwaukee for Allis-Chalmers.

In 1926 Falk hired Harry Merritt, who would be a senior executive in Allis-Chalmers's tractor business for many years. Merritt had worked in the sales and marketing of various brands of farm and construction equipment, most recently Holt, when Falk hired him away. Buescher, who worked under Merritt, credited Merritt with turning around Allis-Chalmers's ailing farm equipment business and transforming it into the main profit center for the parent corporation. He said, "Some say that General Falk pulled Harry Merritt into Milwaukee to liquidate the ailing tractor division. Others say that he was brought in to breathe new life into the moribund and unprofitable operation. Even if the first appraisal is correct, the second proved to be the way it turned out. […] After Merritt's arrival, the profit picture changed. The farm equipment business proved to be a financial lifesaver for the corporation. […] From next to nothing in 1927, Merritt saw the percentage of farm equipment business go to just short of sixty percent of corporate sales."

Also in 1926, Allis-Chalmers acquired Nordyke Marmon & Company of Indianapolis, Indiana, a maker of flour-milling equipment. In 1927, it acquired the Pittsburgh Transformer Company, a maker of electrical transformers.

In 1928, Allis-Chalmers acquired the Monarch Tractor Company of Springfield, Illinois, thus adding a line of crawler tractors. In 1929, it acquired the La Crosse Plow Works of La Crosse, Wisconsin. The La Crosse Plow Works had a good-quality plow and various desirable implements, which now expanded the Allis-Chalmers implement line. Also in 1929, Harry Merritt was in California when the bright orange California poppy blossoms inspired him to think about the use of bright colors in marketing. Brightly colored things that can be seen from far away had potential in farm equipment marketing. He soon changed the paint color of Allis-Chalmers's tractors to Persian Orange, the available paint color that he felt most closely resembled the California poppy's color. Thus began the tradition of orange Allis-Chalmers tractors. Various competitors would follow suit over the next decade, as International Harvester switched to all-red (1936), Minneapolis-Moline switched to Prairie Gold (late 1930s), and Case switched to Flambeau Red (late 1930s). John Deere already had a distinctive color scheme with its bright green and yellow.

In 1928, Henry Ford canceled U.S. production of the Fordson tractor. This disrupted the business of many firms: farm equipment dealers who sold Fordsons and aftermarket equipment builders whose attachments were designed to mount on Fordsons (for example, the Gleaner combines of the 1920s mounted on Fordsons, and many Fordson industrial tractors used aftermarket attachments). Many of these firms formed a conglomerate in 1928 called the United Tractor & Equipment corporation. United arranged a deal with Allis-Chalmers to build a tractor to substitute for the now-missing Fordson. Around 1930, the United conglomerate collapsed. The reasons that various authors have given have been disagreements between its investors, the onset of the Great Depression, and the fact that Ford Motor Company Ltd of England, which was continuing the Fordson line independently of the U.S. Ford company, began exporting new Fordsons to America. The United tractor became the Allis-Chalmers Model U.

1930s

The 1930s were a pivotal decade. Despite the Great Depression, Allis-Chalmers succeeded as demand for its machinery continued.

In 1931, it acquired Advance-Rumely of La Porte, Indiana, mostly because Merritt wanted the company's network of 24 branch houses and about 2,500 dealers, which would greatly increase Allis-Chalmers's marketing and sales power in the farm equipment business. Also in 1931, the corporation's electrical equipment business expanded via acquisition when Brown, Boveri & Cie, in a financial pinch because of the Depression, sold its U.S. electrical operations to Allis-Chalmers. After 1931 Allis-Chalmers was the licensee for U.S. sales of European products of Brown, Boveri & Cie.

In 1932, Allis-Chalmers collaborated with Firestone to introduce pneumatic rubber tires to tractors. The innovation quickly spread industry-wide, as (to many farmers' surprise) it improved tractive force and fuel economy in the range of 10% to 20%. Within only 5 years, pneumatic rubber tires had displaced cleated steel wheels across roughly half of all tractors sold industry-wide. Cleated steel remained optional equipment into the 1940s. Also in 1932, Allis-Chalmers acquired the Ryan Manufacturing Company, which added various grader models to its construction equipment line.

In 1933, Allis-Chalmers introduced its Model WC, its first-generation row-crop tractor, which would become its highest-selling tractor ever. In 1937, its lighter and more affordable second-generation row-crop, the Model B, arrived, and also became a top seller. Its All-Crop Harvester was the market leader in pull-type (tractor-drawn) combine harvesters.

In October 1937, Allis-Chalmers was one of fourteen major electrical manufacturing companies that went to court to change the way labor unions excluded contractors and products in the building trades through the union use of the "Men and Means Clause". The action of Allis-Chalmers and others eventually resulted in the U.S. Supreme Court decision of June 18, 1945, that ended certain union practices that violated the Sherman Antitrust Act.

1940s

World War II caused Allis-Chalmers, like most other manufacturing companies, to become extremely busy. As happened with many firms, its civilian product lines experienced a period of being "on hold", with emphasis on parts and service to keep existing machines running, but its war materiel production was pushed to the maximum of productivity and output. In the late 1930s through mid-1940s, Allis-Chalmers made machinery for naval ships, such as Liberty ship steam engines, steam turbines, generators, and electric motors; artillery tractors and tractors for other army use; electrical switches and controls; and other products. Allis-Chalmers was also one of many firms contracted to build equipment for the Manhattan Project. Its experience in mining and milling machinery made it a logical choice for uranium mining and processing equipment. Allis-Chalmers ranked 45th among United States corporations in the value of wartime military production contracts.

Immediately at the war's end, in 1945–1946, Allis-Chalmers endured a crippling 11-month labor strike. Buescher was convinced that the corporation never entirely recovered from the effects of this strike. This seems debatable given the various successes that Allis-Chalmers did have during the next 30 years, including prosperity in the farm equipment business in the 1950s and 1960s. But it certainly gave competitors a chance to grab market share.

After WWII some companies refused to sell equipment to Japanese farmers. Allis-Chalmers dealers did not hesitate to sell to these farmers so many farms to this day still have an Allis-Chalmers tractor in Oregon.

In 1948, the Model WC was improved with various new features and became the Model WD, another top seller. The WD was a milestone for the company. It included fully independent power take off, which was powered by a two clutch system. It also included power adjust rear wheels, which became an industry standard. Production of this model continued into 1953, with nearly 150,000 tractors produced.

1950s

The 1950s were a time of great demand for more power in farm tractors, as well as greater capability from their hydraulic and electrical systems. It was also a decade of extensive dieselization, from railroad locomotives to farm tractors and construction equipment. In 1953, Allis-Chalmers acquired the Buda Engine Company of Harvey, Illinois. Allis wanted Buda for its line of diesel engines, because its previous supplier, Detroit Diesel, was a division of General Motors, whose recent acquisition of the Euclid heavy equipment company now made it a competitor of Allis-Chalmers for construction equipment business. The Buda-Lanova models were re-christened the "Allis-Chalmers Diesel" engine line. Diesel engineers were busy during the following years updating and expanding the line.

In 1952, the company acquired Laplant-Choate, which added various models of scrapers to its construction equipment line.

In 1953, the WD-45 was introduced, replacing the WD. The motor was increased to 226 cubic inches, giving it 30 horsepower on the drawbar at the Nebraska Tests. This was almost double the horsepower of the WD. A new Allis chalmers designed Snap- Coupler hitch was used. It allowed the operator to hook up to an implement from the seat of the tractor. A Buda diesel-powered WD-45 was introduced in 1955. This series stayed in production until the unveiling of the D-series in 1957.

In 1955, the company acquired Gleaner Manufacturing Company, which was an important move for its combine harvester business. Allis was the market leader in pull-type (tractor-drawn) combines, with its All-Crop Harvester line. But acquiring Gleaner meant that it would now also be a leader in self-propelled machines, and it would own two of the leading brands in combines. The Gleaner line augmented (and later superseded) the All-Crop Harvester line, and for several years Gleaner's profits made up nearly all of Allis-Chalmers' profit. Gleaners continued to be manufactured at the same factory, in Independence, Missouri, after the acquisition.

In 1957, the Allis-Chalmers D Series of tractors was introduced. It enjoyed great success over the next decade.

In 1959, Allis-Chalmers acquired the French company Vendeuvre. Also in 1959, it acquired Tractomotive Corporation of Deerfield, Illinois, which it had been partnering with as an auxiliary equipment supplier for at least a decade.

In Haycraft's history of the construction equipment business (2000), he expressed the view that Allis-Chalmers relied too heavily for too long on partnering with auxiliary equipment suppliers, and acquiring them, instead of investing in in-house product development. In his view, this strategy limited the company's success in this business, and it eventually had to spend the development dollars anyway. Buescher's comments about the Buda acquisition and the need for subsequent improvement of its designs seem to corroborate this view. However, the topic is multivariate and complex; elsewhere in his memoir, Buescher presents a viewpoint in which investing in research and product development is an expensive move that often does not pay off for the innovator and mostly benefits competitor clones.