Allis-Chalmers
Allis-Chalmers was a U.S. manufacturer of machinery for various industries. Its business lines included agricultural equipment, construction equipment, power generation and power transmission equipment, and machinery for use in industrial settings such as factories, flour mills, sawmills, textile mills, steel mills, refineries, mines, and ore mills.
The first Allis-Chalmers Company was formed in 1901 as an amalgamation of the Edward P. Allis Company, Fraser & Chalmers, the Gates Iron Works, and the industrial business line of the Dickson Manufacturing Company. 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-1990s, a series of divestitures transformed the firm and eventually dissolved it. Its successors are Allis-Chalmers Energy and AGCO.
History
Overview
Author-photographer Randy Leffingwell 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 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
was an entrepreneur who in 1860 bought a bankrupt firm at a sheriff's auction, 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 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 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.
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. Walter M. 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, Minneapolis-Moline switched to Prairie Gold, and Case switched to Flambeau Red. 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. 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.