Allis-Chalmers

by Robert Klassen
by Robert Klassen

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Fifty-years ago I got my first summer job at Allis-Chalmers, as a mail boy. The LaPorte factory was called the Harvester Division because they designed and built the all-crop harvester, also known as the combine, the round-bale hay baler, and various other farming implements. My job was to pick up and sort the mail and deliver it throughout the factory four times a day.

The mail boy went everywhere on the 150 acre site, so I saw the executive offices, the engineering department, the pattern-making shop, the foundry, the powerhouse, the machine shops, the paint shop, the metallurgy lab, the experimental department, and the assembly lines. If I had time I’d stroll through the idle government building where they had built armored personnel carriers during WWII and later the Ontos for the Marines. The sights and sounds of a major manufacturing plant in operation were fascinating and impressive to this sixteen year-old boy.

It’s all gone now. The very last building left standing, the powerhouse, is about to be demolished. The site, located in the middle of town, is intended to be a shopping mall. So where American machines were once invented, designed, manufactured, and exported all over the world, soon manufactured goods imported from all over the world will be sold. How did this happen?

I can only touch on the highlights in this space, but the story begins in the 1800s with the Allis Company in Milwaukee, Wisconsin and the Rumley Company in LaPorte, Indiana. Allis merged with Chalmers and diversified, and that became the company method of expansion; by the early 1900s it was a leading manufacturer of gigantic electrical generators. Meanwhile, the Rumley Company had adapted the early stream engine tractor to kerosene and manufactured the Oil Pull farm tractor. This ponderous and slow giant could pull a sixteen-bottom plow, which was just what prairie farmers needed.

Allis-Chalmers decided to diversify into farm machinery and they bought Rumley in 1931, mainly, it is said, to acquire their widespread distributorships in farming communities. Indeed, A-C manufactured their own gasoline engine tractors, and the Oil Pull gradually disappeared (those machines are worth a fortune today).

The LaPorte plant closed in 1984 and the farm equipment division was sold to a German company the following year. Allis-Chalmers disappeared the same way it had appeared, one division at a time. LaPorte lost 3000 jobs. But why?

I’ve read and I’ve heard a lot of stories. The indisputable fact is that the company lost its market edge during the UAW strike of 1946 – 1947 that lasted 329 days. Many people have said it was orchestrated by Stalin through the American Communist Party to cripple American industry. Allis-Chalmers was the central manufacturer of industrial products that were sold to other industries and the goal was to stop this supply. If that story is true, Stalin misjudged American industry. Competitive industries immediately rushed into the gap, while Allis-Chalmers bled cash for a year.

Many companies benefited from that hiatus. Caterpillar and John Deere come to mind, but Westinghouse and General Electric also gained market share. I don’t think A-C ever recovered. When I worked there ten years later, the bad feelings between management and union were still palpable, which had to have had a hidden cost. Top management was also scrambling to catch up with the rapid changes in both industry and agriculture. They bought the Gleaner company in 1955 to compete with the fast self-propelled harvesters that were taking over that market. The small family diversified farm was history, so small farm machinery didn’t sell. If one guy was going to handle 2000 acres of corn, say, he wanted big, fast, and efficient machines. Unfortunately, A-C resisted the trend until it was almost too late. They also had growing legal problems in the farm machinery division, because there is only so much an engineer can do to idiot-proof a complex and highly dangerous machine like a baler, corn picker, cotton picker, or harvester. I wonder how many one-armed farmers lived on the legal settlements.

I’m glad I had the chance to see a manufacturing industry in operation first-hand. I had no idea it was an era coming to an end. My high school was chiefly devoted to teaching entry-level skills in manufacturing, like metalworking, woodworking, typing, and accounting. And socialism. The school actively promoted union socialism. Well, they won. The union played a major role in the demise of Allis-Chalmers.

May 14, 2007

Robert Klassen [send him mail] retired from a forty-year career in critical-care respiratory therapy. He is the author of five books, including Atlantis: A Novel about Economic Government, and Economic Government, which describe a solution to the problem of political government. Here's his web site.

Copyright © 2007 Robert Klassen

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