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Corporate Culture and Marketing in the American Railway Locomotive Industry: American Locomotive and Electro-Motive Despond to Dieselization

Published online by Cambridge University Press:  13 December 2011

Albert Churella
Albert Churella
Affiliation:
Albert Churella is a senior lecturer in history atThe Ohio State University.
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Extract

By the 1930s, the American Locomotive Company (ALCo) and the Electromotive Company (EMC) controlled the diesel locomotive industry. Although ALCo enjoyed sound financial status, decades of experience in steam locomotive production, and close ties with its customers, it quickly lost ground to the newly established EMC. Electromotive's founder, Harold Hamilton, emphasized the importance of marketing, including post-sales support services, and his strategy helped Electromotive to surpass ALCo's diesel locomotive production by 1935. ALCo continued to neglect its marketing capabilities, and remained a poor second to Electromotive until it ceased production altogether in 1969. ALCo failed in large part because it could not modify its corporate culture, which was superbly equipped for steam locomotive production but ill-suited to the diesel locomotive industry.

Type
Articles
Information
Business History Review , Volume 69 , Issue 2 , Summer 1995 , pp. 191 - 229
Copyright
Copyright © The President and Fellows of Harvard College 1995

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References

1 Railway Age 119 (15 Dec. 1945): 970–2Google Scholar.

2 See also Churella, Albert, “Corporate Response to Technological Change: Dieselization and the American Railway Locomotive Industry during the Twentieth Century,” (unpublished Ph.D. diss., The Ohio State University, 1994)Google Scholar, which examines the six major firms in the locomotive industry—ALCo, Baldwin, Lima, Fairbanks-Morse, the Electro-Motive Division of General Motors, and General Electric.

3 The definition of corporate culture used here refers to the beliefs, attitudes, and values of company management, the way in which these beliefs were shaped by education and work experience, and the impact of the resulting values on corporate decision-making processes. The ways in which executives were rewarded (or punished) for their conformity (or lack thereof) to these unwritten corporate values are also important components of corporate culture. The concept of corporate culture has attracted increasing interest during the last decade, particularly among business writers. An early, although still useful, broad analysis of the interrelationship between culture and society is Geertz, Clifford, The Interpretation of Cultures (New York, 1973)Google Scholar. Hundreds, if not thousands, of books and articles relating to corporate culture have appeared in the business press over the past decade. Perhaps the best known is Peters, Thomas and Waterman, Robert H., In Search of Excellence (New York, 1982)Google Scholar. Kotter, John P. and Heskett, James L., in Corporate Culture and Performance (New York, 1992)Google Scholar offer a multi-industry overview of maladaptive corporate cultures, cultures that “can also lead intelligent people to walk, in concert, off a cliff” (8). Such was the case at ALCO.

Recent articles dealing with corporate culture in the modern business context include Jacques Bourgault, Dion, Stephane, and Lemay, Marc, “Creating a Corporate Culture: Lessons from the Canadian Federal Government,” Public Administration Review 53 (Jan. 1993): 73–80Google Scholar; Gaughan, Tom, “The Corporate Culture of OCLC,” American Libraries 22 (Oct. 1991): 894–6Google Scholar; Jérôme-Forget, Monique, “Changing the Corporate Culture,” Business Quarterly 56 (Winter 1992): 107–111Google Scholar; Morgan, Malcolm J., “How Corporate Culture Drives Strategy,” Long Range Planning 26 (April 1993): 110–118CrossRefGoogle Scholar; and Rollins, Thomas, “Two Studies Define Link Between Corporate Culture and Business Performance,” Employment Relations Today 20 (Summer 1993): 141–57CrossRefGoogle Scholar.

4 Scholars are showing an increased interest in an examination of corporate culture from an historical perspective. Dellheim, Charles, in: “Business and Time: The Historian and Corporate Culture,” The Public Historian 8 (Spring 1986): 9–22CrossRefGoogle Scholar, and “The Creation of a Company Culture: Cadburys, 1861–1931,” The American Historical Review 92 (Feb. 1987): 13–44CrossRefGoogle Scholar, shows how strong religious beliefs can shape a company culture and how that culture, in turn, can affect the performance of a company and the attitudes of its workers, even after the founders have departed the scene. Rowlinson, Michael and Hassard, John, “The Invention of Corporate Culture: A History of the Histories of Cadbury,” Human Relations 46 (March 1993): 299–326CrossRefGoogle Scholar, offers a different view of corporate culture at Cadburys, suggesting that religious values formed the centerpiece of a mythical corporate culture fabricated to ensure worker loyalty. Childs, William R., “The Transformation of the Railroad Commission of Texas, 1917–1940: Business-Government Relations and the Importance of Personality, Agency Culture, and Regional Differences,” Business History Review 65 (Summer 1991): 285–344CrossRefGoogle Scholar and Vrooman, David M., Daniel Willard and Progressive Management on the Baltimore and Ohio Railroad (Columbus, Ohio, 1991)Google Scholar illustrate the ability of powerful individuals to shape an organizational culture, especially if they are able to use symbolism that is potent and familiar to a variety of individuals both inside and outside an organization. Tiffany, Paul A., in The Decline of American Steel: How Management, Labor, and Government Went Wrong (New York, 1988)Google Scholar, shows that a “deeply embedded culture of distrust” (190), shared by managers, workers, and government officials alike, had a disastrous effect on the postwar American steel industry. Blackford, Mansel, in A Portrait Cast in Steel: Buckeye International and Columbus, Ohio, 1881–1980 (Westport, Conn., 1982)Google Scholar and McCurdy, Howard E., in Inside NASA: High Technology and Organizational Change in the U.S. Space Program (Baltimore, Md., 1993)Google Scholar, make observations analogous to those in this study: namely, that seemingly capable and successful executives can become so enmeshed in a corporate culture that they are unable to adapt to new realities.

5 This window of opportunity opened in about 1932, by which time diesel engine technology had advanced sufficiently to make widespread dieselization economically feasible. The window closed in 1940, when Electro-Motive introduced its Model FT, which gained widespread acceptance in the railroad industry and virtually assured Electro-Motive's future success. According to business historian Alfred D. Chandler, Jr., first-mover advantages accrue to the first firm in an industry to make the combined investments in the manufacturing facilities, marketing networks, and managerial capabilities that are necessary to exploit new market opportunities. Even though ALCo pioneered diesel locomotive technology, the firm did not make these investments, and so failed to garner first-mover advantages or to create substantial barriers to entry. Chandler, , Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990), 34–5Google Scholar, 62–3.

6 In his study of the Baldwin Locomotive Works, ALCo's chief competitor in steam locomotives, John Brown shows that Baldwin sowed the seeds of its own destruction in the first decade of the twentieth century, well before diesel locomotive technology had matured. He contends that, by 1907, railroads had usurped Baldwin's control over steam locomotive technology, a problem made more serious by the increasing regulation and declining financial health of the railroad industry. ALCo entered the 1920s in a much more sound condition than Baldwin, however. Brown, John K., “The Baldwin Locomotive Works, 1831–1915: A Case Study in the Capital Equipment Sector,” (unpub. Ph.D. diss., University of Virginia, 1992), 353–64Google Scholar, (forthcoming, Baltimore, Md., 1995).

7 Chandler, Scale and Scope, 658–65.

8 EMD's earnings were but a fraction of those of its parent company. While EMD locomotive sales were $85 million in 1960, total GM sales were $12.7 billion. United States of America vs. General Motors Corporation, case # 61CR356, United States District Court, Southern District of New York, filed 12 April 1961Google Scholar, National Archives, Northeast Region, New York, 2, 7–10; Marx, Thomas G. “Technological Change and the Theory of the Firm: The American Locomotive Industry, 1920–1955,” Business History Review 50 (Spring 1976), 9CrossRefGoogle Scholar.

9 In spite of widespread popular interest in railroads in general and steam locomotives in particular, little detailed historical research has been conducted on the American locomotive industry during the twentieth century. Some of the best recent scholarship concerning the diesel locomotive industry has come from Thomas Marx: “Technological Change and the Theory of the Firm,” 1–24 and “The Diesel-Electric Locomotive Industry: A Study in Market Failures,” (unpublished Ph.D. diss., University of Pennsylvania, 1973)Google Scholar. Marx, an economic historian, uses the diesel locomotive industry as a case study to determine the advisability of proactive federal antitrust policy. He is not particularly interested in corporate culture or managerial responses to technological change per se; and, furthermore, Marx did not have access to the wealth of ALCo records at Syracuse University. Other useful works include Bingham, Robert Charles, “The Diesel Locomotive: A Study in Innovation,” (unpublished Ph.D. diss., Northwestern University, 1962)Google Scholar; Park, Donald Kentfield II, “An Economic Analysis of Innovation and Activity: American Steam Locomotive Building, 1900–1952,” (unpublished Ph.D. diss., Columbia University, 1973)Google Scholar; and Hydell, Richard P., “A Study of Technological Diffusion: The Replacement of Steam by Diesel Locomotives in the United States,” (unpublished Ph.D. diss., The Massachusetts Institute of Technology, 1977)Google Scholar.

10 California legislation mandating zero-emission automobiles offers a recent parallel to the Kaufman Act. For another view of the effect of public concern for safety on the interaction between government and the railroad industry, see Aldrich, Mark, “Combating the Collision Horror: The Interstate Commerce Commission and Automatic Train Control, 1900–1939,” Technology and Culture 34 (January 1993): 49–77CrossRefGoogle Scholar.

11 Railway Age, 108 (25 May 1940): 933Google Scholar; Kirkland, John F., The Diesel Builders, Vol. 2: American Locomotive Company and Montreal Locomotive Works (Glendale, Calif., 1989), 37–39Google Scholar.

12 In the “feast-or-famine” steam locomotive industry, stockholders expected and received high dividends when sales were brisk. Such was the case during the 1920s. Dividends on a share of common stock, with a market price of approximately $100, were $6.00 in 1924, $18.00 in 1925, and $8.00 per year between 1926 and 1929—despite the fact that the post-World War I locomotive boom ended in 1925. At the same time, ALCo's net earnings were $7.45 per share in 1926, $4.80 per share in 1927, $1.92 per share in 1928, and $5.40 per share in 1929. Even though ALCo's earnings per share were only $1.41 per share in 1930, the company still managed to pay a $4.50 dividend. Baldwin's dividend policy was equally generous during the 1920's, which doubtless contributed to that company's 1935 bankruptcy. See Barron's, 7 June 1937, 9.

13 Dana T. Hughes, “A History of Schenectady Operations of Alco Products, Inc.,” reprinted from the Schenectady Union-Star, 22 April 1955, The American Locomotive Company Collection at the George Arents Research Library, Syracuse University, Syracuse, New York (hereafter referred to as the ALCo Collection), box 11; “New Muscle in Diesels,” reprinted from Alco Review, Spring-Summer 1959, ALCo Collection, box 1; Alco Products Review, 5 (Spring/Summer 1956), 15Google Scholar.

14 ALCo, Baldwin, and Lima all purchased electrical equipment from outside suppliers—a strategy that greatly reduced the investment in capital, personnel, and research that would have been necessary to develop proprietary electrical equipment technology. Electro-Motive also relied on outside suppliers, since it subcontracted all railcar production during the 1920's, and purchased GE electrical equipment for diesel locomotives manufactured prior to 1938. It does not appear, therefore, that ALCo's reliance on GE electrical equipment put the company at a competitive disadvantage with Electro-Motive.

15 In 1937, American railroads spent $50 million per year on the provision and treatment of water for steam locomotives. One western railroad, the Santa Fe, used tank cars to haul more than one million gallons of water per day to the arid station at Ash Fork, Arizona. Not surprisingly, the Santa Fe was a major early customer for EMC diesels. Railway Age, 118 (24 March 1945): 541–2Google Scholar; Remarks of Ralph Budd at a luncheon given by Alfred P. Sloan, Jr., New York, 28 Oct. 1937, Association of American Railroads Library, Washington (hereafter referred to as AAR).

16 Garmany, John Bonds, Southern Pacific Dieselization (Edmonds, Washington, 1985), 5Google Scholar; Railway Age 74 (20 Jan. 1923): 241–3Google Scholar; 78 (11 April 1925): 939–41; 121 (27 July 1946): 125; 123 (20 Sept. 1947): 476–7; 123 (15 Nov. 1947): 829–31; Remarks of Ralph Budd at a luncheon given by Alfred P. Sloan, Jr., New York, 28 Oct. 1937, Association of American Railroads Library, Washington, D.C.

17 ALCo's experience is thus similar to the pattern discussed by Bower, Joseph L. and Christensen, Clayton M. in “Disruptive Technologies: Catching the Wave,” Harvard Business Review 73 (Jan.-Feb. 1995): 43–53Google Scholar. Managers focused their attention on sustaining technology (steam locomotives) since these clearly offered greater power than diesels and appealed to long-time customers (railroad operating officials). As a result, they ignored the potential of disruptive technology (diesels) and allowed a small upstart company (Electro-Motive) to sell a different set of performance characteristics to a different set of customers (railroad finance officials). The horsepower disadvantage of diesels was ultimately insignificant, however, since by 1940 technicians at both Electro-Motive and ALCo realized that multiple-unit operation allowed one engineer to control several separate diesel units that together could outpull any steam locomotive.

18 The small size of the locomotive market, especially during the 1930s, combined with the tendency of railroads to order many copies of the same locomotive design, caused rapid fluctuations in market share, as was the case with ALCo between 1935 and 1936. Even in the larger postwar locomotive market, a single large order (fifty or more units) could cause a sharp rise in market share. Marx, “Technological Change and the Theory of the Firm,” 9; Alco Products Review, 5 (Spring/Summer 1956): 15Google Scholar. For information on EMD's La Grange facility, see Railway Age, 98 (23 Feb. 1935): 312Google Scholar; 98 (23 March 1935): 472.

19 For more on the relationship of operational routines to corporate cultures, see Nelson, Richard R. and Winter, Sidney G., An Evolutionary Theory of Economic Change (Cambridge, Mass., 1982), 14–15Google Scholar.

20 Railway Age, 104 (7 May 1938): 796–801Google Scholar.

21 “General Motors Diesel Locomotives,” Statement by C. R. Osborn, Vice-President, General Motors, before the Subcommittee on Antitrust and Monopoly of the U.S. Senate Committee on the Judiciary, Washington, 9 Dec. 1955, 17.

22 Railway Age, 116 (12 Feb. 1944): 369Google Scholar.

23 ALCo, 1940 Annual Report, 5; Railway Age, 108 (9 March 1940): 445Google Scholar, 452 (quote); 120 (12 Jan. 1946): 146; 120 (4 May 1946): 906.

24 ALCo, 1954 Annual Report, 14; New York Times, 26 Feb. 1954, 32; Railway Age, 120 (12 Jan. 1946): 146Google Scholar.

25 New York Times, 29 Oct. 1943, 29; 14 Jan. 1950, 19; Railway Age, 119 (6 Oct. 1945): 579Google Scholar; 120 (12 Jan. 1946): 146; 125 (9 Oct. 1948): 693–4; 128 (21 Jan. 1950): 181; Barron's, 30 May 1955, 19–20.

26 Railway Age, 108 (9 March 1940): 445, 452Google Scholar.

27 ALCo, report of the annual meeting, 19 May 1953, ALCo Collection, box 6; ALCo, press release, 27 Dec. 1962, ALCo Collection, box 13; New York Times, 13 March 1942, 27; 14 July 1944, 21; Railway Age, 133 (8 Dec. 1952): 85Google Scholar.

28 Brown has shown that a considerable degree of standardization and interchangeability existed at Baldwin even in the late 19th century. The same was true of ALCo by the early twentieth century. This standardization existed only within individual locomotive orders (usually no more than a few dozen units) and not throughout the entire railroad industry. In other words, several steam locomotives delivered to the Southern Pacific might be identical, but all would be different from equally-powered locomotives delivered to the New York Central. By 1915, Baldwin offered nearly 500 steam locomotive designs, and would custom-build steam locomotives to individual customer specifications. The one attempt at industry-wide standardization in the steam locomotive industry occurred during World War I, when the United States Railroad Administration developed standardized steam locomotive designs in the interest of wartime production efficiency. Although locomotives produced to these designs were generally satisfactory, the craft nature of steam locomotive manufacture ensured that only minor production efficiencies resulted. After the war, railroads renewed their demands for customized locomotive designs. Not until the advent of the diesel did manufacturers begin to produce identical locomotives for different railroad customers. Brown, “The Baldwin Locomotive Works,” 263–86, 362.

29 Because steam locomotives were largely custom-built to the specifications of individual railroads, locomotive builders rarely kept a large stock of spare parts in inventory. Instead, railroads too small to possess extensive foundry and machine shop facilities described or sent in the defective part, and a spare was either cast or machined from blueprints and patterns kept in a pattern vault. Steam locomotives were thus frequently idled for days or weeks while awaiting a single spare part. Electro-Motive's commitment to standardization among all of its customers increased greatly its ability to supply spare parts on a timely basis.

30 In the late 1930s, Electro-Motive sold diesel switching locomotives direct from stock at a fixed price, much like an automobile dealer. Wartime production restrictions, combined with the high overhead cost of stock production, ended this practice by the early 1940s.

31 Kirkland, , The Diesel Builders, Vol. 2, 57Google Scholar.

32 During the 1930s, the use of diesels to maintain customer loyalty reached is zenith at Baldwin. That company was the highest-cost producer, yet was forced to conform to the pricing structure established by Electro-Motive. As a result, Baldwin lost money on every diesel locomotive it manufactured, and the company prohibited its salesmen from actively soliciting diesel locomotive sales. Diesels would only be made available on the specific request of a valued railroad customer, one who was a long-standing purchaser of steam locomotives.

33 Kotter and Heskett, Corporate Culture and Performance, 143–5, suggest that weak or maladaptive corporate cultures are often characterized by lack of responsiveness, or even arrogance, toward traditionally valued customers. Ironically, ALCo suffered because it continued to be loyal to a set of customers—railroad operating officials—who were increasingly isolated from the railroads' motive power purchasing decisions.

34 Foster, Richard N., Innovation: The Attacker's Advantage (New York, 1986)CrossRefGoogle Scholar discusses the relationship between advocates of new technology (“attackers”) and supporters of the status quo (“defenders”). In terms of Foster's analysis, diesel locomotive technology was at a point of very low performance during the 1920s, and thus ALCo saw little need to invest R&D funds in a product with seemingly little potential. At the same time, the steam locomotive was at the absolute outer limit of its technological capabilities, and funds invested in marginal improvements to steam locomotive technology appeared to be cost effective, yet in reality did little to improve steam locomotive performance relative to diesels. Foster also discusses the tendency of defenders to use new technology as an adjunct to familiar, if increasingly outdated, older technology; this was certainly the case at ALCo and Baldwin.

35 Tirole, Jean, The Theory of Industrial Organization (Cambridge, Mass., 1988)Google Scholar discusses the incentive for a company to delay conversion to a new technology if by so doing it can prevent or slow its adoption. ALCo could not have slowed or prevented the adoption of diesel technology at any time, and it saw no need to do so in the 1930s, since ALCo executives believed (incorrectly) that the diesels technological limitations would prevent it from replacing steam locomotives, at least in the immediate future. Tirole also discusses “positive network externalities”—the concept that a product becomes more valuable as its usage becomes more widespread. This was certainly true of diesels, since their greater diffusion made it easier for railroads to amortize investments in new diesel locomotive servicing facilities. (404–5).

36 Railway Age 115, no. 6 (7 August 1943): 239–40Google Scholar; Reck, Franklin M., On Time: The History of the Electro-Motive Division of General Motors (Detroit, Mich., 1948), 11–14Google Scholar.

37 Harold L. Hamilton, “Historical Background and Notes on the Development of Electro-Motive,” 11–12; Reck, On Time, 44–6.

38 Hamilton, “Historical Background and Notes on the Development of Electro-Motive,” 14–15.

39 Ibid., 19; Reck, On Time, 56.

40 Churella, Albert, “Corporate Response to Technological Change: The Electro-Motive Division of General Motors during the 1930's,” Essays in Economic and Business History 12 (July 1994): 347–54Google Scholar.

41 Electro-Motive's strategy of capturing a niche market and then expanding into more lucrative segments parallels the methods employed by many “attackers” in a wide variety of industries. Foster, Innovation, 158–61; Bower and Christensen, “Disruptive Technologies,” 47.

42 Fortune 19 (March 1939): 138Google Scholar; 38 (July 1948): 76–81, 144–9; “General Motors Diesel Locomotives,” statement by Cyrus R. Osborn before the Subcommittee on Antitrust and Monopoly of the U.S. Senate Committee on the Judiciary, Washington, 9 Dec. 1955, 7.

43 Railway Age 105 (30 July 1938): 203–4Google Scholar.

44 Since Electro-Motive was the largest and lowest-cost diesel locomotive producer, the company was also the price leader in the industry. Locomotive prices, on a cost-perhorsepower basis, were virtually identical throughout the industry. This price structure forced certain companies, such as Baldwin, to consistently sell diesels at a loss.

45 Railway Age 102 (15 May 1937): 832–3Google Scholar; 117 (14 Oct. 1944): 600; 118 (24 March 1945): 541–2; 130 (9 April 1951): 41–4; Untitled history of the Cleveland Diesel Division, 11–12; Reck, On Time, 169–70.

46 Railway Age 130 (9 April 1951): 41–4Google Scholar; GM-EMD, “The Electro-Motive Commitment to Service,” ca. 1970, The General Motors Institute Alumni Foundation's Collection of Industrial History, Flint, Michigan (hereafter referred to as GMI), folder 76–16.4.

47 Barron's, 18 Oct. 1948, 29–30; 11 May 1953, 15–16; Coal Age 52 (Dec. 1947): 74–8Google Scholar; Railway Age 123 (15 Nov. 1947): 829–31Google Scholar; 146 (6 April 1959): 10; 152 (15 Jan. 1962): 16, 103; GM-EMD, “Why America Needs More Diesels Now,” 1950, AAR.

48 The Commercial and Financial Chronicle, 29 Oct. 1945, 2010; 10 June 1946, 3126, Railway Age, 122 (1 Feb. 1947): 290Google Scholar; Diesel Power and Diesel Transportation, Dec. 1947, 66–69.

49 Robert B. McColl, Address to the Railroad Executives' Conference, Schenectady, New York, March, 1948, ALCo Collection, box 6; ALCo, 1946 Annual Report, 3, 11; Railway Age, 120 (20 April, 1946): 839Google Scholar; 121 (19 Oct. 1946): 636–41; 123 (13 Sept. 1947): 450–2; 124 (12 June 1948): 1156–8; 128 (6 May 1950): 894; New York Times, 5 May 1950, 30.

50 ALCo, 1954 Annual Report, 5; Barron's, 30 May 1955, 19–20; New York Times, 11 August 1953, 30.

51 Address by John F. Gordon at EMD banquet, Detroit, Oct. 18, 1961, AAR.

52 Alco Products Review, 5 (Spring/Summer 1956): 15Google Scholar; Railway Age, 140 (23 Jan. 1956): 43–44Google Scholar; 140 (27 Feb. 1956): 24–26.

53 ALCo, 1957 Annual Report, 3–4; ALCo News Release, 6 Aug. 1957, ALCo Collection, box 12; Railway Age, 142 (15 April 1957): 12Google Scholar (quote); 143 (19 Aug. 1957): 10. In 1957, as ALCo was divesting itself of a third of its Schenectady plant, EMD was planning a 42 percent expansion of its La Grange facility. Railway Age, 142 (14 Jan. 1957): 134Google Scholar.

54 ALCo, 1952 Annual Report, 8; 1957 Annual Report, 25; ALCo, 1957 advertisement, reprinted from Diesel Progress, ALCo Collection, box 1; Jack Lillis to Art Batts, 19 Feb. 1963, ALCo Collection, box 12; Railway Age, 136 (1 Feb. 1954): 13Google Scholar; 136 (24 May 1954): 40, 44; 137 (13 Dec. 1954): 70.

55 ALCo, 1954 Annual Report, 5, 12–13; Perry T. Egbert, “Letter to all Shareholders,” 20 April 1955, ALCo Collection, box 6; Schenectady Union-Star, 6 May 1954; Alco Products Review 4 (Fall 1955): 18–21Google Scholar; 5 (Winter 1956): 1; 6 (Spring 1957): 24–5; Barron's, 30 May 1955, 19–20; Railway Age, 136 (3 May 1954): 10Google Scholar; 136 (14 June 1954): 16; New York Times, 8 May 1954, 27Google Scholar; 4 June 1954, 37; 20 April 1955, 53.

56 Alco Products Review, 4 (Winter 1955): 11–16Google Scholar; 4 (Spring 1955); 7 (Winter 1958): 23; Railway Age, 138 (2 May 1955): 14–15Google Scholar.

57 For example, see: Scranton, Philip, “Diversity in Diversity: Flexible Production and American Industrialization,” Business History Review 65 (Spring 1991): 27–90CrossRefGoogle Scholar and Figured Tapestry: Production, Markets, and Power in Philadelphia Textiles, 1885–1941 (Cambridge, Mass., 1989)Google Scholar; Ingham, John N., Making Iron and Steel: Independent Mills in Pittsburgh, 1820–1920 (Columbus, Ohio, 1991)Google Scholar; and Piore, Michael J. and Sabel, Charles F., The Second Industrial Divide: Possibilities for Prosperity (New York, 1984)Google Scholar.

58 New York Times, 9 Jan. 1960, 25; Forbes, 15 April 1962, 50.

59 Alco Products, Inc., Press Release, 11 March 1963, ALCo Collection, box 28; Worthington Corporation, Press Release, 20 July 1967, ALCo Collection, box 29; Barron's, 20 May 1963, 19; Railway Age, 154 (4 Feb. 1963): 16–17Google Scholar; 154 (10 June 1963): 29; 155 (21 Aug. 1963): 50–51; 159 (19 July 1965): 10–12; 163 (31 July 1967): 50.

60 GE's decision to terminate the joint-production agreement was based on that company's concern over an increasing level of defects in ALCo's products. Since these locomotives bore an “ALCo-GE” nameplate, many GE executives felt that their company's reputation was being tarnished by association with ALCo. These managers also saw an opportunity to displace ALCo as EMD's only competitor in the domestic locomotive market. Even two years after the agreement ended, a 1955 GE marketing report noted that “the stigma of lack of reliability … is still following Alco and damaging their reputation, and ours.” General Electric, “Market Analysis, Domestic Road Locomotives,” February, 1955, John W. Barriger III Collection of Railroad History at the Library of the St. Louis Mercantile Association, box H-34.

61 E. W. Manterfleld to Michael Whelan, 9 Sept. 1955, ALCo Collection, box 6; Railway Age, 127 (12 Nov. 1949): 855–6Google Scholar; 135 (7 Sept. 1953): 13; 138 (21 March 1955): 7; 144 (14 April 1958): 46; 150 (12 June 1961): 35.

62 Alco Products, Inc., “Transcript of Annual Stockholder's Meeting,” 21 April 1964, ALCo Collection, box 6; Business Week, 10 March 1962, 132–6; Railway Age, 152 (15 Jan. 1962): 16, 103Google Scholar; 156 (20 Jan. 1964): 56–58; 157 (12 Oct. 1964): 38–40; 159 (13 Sept. 1965): 68–70.

63 New York Times, 8 March 1967, 61; Marx, “Technological Change and the Theory of the Firm,” 9.

64 Typescript of a speech to commemorate the 125th anniversary of Worthington Corporation, 26 Feb. 1965, ALCo Collection, box 11; New York Times, 23 July 1964, 33; Forbes, 1 Aug. 1964, 23.

65 Forbes, 1 Aug. 1964, 23.

66 New York Times, 28 Nov. 1967, 65; 7 Jan. 1969, 49; Barron's, 17 Aug. 1970, 26–27; Railway Age, 164 (22 Jan. 1968): 49–50Google Scholar; 164 (3 June 1968): 27; Kerr, O. M., Illustrated Treasury of the American Locomotive Company (Alburg, Vermont, 1980) 18, 23Google Scholar.

67 Railway Age 122 (31 May 1947): 1110–1Google Scholar (quote).

68 Railway Age 119 (28 July 1945): 179Google Scholar; 122 (8 Feb. 1947): 324-5; 122 (31 May 1947): 1110-1; 122 (23 June 1947): 1294D19-26; 173 (28 Aug. 1972): 40-1; GM-EMD, The Diesel Locomotive: Revolution on Rails, ca. 1950, AAR.

69 Railway Age 173 (28 Aug. 1972): 401Google Scholar (quotes); GM-EMD, “Safeguarding Railroad Earnings,” 1952, AAR; Nelson C. Dezendorf, speech before the New York Society of Security Analysts, New York, 1 June 1951, AAR; R. C. Parsons to Ivan E. Rice, 13 Oct. 1953, Louisville and Nashville Railroad Collection, University of Louisville (Record Group 123, hereafter referred to as the L&N Records), box 2, folder B-77203.

70 Industrial Marketing 31 (Nov. 1946): 30–1Google Scholar; Railway Age 173 (28 Aug. 1972): 40–1Google Scholar (quote), John E. Tilford to M. H. Gardner, 15 July 1948, L&N Records, box 2, folder 81930.

71 Railway Age 125 (25 Dec. 1948): 1188Google Scholar; 134 (2 March 1953): 12; United States of America vs. General Motors Corporation, case # 61CR356, 4.

72 Business Week, 2 Sept. 1950, 40–42; Railway Age 121 (5 Oct. 1946): 573Google Scholar; 132 (4 Feb. 1952): 20–1; 133 (4 Aug. 1952): 96; 138 (2 May 1955): 13; “Welcome to the Electro-Motive Division of General Motors,” ca. 1955, GMI, folder B3/17.

73 Railway Age 132 (14 April 1952): 57–8Google Scholar; 135 (21 Dec. 1953): 14; Reck, Franklin M., The Dilworth Story (New York, 1954), 99Google Scholar.

74 Railway Age 129 (12 Aug. 1950): 76Google Scholar; 129 (19 Aug. 1950): 43–4; 132 (18 Feb. 1952): 13; 132 (17 March 1952); 132 (14 April 1952): 57-8; 147 (14 Sept. 1959): 67.

75 For a comprehensive analysis of the effects of a maladaptive corporate culture on the American automobile industry, see: Yates, Brock, The Decline and Fall of the American Automobile Industry (New York, 1983)Google Scholar. DeLorean, John Z. and Schwarz, Ted, DeLorean (Grand Rapids, Mich., 1985)Google Scholar and Iacocca, Lee and Novak, William, lacocca: An Autobiography (New York, 1984Google Scholar) offer more personal accounts of this process.