|Author(s):||Churella, Albert J.|
Published by EH.NET (January 1999)
Albert Churella, From Steam to Diesel: Managerial Customs and Organizational
Capabilities in the Twentieth-Century American Locomotive Industry.
Princeton: Princeton University Press, 1998. viii + 215 pp.
$45 (cloth), ISBN: 0-691-02776-5.
Reviewed for EH.NET by Philip Scranton, School of History, Technology, and
Society, Georgia Institute of Technology.
It is a commonplace of twentieth century industrial and railway history
that the steam locomotive (and the firms producing it) fell before the diesel
challenge, which delivered a technologically and economically more efficient
form of motive power, promoted by two of America’s leading corporations,
Motors and later General Electric, enterprises which dominate locomotive
provision to this day. The great virtue of Albert Churella’s slender, but
satisfying study is his sustained effort to probe beneath this truism to
expose the complex and contingent interactions which underlay diesel’s triumph
and the business cultures which sustained steam traction’s construction and
utilization. Churella (Ohio State University)
also makes appealing arguments for individual agency and interpersonal
relations within/between giant firms as key elements in framing the transition,
notes the role of legislation and government contracts at critical moments, and
documents innovators’ persistent stumbling as they sought to design and market
standardized diesel locomotives. Thus From Steam to Diesel represents a
welcome achievement in business and technological history, valuably
complementing John Brown’s recent Baldwin Locomotive Works (Johns
Hopkins, 1995), which analyzes the nation’s leading nineteenth century railway
engine builders, closing at just about the point (c. 1910) at which Churella
takes up the story’s threads.
Constructing locomotives long necessitated that enterprise
owners and managers have the steely resolve to take the long view of markets
and as well, a generous flexibility in meeting their clients’ diverse needs for
equipment. Demand for producers’ goods fluctuated wildly, then as now,
seeming perennially to be
either overheated or “dead.” Railways routinely clustered their orders,
creating backlogs and delays, or deferred upgrades and replacements, thus
forcing workforce and financial retrenchments.
Moreover, the roads’ superintendents of motive power held quite definite
notions about the design characteristics of the locomotives necessary for
different terrains, climates, or levels of use intensity. Building engines in
response to these variations made Baldwin, American Locomotive (ALCo,
the outcome of a tur n-of-the-century merger) and Lima (a perennial trailer,
focused on market niches) virtuosos in the custom and small batch fabrication
of complex mechanical goods. In tandem they developed a sectoral culture of
steam propulsion shared by generations of railway managers and employees,
batteries of product-specific workplace skills, and commitments to particular
“ways of seeing” and addressing technical problems and evaluating locomotives’
adequacy. Each of these assets became a liability as dieselization
gained a foothold.
In theory, diesel engines had powerful advantages over steam, not least
their ability to achieve “thermal efficiencies” vastly higher
(yielding lower fuel costs) than the older technology. Diesels needed no water
supplies, had lower repair expenses, generated more startup force per
horsepower and could, through dynamic braking, ease trains’ passage on long
downgrades. In practice, however, into the 1920s, diesels were far too heavy
for railway use, achieving early success chiefly
in “marine applications” (14-17). Moreover, no experimental design could
reliably transmit the engine’s power directly to traction wheels, an obstacle
resolved by using the diesel to drive electric motors of the sort GE and
Westinghouse had created for
streetcars and interurbans. Freed of the need for electrical power line
contacts (and hence of the huge costs for erecting and maintaining these) and
encouraged by legislation banning steam locomotives from New York and
Baltimore, both companies ventured
into diesel-electric production, GE in alliance with ALCo (using diesels from
Ingersoll Rand) and Westinghouse with Baldwin. Yet it was Harold Hamilton’s
new-start, Electro- Motive, that forged ahead. For years, EM,
clearly an early virtual corporation,
“did not manufacture anything” (32).
Rather Hamilton created a design boutique for self-propelled railcars,
commissioning components and subcontracting their assembly. Rather than
incrementally shifting designs to include “learning by using” improvements
EM froze its designs, reaped “substantial production efficiencies,” then
consolidated accumulated feedback insights periodically into new models.
When the Big Two sidelined their diesel efforts, EM picked up a roster of their
able engineers and made some 500 railcars by 1930, but the Depression emptied
order books, threatening a collapse.
Here Churella turns to the contingent sequence of interactions which
brought EM into General Motors’ orbit and set it on a rocky path to challenge
. In the late 20s, Charles Kettering, GM’s research director, promoted
experiments in using diesels for highway vehicles, quickly finding that
“metallurgy had not yet caught up with diesel engine technology” (38). Once
the economy slumped, Alfred Sloan pressed “Ket” to save on R&D costs by buying
an experienced diesel engine maker. The Winton company, acquired in 1930, had
worked with EM extensively; and Hamilton soon befriended Kettering, turning his
attention to the potential of locomotive diesels and
to aiding EM’s stalled engine-development plans. As an effort to promote GM
diesels by having models designed for Navy contracts power the company’s 1933
Chicago World’s Fair display was flopping badly (“the only part of that engine
that worked well was
the dipstick”), Hamilton and his ally Ralph Budd (head of the Chicago,
Burlington and Quincy) persuaded Sloan and Kettering to install diesels as
drivers for the CB&Q’s new streamlined “train-set” for the Chicago-Denver run.
A second failure would have be en disastrous, but in 1934 the “Zephyr” stunned
everyone, accelerating so rapidly on a test run that its tail lights fell off.
Cheap to operate, fast and reliable, this luxury passenger train created a
national sensation which surely helped Kettering extract a half-million from
Sloan late that year for expanding diesel engine research, then vastly more in
1935 for what became a huge locomotive production plant at LaGrange, IL. In
all this, the key players’
interpersonal networks of trust and confidence
and their uninvolvement with the “steam culture” proved crucial.
If this sounds like the run-up to rapid success, Churella supplies a
cautionary “Not so fast.” Motive power men at most railways derided diesels,
even resisting their use as yard-switchers, where their facility in starting
and stopping could be valuable. EM salesmen thus approached railroad financial
officers with reams of data showing diesels’
cost-savings and began landing orders. Second, the Zephyr-style three or four
train-sets were a dead end, as cars could not be added.
Instead, EM had to design independent passenger diesels to supplement the
smaller switchers, then proceed to the big stuff, freight-hauling locomotives.
Third, railroad workers knew nothing about diesel maintenance and repair,
hence, the makers had to develop extensive training programs,
after-sale service linkages, and inventories of replacement parts for rapid
delivery. GM’s deep pockets were crucial here, for absent system investments
estimates totaling between $17 and $25 million, the diesel campaign may well
have floundered, even in the face of a vast locomotive replacement market
(40,000 engines, perhaps $4 billion over the long term). One further
competitive advantage was that EM,
which became a General Motors division, could mobilize the GM Acceptance
Corporation’s resources to arrange monthly payment plans for railroads, just as
GMAC did for citizens buying Chevrolets. Last, even into recent years, design
failures in new models
of these immensely complex machines (ca. 50-60,000 parts) occurred repeatedly.
Yet it is clear that transferring elements of GM’s auto manufacturing approach
to locomotive building, even if full mass production remained elusive, was a
winning strategy, especially when contrasted with the stumbling efforts of the
steam engine makers.
The three steam locomotive leaders at first
denied the relevance of
diesels to railway needs, then squandered opportunities to adapt their
facilities, engineering practices, and work routines to producing them.
All eventually fashioned diesel locomotives that ranged from dreadful to barely
adequate when put in use by railroads that had long cherished their
steam-powered drivers. Each attempted to use product diversification
strategies (making all sorts of specialized capital goods), but failed to
thrive for reasons that another research project might explore. ALCo, the
least awful diesel builder, remained in the postwar engine market in large part
because railways were
anxious about EMD’s monopoly potential. Once General Electric, which had
supplied ALCo its electrical components,
entered the diesel trade in the 1960s with better models, ALCo quickly faded
from sight. Churella rapidly surveys GE’s challenge to EMD in
closing passages; by 1993 the “newcomer” (which had traction experience from
before 1900) was outselling EMD two engines to one and GM
“contemplated exiting [the] industry.” In response, EMD “allowed its customers
greater control over the design and manufacturing process,” (139)
a step back toward the specialty production format which its standard models
had helped erase in the century’s middle decades. Whether this move indicates
desperation or represents tactical ingenuity lies outside the author’s
boundaries, of course.
In sum, this is an engaging study of the transformation of a specialty
production trade into a standard-product industry, though one which remains
vulnerable to the vicissitudes all capital goods sectors face. Churella’s
to be sure, does not neatly conform to “organizational synthesis”
templates, which he regards as “giv[ing] too little weight to historical
actors” (151). Rather, he urges readers to consider the interplay between
enterprise structure/strategy considerations and those anchored in shared
industrial cultures, technological and personal networks, and state activities,
which, together with far broader phenomena (depressions, wars),
deploy the challenges enterprises must face and create those shifts and
surprises that inspire both the managerial and the historical imagination.
(I know convention mandates that I offer something critical about this work
– OK, the index is inadequate…) This book is well worth the attention of
economic/business historians and their students.
Phil Scranton is the Kranzberg Professor of the History of Technology at
Georgia Tech in Atlanta. His Endless Novelty: Specialty Production and
American Industrialization, 1865-1925 rolled out of Princeton University Press
in December 1997
. He is presently contemplating the horrors of researching the depression-era
decay of specialty manufacturing and its restructuring (in some trades) during
the Cold War decades.
|Subject(s):||Transport and Distribution, Energy, and Other Services|
|Geographic Area(s):||North America|
|Time Period(s):||20th Century: Pre WWII|