Why did ALCO go out of business?

[Ulrich]

Did they make a decision to get out of the locomotive business or was there a problem with the locomotives they built (or something else)? Several shortlines today run nothing but ALCOS (or MLWs)...like the Ottawa Central and the Arkansas and Missouri. Nobody runs GE U Boats anymore yet GE has become the number one locomotive builder.

 

[scottychaos]

There were lots of factors, but the short story is that GE, who was once a partner in Alco's diesel building, turned competitor when they came out with their own line of road diesels, starting with the U25B in 1960.

Alco just couldnt compete, EMD and GE made better products during the 1960's, Alcos had more maintance issues that EMD and GE locos of the time, and the railroads chose to buy the more reliable product..

Alco didnt "choose" to go out of buisness..they didnt have a choice. they closed shop in 1969.

The "last-gasp" of Alco, the Century series, were good engines! and as you said, many short lines are still running them today..they were good, just not "good enough"..Alco became the number three builder during the 60's, and the market couldnt support, and didnt need, three builders.

Scot

[Ulrich]

Thanks Scott...Steve Lee (Of UP steam locomotive preservation fame) had a rather humorous article in Trains a few years back about his days with IC and his experiences with the C636 diesels.  

 I guess MLW thought they could turn things around by purchasing the Alco designs and continuing the line in Canada for another seven or eight years. As I understand it the M630s and 636s were unreliable also although both CN and CP ran them until the early 1990s.

[CSSHEGEWISCH]

Among the other factors mentioned above, Alco never really recovered from the problems that came with the 244 engine.  Once a negative reputation has been established, it's very difficult to recover from it.  The 251 engine is a good engine, and can still be found in a variety of non-railroad uses, it's just that Alco's sales were never good enough to carry the company while the 251 established it's own rep.

[scottychaos]

 

 I guess MLW thought they could turn things around by purchasing the Alco designs and continuing the line in Canada for another seven or eight years. As I understand it the M630s and 636s were unreliable also although both CN and CP ran them until the early 1990s.

 

It wasnt really a case of MLW "purchasing the Alco designs"..they already had them! MLW had been building Alcos since 1904! ;) steam and diesel..they were basically a subsidiary building site, building the same Alco designs that were designed in Schenectady..Schenectady was always the "home office"...so instead of saying "MLW thought they could turn things around by purchasing the Alco designs and continuing the line in Canada for another seven or eight years." it would be more acurate to say "MLW continued to build the Alco designs in Canada for another seven or eight years, because they still had willing customers with the Canadian railroads."

I dont know if MLW ever thought they could "turn things around" or not..probably not.

they did some minor R&D after 1969, but didnt work on any major new ideas..they essentially just kept the line going a few more years because they still had the customers.

Scot 

 

[Ulrich]

That makes sense...it looks as if MLW did try to turn things around after the M series failed by introducing the HR series (HR stood for High Reliability)...but apparently they weren't so reliable, and when they failed to catch on MLW got out of the domestic market.

The writing was pretty much on the wall when BC Rail (an all MLW fleet) bought SD40-2s. Clearly they were nolonger happy with the Montreal product.  

[carnej1]

That makes sense...it looks as if MLW did try to turn things around after the M series failed by introducing the HR series (HR stood for High Reliability)...but apparently they weren't so reliable, and when they failed to catch on MLW got out of the domestic market.

The writing was pretty much on the wall when BC Rail (an all MLW fleet) bought SD40-2s. Clearly they were nolonger happy with the Montreal product.  

 At the very end of Bombardier's foray into the North American Freight locomotive market  they were developing an all new prime mover: the B2600. This was meant to compete on even terms with the EMD 710 and GE's later, upgraded FDL series engines. The 12 cylinder was supposed to produce over 4000 HP (this was back in the early 80's). I believe that they wanted to try to market new locomotives "South of the (Canadian) Border". BB-MLW did sell some brand new units in the US: in the Seventies the Providence & Worcester (my hometown RR,BTW) purchased several M420W units which operated into the early 1990's.

[carnej1]

That makes sense...it looks as if MLW did try to turn things around after the M series failed by introducing the HR series (HR stood for High Reliability)...but apparently they weren't so reliable, and when they failed to catch on MLW got out of the domestic market.

The writing was pretty much on the wall when BC Rail (an all MLW fleet) bought SD40-2s. Clearly they were nolonger happy with the Montreal product.  

 At the very end of Bombardier's foray into the North American Freight locomotive market they were developing an all new prime mover: the B2600. This was meant to compete on even terms with the EMD 710 and GE's later, upgraded FDL series engines. The 12 cylinder was supposed to produce over 4000 HP (this was back in the early 80's). I believe that they wanted to try to market new locomotives "South of the (Canadian) Border". BB-MLW did sell some brand new units in the US: in the Seventies the Providence & Worcester (my hometown RR,BTW) purchased several M420W units which operated into the early 1990's.

[Boomer Red]

       Maybe someday ALCOs will make a come back! I know that NRE owns the patents etc for many ALCO designed components and I've heard that 4 cycle prime movers like the 251 are more fuel efficient than the 2 cycle that EMD uses. With all the new EPA regulations maybe a modernized version of the 251 engine would work! On a side note growing up near Moncton NB nearly every loco I saw as a child was a MLW and I remember that many CN employees were very sad when they started to get phased out. The big M-liners were apparently very tough engines that would pull like crazy!

[ValorStorm]

they (MLW) did some minor R&D after 1969, but didnt work on any major new ideas..they essentially just kept the line going a few more years because they still had the customers.

However, Bombardier did do some very ground-breaking R&D. In the Western Hemisphere they were the pioneers of AC traction, not GM-Siemens.

[oltmannd]

they (MLW) did some minor R&D after 1969, but didnt work on any major new ideas..they essentially just kept the line going a few more years because they still had the customers.

However, Bombardier did do some very ground-breaking R&D. In the Western Hemisphere they were the pioneers of AC traction, not GM-Siemens.

Really?  I thought the first North American freight AC loco was the Brown-Boveri retrofit of a MLW C640.  I didn't think Bombarier had anything to do with the retrofit.

The second was the Brown-Boveri retorfit of AMTK F40PH #202.

 

[wjstix]

You could argue that ALCO, Baldwin and FM may have pushed the limits of technology too much trying to get the maximum horsepower possible into engines (via turbocharging etc.) which caused some maintenance / reliability issues, whereas GM was content to stay at lower HP but push reliability and dependability.

GM also did a great job in service, having representatives available to help railroads train employees on how the diesels worked and following up with any problems that did occur with the engines. I think the other builders didn't have the money to do as much 'hands on' work as GM.

GM was also good about trade-ins, allowing railroads to get second generation diesels at a reduced price by re-using parts from their first generation (FT's, F2's etc) trade-ins. In fact, they even allowed the SOO to trade in their ALCO FA's for GP-30's, and used the ALCO trucks on the GP's!!

[CSSHEGEWISCH]

EMD had an ulterior business motive for taking trade-ins.  While EMD trimmed its profit margin somewhat by giving the trade-in credit, the trade-in had the effect of taking a locomotive off of the resale market.

[JonathanS]

Among the other reasons that Alco could not compete with GM and GE is financing.  There were quite a number of times that Alco lost the bid because they had to rely on banks for financing the deals where GM and GE could finance the sales internally. 

 

One instance I know about is the Pennsylvania Reading Seashore Lines.  After some demonstrations they decided that the best locomotive for thier needs was the C415.  Since the PRSL had been a money losing line for a long time the banks were not willing to give loans at a reasonable interest rate.  But GM could finance GP38s at a very low interest rate.  So guess what was purchased?  It wasn't the Alco product that the operating department wanted.

[ValorStorm]

they (MLW) did some minor R&D after 1969, but didnt work on any major new ideas..they essentially just kept the line going a few more years because they still had the customers.

However, Bombardier did do some very ground-breaking R&D. In the Western Hemisphere they were the pioneers of AC traction, not GM-Siemens.

Really?  I thought the first North American freight AC loco was the Brown-Boveri retrofit of a MLW C640.  I didn't think Bombarier had anything to do with the retrofit.

The second was the Brown-Boveri retorfit of AMTK F40PH #202.

My bad. That C640 is what I was refering to. I thot Bombardier had already purchased MLW by that time.

[EJE818]

I agree that Alco was doomed when GE stopped helping them out on diesels. After GE started building the U-Boats, that just worsened Alcos chances even more.

[Ulrich]

From what I've read though the U boats weren't that reliable either...in fact more Alcos are in service today than U boats. To the credit of GE, they went from a problematic locomotive line to number one locomotive builder today...that's got to be one of those untold amazing comeback stories... Look at GM in the 70s and 80s...the SD40-2 was the number 1 selling locomotive... GM is out of the locomotive business and it looks as if the GE AC44CW/ES44CW is now the leader..

[ValorStorm]

From what I've read though the U boats weren't that reliable either

There's evidence that it wasn't so much a matter of unreliability from GE as it was better design from EMD. But the UP purchased 10 U28Cs the same year that they bot 10 Century 630s, & the U-boats were off the roster the same year as the C630s, and the Alcos lasted nearly 30 years on the Cartier.

Fact is that BN & UP obtained just enough U-boats during the 1970s to keep EMD honest. The quality stayed up & the price stayed competitive. Around 1980 GE provided the UP with what were essentially C36-7&1/2s. Their reliability was off the charts. This coincided with GMs offering of the SD50... Many thot that would be the death knell for EMD. Happily, no.

[YoHo1975]

You all kinda missed the biggest reason Alco failed though EJE818 hinted at it.

It's not that GE made better locomotives, it's not that the railroads were scared off by the 244. The reason they fell apart is that GE was the supplier of all of their electrical components. When GE went into the market for themselves, Alco had to by electical parts from one of it's biggest rivals.

 

Also, the idea of a modernized T2 compliant 251 is pretty funny. Alcos are famous for their turbolag that sends of large black clouds of exhaust. There's no way you could make the 251 compliant without starting over. 

[beaulieu]

Fact is that BN & UP obtained just enough U-boats during the 1970s to keep EMD honest. The quality stayed up & the price stayed competitive. Around 1980 GE provided the UP with what were essentially C36-7&1/2s. Their reliability was off the charts. This coincided with GMs offering of the SD50... Many thot that would be the death knell for EMD. Happily, no.

The C36-7s weren't THAT great, every last one was off the UP roster, before the first non-wrecked SD50 left the UP roster, and the SD50s were one year older. The C36-7s started off great but they were oddballs, the first fully microprocessor controlled GEs and as such they didn't age very well.

[SSW9389]

Valor Storm see http://utahrails.net/all-time/classic-index.php for the dates for retirement of the C630s and U28Cs from UP. The C630s were sold in 1973 to DM&IR. The U28Cs lasted a full 15 years and were retired in 1981.

 

From what I've read though the U boats weren't that reliable either

There's evidence that it wasn't so much a matter of unreliability from GE as it was better design from EMD. But the UP purchased 10 U28Cs the same year that they bot 10 Century 630s, & the U-boats were off the roster the same year as the C630s, and the Alcos lasted nearly 30 years on the Cartier.

Fact is that BN & UP obtained just enough U-boats during the 1970s to keep EMD honest. The quality stayed up & the price stayed competitive. Around 1980 GE provided the UP with what were essentially C36-7&1/2s. Their reliability was off the charts. This coincided with GMs offering of the SD50... Many thot that would be the death knell for EMD. Happily, no.

[beaulieu]

they (MLW) did some minor R&D after 1969, but didnt work on any major new ideas..they essentially just kept the line going a few more years because they still had the customers.

However, Bombardier did do some very ground-breaking R&D. In the Western Hemisphere they were the pioneers of AC traction, not GM-Siemens.

Really?  I thought the first North American freight AC loco was the Brown-Boveri retrofit of a MLW C640.  I didn't think Bombarier had anything to do with the retrofit.

The second was the Brown-Boveri retorfit of AMTK F40PH #202.

My bad. That C640 is what I was refering to. I thot Bombardier had already purchased MLW by that time.

Right, Bombardier didn't have the ability to build heavy railroad electrical equipment until they purchased ADtranz from Daimeler-Chrysler in 2000. ADtranz was the railroad portion of ABB which they had sold off in the early '90s when ABB ( itself a combination of Sweden's ASEA and Switzerland's Brown-Boveri) decided to concentrate heavy electrical equipment only.  

[Anonymous]

I'm pretty sure that one of the reasons ALCO went out of business as a diesel manufacturer was because they were the best steam locomotive builders in the world.

EMD and GE got a jump on the market- by building and developing diesels from the start.  ALCO had some road diesels out there right before and during WWII- the DL109 comes to mind- but their major focus was steam.  It didn't help ALCO any that the government restricted development of new locomotives during the war.  It also didn't help ALCO that GE did the electrical work.

They survived longer than the other manufacturers did who stuck to steam.  Where now the Baldwins, the Limas? 

[YoHo1975]

That's true, Alco was restricted to making Diesel switchers only while EMD made the road units.

[CNW 6000]

I think the beter reasons were the combination of erikthered and YoHo1975's reasons.  I've seen those facts in other publications alluding to the same conclusion.

[ValorStorm]

The C36-7s weren't THAT great, every last one was off the UP roster, before the first non-wrecked SD50 left the UP roster, and the SD50s were one year older. The C36-7s started off great but they were oddballs, the first fully microprocessor controlled GEs and as such they didn't age very well.

I don't dispute their oddball status. My point is that based on experience with the C36-7.5s the UP made the decision to acquire DASH 8-40Cs & CWs, etc. And the rest is history. Furthermore, the SD50 was a disappointment from the start no matter how long they were tolerated. 3500 hp was just too much to coax out of a 645. That is the reason the 710 was developed (GE had no such difficulty up-rating the FDL-16 from 2500hp to 4400hp for 33 years).

[ValorStorm]

Valor Storm see http://utahrails.net/all-time/classic-index.php for the dates for retirement of the C630s and U28Cs from UP. The C630s were sold in 1973 to DM&IR. The U28Cs lasted a full 15 years and were retired in 1981.

BOY! I'm having all sorts of senior moments on this thread. But I still think "in-service years" includes "stored-serviceable." In either case, the point about the longevity of the C630s is no less valid. Now can I go to prom?

[YoHo1975]

urthermore, the SD50 was a disappointment from the start no matter how long they were tolerated. 3500 hp was just too much to coax out of a 645. That is the reason the 710 was developed (GE had no such difficulty up-rating the FDL-16 from 2500hp to 4400hp for 33 years).

There was a lot more going on then just the 645 being at it's max that caused problems with the SD50. The 645 had no problems at 3300HP. There were a number of components redesigned or made of new materials that failed to work as expected in regular use. 

Once those kinks were worked out, the 50 series lived a reasonably productive life though It certainly wasn't anything like a success. And, to be fair, GE when from the FDL to the 7FDL Which mates a larger Turbo (which was increased again for the C41-8s) Then for the Dash 9, essentially the entire engine block was recast with stronger connecting rods and other parts beefed up, so Certainly GE didn't have some magical engine design with the FDL. They did the same thing EMD did. 

[SSW9389]

YoHo: Not exactly. ALCO built the first true road switchers during the War the RS-1 and RSD-1. During the time that the War Production Board was in effect from May 1942 to February 1945 some 55 RS-1s and another 144 RSD-1s were built by ALCO. The three Black Maria demonstrators were completed in January 1945, but spent their time on test at Schenectady until September 1945. ALCO also built 52 DL109 and 1 DL110 during this period. ALCO had a standing order for 80 diesel freight units from GM&O and this kept them pressing the WPB to allow them to build freight diesels. If allowed by the WPB it would have been possible for ALCO to offer GM&O a unit that looked like the Black Maria with an 8 cylinder 539 engine producing 1350 horsepower.

ALCO's problem was that it lacked an engine capable of high rpm performance to produce the needed horsepower to be competitive with EMD. The 539 engine would have had problems with long periods of high rpm use. ALCO did produce 8 cylinder variants of the 538, 539, and 540 engines for marine and industrial use. The engine problems led ALCO to design and build the 241 engine during the war. Before this design was fully developed and tested a competing design, the model 244 was begun. Failures with the 241 engine turned ALCO away from that design. The need for ALCO to be able to produce competitive diesel locomotives at the close of the war let the 244 engine go into production before it was fully tested.

You can read more about this fascinating subject in Richard Steinbrenner's: The American Locomotive Company A Centennial Remembrance.  

That's true, Alco was restricted to making Diesel switchers only while EMD made the road units.

[SSW9389]

And to dovetail with this quote, GE started undercutting ALCO's foreign business before the Universal Series was offered domestically. GE started building diesel electric road locomotives in 1954 based on the Cooper-Bessemer engine. ALCO was very dependent on foreign sales.

 

I agree that Alco was doomed when GE stopped helping them out on diesels. After GE started building the U-Boats, that just worsened Alcos chances even more.