EMD History

This page was last updated on October 30, 2021.

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In December 1955, Alfred P. Sloan, Chairman of the Board of General Motors from 1937 to 1956, testified before the Senate Subcommittee On Antitrust And Monopoly Committee.

The following comes from "Hearings Before The United State Senate Subcommittee On Antitrust And Monopoly Committee On The Judiciary. Eighty-Fourth Congress, First Session," December 1955. Testimony of Alfred P. Sloan, president of General Motors:

In 1933 General Motors pioneered the two-cycle, light-weight diesel engine for locomotives. In that year the railroads had 51,000 steam engines in operation. By 1954 there were fewer than 5,000 steam engines in service. The other 46,000 had been replaced by 23,000 diesels.

This dramatic reduction in total number of units required has occurred despite the fact that gross ton-miles transported by the railroads has almost doubled over this span of years, with each freight diesel locomotive unit performing 3.4 times the work of one steam locomotive. Today [1955], diesel locomotives account for 86 percent of all passenger traffic and 84 percent of all freight traffic. They account for 90 percent of all switcher hours.

Based on Interstate Commerce Commission records, diesel locomotives are saving at least $600 million a year in fuel and maintenance costs alone. Railroad officials freely admit that the present healthy financial status of their industry can be attributed largely to the diesel locomotive.

When we created the diesel electric locomotive, there was not a single part of that locomotive but what the functioning and the engineering had been known to the mechanical arts for 50 years. The diesel engine was 50 or 75 years old. It took an organization with courage, with capital, and the know-how, to put the known parts together and make the diesel electric locomotive.

The steam locomotive people could have done it just as well. They didn't have the imagination, they didn't have the courage, they didn't have the capital.

I maintain it was a great accomplishment. I think we contributed a great deal in more employment, in improving the economic position of the railroads. It isn't very often in a short number of years, of say, 20 years about, that we eliminate the steam locomotive that hauled freight and passengers from the time that the railroad was developed. That was what was accomplished. The other steam locomotive people could have done it just as well. They didn't have the imagination, they didn't have the courage, they didn't have the capital.

Even when we came out you would be surprised to see the advertisements that the steam-locomotive people printed in the papers decrying the diesel locomotive and saying it would never get anywhere and yet it eliminated them in the short period of 20 years.

Answering the question "Was it General Motors' financial capacity which was the principal factor enabling it to develop the diesel locomotive?"

No, I think it was quite incidental. I think the other locomotive people, the steam-locomotive people, could have done it if they had had the imagination. Sure we built a plant but the plant was not large. The amount of capital was not great when we started.

I don't think the size of General Motors has anything to do with its efficiency. I think the efficiency depends upon the administrative technique, and the people who comprise General Motors. In the early days, when all automobile companies were young, they all had the same opportunities to grow but the others didn't.

EMD in the 1930s and 1940s was a fine example of the economic concept of "first-mover."

You can tell that Sloan was proud of the company he helped build. Unfortunately, during the 1970s, General Motors' EMD subsidiary lost its imagination and lost its way. Its saving grace for the next 10 years was its Dash 2 technology, which D. S. Neuhart at Union Pacific pushed them into. Union Pacific also lost its imagination and lost its way during the 1970s, after Neuhart retired in late 1971. And in the 30 years following, chasing shareholder value and the goodwill of Wall Street killed many, many companies, changing America into what we have today.