Document MGGLK1K1z0ODkwk16mped1dZa

FILE NAME: Baldwin (BALD) DATE: 0000 DOC#: BALD062 DOCUMENT DESCRIPTION: Book Excerpt - The Baldwin Locomotive Works - The Locomotive Industry THE LOCOS S3 i'M iW u W i y. But locom otives 5,w ith ' 25 tons in i860 to j i tons in 1 in their products, builders in this industry p tra n g overcapacity had to reinvest continuously sim ply to survive, k t jte aw . The *pMsd for capital improvements became increasingly om s.'la tte E P ^ a n d % o s , as locom otives grew in size, w eight, and y. T h e builders required larger shops, more and bigger machine tools, [Heavie^rcrtmes. A s the largest firm in the industry, Baldw in generally led ors in plant expansions. Som e o f the other builders also found the -'for investm ent. Those firm s that did not-- notably Taunton, M ason, __ ^ id e y _ so cm k fcrfieb iess. in dem and, recurring years o f overcapacity, and elevated a l requinaaents created form idable challenges for locom otive builders I i8o to r^oo. Those com panies that surm ounted these problems found fa g k u ty as railway demand for m otive power continued its long-term k T h e num ber o f engines in service in A m erica doubled between 1880 and d 9i Iq the 1880s Baldw in held 31 percent o f the m arket, and it grew to take ^percent dice in the feflow ing decade.98 Baldw in's size and its first-mover 5seem to have made the firm unassailable. 'i n d u s t r y at i t s h e i g h t , 1890-1907 , Baldwin's successes, the 1890s proved a difficult decade for all loco- builders. W ith a prolonged recession follow ing the 1893 panic, the i f s total output for the decade declined slightly com pared w ith the *. T h is unsetdedskuation gave Baldw in and its smaller com petitors an [ incentive to cooperate under the A L M A rather than face the mercurial jffrf H idhidaslly.'W hen the A L M A coEusion ceased is unclear; the last price list k dated February 1897- But its success showed m any builders |a lu e o f concerted action. W ith litde conceivable chance o f im proving their Separately, the largest o f Baldw in's com petitors decided that their main k y in com bination. D uring the great Progressive Era merger movement, fo e com bined in 19 0 1 to create A lco, the Am encan lurive Com pany.97 SSjfen w l com bination o f locom otive buEders had been under considerance a i least 1892.98 T h e principals could not agree then on terms for SgM merger, so they resorted to the A L M A instead. C ollusion was the ;alternative to com bination in response to narrowing profit margins unting capital costs.99 T h e consolidation movement started again j f t L a N ew R iig W financier and industrialist, Joseph H oadky, - ' the Rhode lsland Locom otive W orks.100 U sing a holding com pany, the International Power Company, Hoadley then engineered Alco s formation in 1901. His associates in this venture included a New York investment banker, Pliny Fiske, and a millionaire speculator, Joseph Leiter, who three years earlier had attempted to corner the Chicago wheat market.101 Alco was capitalized at $50 million, and by combining ten previously inde pendent builders, it achieved rough parity with Baldwin's productive capacity.102 Here was a potentially formidable competitor, but Baldwin s partners declined an invitation to join the new combine.103 Although their reasons are unknown, the partners may have understood how the nature o f their business and markets would preclude a successful horizontal combination o f the major locomotive builders. Unlike contemporary mergers o f continuous-process manufacturers such as U.S. Steel and Pittsburgh Plate Glass, which achieved substantial savings through vertical integration, a single great locomotive combine could not achieve noteworthy economies in production, since demand was so variable and engines were built in units or small batches to custom specifications.104 The Baldwin partners understood the limits o f growth in their industry and may have foreseen that one great locomotive combine would only go the way o f American Bicycle, American Shipbuilding, or any other horizontal combination based solely on achieving price dominance. Mostly dismal failures, these combines were unconcerned with, and unable to make, substantial improvements in productivity. Soon new firms entered their markets and undercut their artificially high prices.105 One large locomotive combine would still confront plunges in demand that would greatly tax its ability to service the costs o f consolidation.106 Precisely why Baldwin's partners declined to join the Alco merger is unknown, but these speculations do not seem unwarranted. After 1901 Baldwin's partners confronted a very different competitive situation. American locomotive production reached its all-time high in the first decade o f the twentieth century, but the two oligarchs competed rather vigorously in this expanding market.107 Their highly competitive bidding seems surprising, given that the two firms essentially constituted the indus try. Most likely the dynamic pace o f technical change in locomotives o f the period prevented Baldwin and Alco from reaching an accord on pricing. With the carriers buying more and larger engines, both builders made substantial improvements in plant and equipment to meet the crescendo o f demand in the early 1900s. Thanks to these efforts Baldwin maintained its 39 percent market share o f the previous decade while Alco took 46 percent. In its best year ever, 1906, Baldwin's Broad Street factory turned out 2,666 en gin es-m o re than 8.5 locomotives each working day. To accomplish this feat the plant ran around the clock, with seventeen thousand men working the two shifts. The partners decided, however, that even this performance was insufficient to meet Alco's competition and the railways' requirements for motive power. In THE LOCOMOTIVE INDUSTRY 55 1906 Baldwin began construction o f a new satellite factory in the Philadelphia suburb o f Eddystone. W ith the new plant and its 1909 incorporation, the company increasingly took on the characteristics o f a modern, twentiethcentury industrial firm. Unbeknownst to Baldwin, these preparations for future growth were immediately undercut by the market it had served for almost eighty years. American railway demand for motive power had peaked in 1905.108 Thereafter Baldwin and Alco began a long decline that accelerated in the 1920s and continued until the end o f steam power. They were not alone in their troubles, as much o f the capital equipment sector suffered through the 1920s and the years o f national depression that followed.109 BALD W IN AN D TH E LO CO M O TIVE IN D U STR Y IN T H E N IN ET EEN T H C EN TU RY I f Baldwin increasingly entered on hard times during and after the 1920s, until then it had enjoyed a seventy-five-year ascendancy. Examining the roots o f that durable success underscores particular attributes o f the firm while also delin eating key differences between capital equipment builders and high-volume manufacturers. The contrasts between these two formats in turn demarcate broad and important changes in American industry and society that took place between the builders' heyday in the nineteenth century and the manufacturers' supremacy in the twentieth. The general environment for nineteenth-century capital equipment builders held so many risks and challenges that one marvels at their mere survival, let alone their impressive success in creating the technologies o f industrial society. C h ief among the perils was the bucking demand cycle for expensive capital goods. Every decade saw national recessions that imperiled all locomotive builders. Despite the variability in demand, Baldwin and its competitors had to accumulate sufficient profits to make the heavy investments in plant and equip ment necessary for building such complex mechanisms. Before making engines, let alone profits, the builders also had to sell their products to customers across the nation and around the world. And by the 1870s the locomotive makers had lost the design initiative in their own product lines to their customers, yet they still competed among themselves on a variety o f levels. T he industry responded to such challenges with a range o f policies that allowed many firms to survive, and some to prosper at times. All locomotive builders sought to yoke themselves and their operations closely to the needs o f American railways. When the carriers boomed, the builders at least did all right. A nd when the railroads deserted the market, locomotive makers learned to act collectively, holding up prices to allow profits sufficient to survive the dry spell. To meet the railways' need for custom locomotives, the builders drew upon the extensive skills o f workforces that were the chief assets o f such industrial THE BALDW IN LOCOM OTIVE W ORKS districts as Bush Hill and Paterson. The ready availability o f such skills allowed Baldwin in particular to broaden its product lines and markets. The Philadel phia builder survived market reversals and achieved its growth by fulfilling extensive demand, making engines in countless designs for customers in a variety o f industries all over the world. Antithetical to the manufacturers' use o f standard products to exploit intensive demand, this strategy nonetheless proved viable for almost a century, until America had evolved from an industrializing, producer-driven economy to a mature and consumer-oriented society. Mass-production manufacturing, with its attendant revolutions in distri bution and management, was taken up with fervor by American industry by the 1910s. Thereafter the capital equipment firms and their machinery-building techniques waned in importance. In the 1930s General Motors would even bring rigid standardization and manufacturing methods to the locomotive industry. That it would do so successfully would have astounded Baldwin's nineteenth-century partners. For eighty years their company's growth had been based on the strategy o f building whatever the customer required. Baldwin geared its internal operations and marketing tactics entirely to that end. The character o f technical change in steam locomotives explains why Baldwin was impelled to develop this capacity to meet its customers design needs. 3 TH E CH ARACTER IN L O C O M O T I V E OF I N N O V A T I O N D ESIG N N ineteenth-century com m entators and m o dern-day historians have written at length about the determined efforts o f railroad managers to stan dardize the "terrr inology, measurements, parts, tools, and other equipment used on their svs' ems during and after the Gilded Age. Alfred Chandler asserts that cooperation "to promote standardization o f equipment and operating procedures" was .1 "central theme" o f American railroading during the 1860s and i8~os.; The oeriod saw interfirm agreements on such technologies as standard track g: uges, car couplers, car wheel patterns, and axle dimensions ^ that unified the hundreds o f individual railroads into a national system carrying through freight and passenger traffic across a number o f different lines. A chief agencv in mis standardizing mission was the American Railway Master Mechanics Association. Created in 1868, the Master Mechanics Association devoted most of its consultative efforts to locomotive design, use, and repairn In an 1874 speech to its annual convention, the noted mechanical engineer Coleman Sellers exclaimed that "the primary object o f this Association may almost be said to fbe to] introduce uniformity in all parts o f the great railroad svstem of the U nted States. 3 Despite Sellers's fervor for the standardizing mission o f the association, and despite the general truth o f Chandler's portrait o f systematization, the master mechanics then selves largely resisted extending national standards to steam locomotives. Contrast Sellers's remarks with an 1899 address to the association by Joseph Brvan, the president o f the Richmond Locomotive Works. Bryan opened his speech by quoting from an English newspaper that had asserted that U.S. locomotive makers built only standard designs. In response he exclaimed, " Think o f that will you! Think o f that, O you master mechanics, who cudgel your brains to find new designs and who for ten years have been changing your "tvpes o f engine; so rapidly as to make the poor manufacturer's head swim. . . . THE BALDWIN LOCOMOTIVE WORKS It sounds like a roaring farce.'' 1 Bryan went on to plead tor stain, ard designs, noting "what a comfort it would be to the builder to . . . build < imetning lahad seen or heard of before. What an avoidance of useless exper e aiul the assurance of better deliveries.' Although his remarks were somewhat hyperbolic -- as were S.llers s Brvan accurately characterized the master mechanics' influence :'. innoy.umn. Throughout the history o f steam locomotives, standard designs . irgch pros ed, an unpopular and ill-fitted concept. Railway master mechanics prevents: tinlocomotive builders from establishing national standards tor uc on a num.lvr of lines, and within a given road standard designs were generally short-lived best. One kev factor that allowed for diversity in locomotives w, s slut, imbue cars, they seldom traveled beyond the tracks of their own roads. But the ..uncifor it are rooted in larger issues, and the reasons for this consume csoiiui m. .me, endless variety in locomotives are worth examining in detail. Master mechanics had a variety of motives for opposing standards .me promoting diversity in locomotive design, but their main mitim r. n m m ..tilled. Standards blocked progress. Over the nineteenth, cer.tur. Ann: . o', railways saw astronomical growth in the volume of Weight anu ; i,.,e:.:nr men. moving through their lines. I he railways carried that imirCen b-, achieving Jvnamie improvements in productivity, running more trait.. ,m ; e.pc.a, u. 'newer trains --faster, longer, and heavier than ever before.' Mic! train.- twit;ire.: more powerful locomotives with even' decade, so continuous w ilutiou r ucC locomotive design, rather than a standard, unchanging techno:, gvf i >cugn change was also fostered bv railw.ms competing among tiiemsei es to: tr.utu. win g to offer better efficiency and productivity. Some carriers a temptea! u establish standard engine designs, "hut in every instance these :. i\c given v.v:\ to die urgency of keeping pace with tuber mads which have no atrentptvd to bind themselves with the iron bands of standardization. The character of innovation in locomotive design was a ertu .,! nuie tor Baldwin and the other builders and is examined here in detail. vs Brvat' . remarks indicate, the builders had little control over the design evolution of their major products, engines for mainline railroads. How at J win did thev lose the initiative in design to the master mechanics? Hies, important questions have ramifications veil bevond steam locomotives. R. llwav car makers, shipbuilders, machine tool firms, and most other make s of large capital goods also served customers who largely defined the pac. and direction of technological change in their products. The custom characte: of most capita equipment marked the most crucial difference between builder- and massproduction manufacturers o f machinery. The continuous desig: evolution in heavy machinery meant that its builders had to utilize different marketing techniques, production tooling, and labor skills compared with die method-, ot INNOVATION IN LO COM O TIVE DESIGN 59 high-volume manuracturers. Because the sources and character of innovation in locomotive design had such vital ramifications for Baldwin's operations, the subject merits detailed consideration. Builders such as Baldwin, however, were far from powerless on matters o f design. Lnlike volume manufacturers, which worked up complete product designs and then anxiously hoped for their acceptance in the marketplace, c.ipital goods builders like Baldwin often responded to their customers' specifications in a process o f design mediation between buyer and seller. Such discussions were essential to both parties, since the locomotive builder had to give tangible reality to the master mechanics' design initiatives.8 Even in cases where the customer provided complete p lan s-rath er than general specifications for .1 new locomotive, Baldwin retained some autonomy in deciding how to bu .d the engine. Such mediation o f ends and means was a crucial attribute in Baldwin's market and business success after the Civil War. But first we must turn to the prewar period to understand how and why the . lO.omotne builders lost the initiative in the evolution o f locomotive design. EARLY AMERICAN' LOCOMOTIVE TECHNOLOGY LXD TH E Q UESTION OF PATENTS 1 ue earliest American locomotives were either English imports or Americannuilt copies o f Engl sh designs, such as Baldwin's Old Ironsides. But American -ngineers soon adapted these designs to suit the lightweight track, rough -oadbeds, and mam curves common to railways in this countrv. In 1832 John etc is introduced his leading truck, which guided locomotives through curves and thereby helped prevent derailments. Jervis did not patent this important rnprovement, and ether builders quickly copied his invention, including Matthias Baldwin. The next innovation of importance to the long-term development o f locomotives sought -o increase the power the cylinders transmitted to the rails. La.lt engines, such as that shown on page 7, had only one set o f driving wheels li.e., wheels driven bv the cylinders). With heavy trains or on steep grades, these v. heels would lose their traction on the rail and spin uselessly. The remedy was ta add another set ot drivers and connect the two sets so that the cylinders would transmit powvr to four points on the rails instead o f just two. Henry Campbell, a Philadelphia mechanical engineer and close friend o f Matthias Baldwin, patented this 4-4-0 type in 1836.9 Such an engine is shown on cage 60. The crucial invention here was not merely the second pair o f drivers; successful 4-4-0 designs also incorporated a new form o f suspension, the equalizer, patented ir. 1838 by another Philadelphia locomotive builder, Joseph Harrison Jr., an acquaintance o f Campbell's and Baldwin's. One o f his patent THE BALDWIN LOCOMOTIVE WORKS drawings for the equalizer is shown on page 61. Harrison's device proved very important; it allowed the transition from the early 4-2-0 type to the 4-4-0, and few, i f any, American locomotives were built without equalizers after 1840. 10 Hindsight tells us that the American steam locomotive had acquired all its essential attributes by 1838, although further refinements continued for over a century. English contributions to the basic design included the horizontal firetube boiler, forced draft, semihorizontal cylinders, and power transmission from cylinders to wheels using direct connecting rods. The chief Am erican additions were the Jervis truck and the Harrison equalizer, the latter allowing multiple driving axles. All these attributes remained in American steam locomotives until their demise in the 1950s. Significandy, o f all the English and American inven tors, only Campbell and Harrison patented their improvements, and they made their innovations available to all who would pay the royalties.11 Therefore no locomotive builder controlled key patents in a way that could have prevented others from entering the field. This contributed to the competitive vitality o f the antebellum locomotive industry. And the fact that no builder held an essential technological advantage in patents enhanced the master mechanics' ability to influence design matters during and after the 1850s. This technically unfettered situation becomes apparent only with hindsight, however. The path locomotive development took during and after the 1850s was hardly discernible in the 1840s, when radically different designs competed for acceptance. Perhaps because so many basic attributes o f locomotives were Baldwin built this four-drivered engine for the Havana Bay and Matanzas Railroad early in 1861. Through driving rods the cylinders turn the front drivers, while connecting rods transmit some o f this power from the front to the back drivers. This 4-4-0 was built for a Cuban line, and such exported products typically had a higher level o f finish work than domestic locomotives--evident in the varnished wood cab and polished brass cylinder jackets, railroad m useum of Pen nsylvan ia (pm h c)