Like I warned you, fair readers, I cover everything from bicycles to trains here-
First off, a bit o’ historic background is in order- Back in the 1920s GM bought out Winton and their two stroke diesels and like they did back then, invested serious money in the company. By the late 1930s this resulted in the development of two stroke supercharged diesel engines great and small- The Detroit Diesel for trucks and the “Cleveland” diesel for GM’s locomotives. These came to be know as “EMD” locomotives, short for the GM “Electro Motive Division” that built them. EMD had competitors- steam locomotive builders like Baldwin and Alco did not give up without a fight, and developed their own diesel locomotives as a hedge against wholesale abandonment of the steam locomotive.
EMD went on to produce a series of hits- the E and F model streamliners, and the GP and SD freight locomotives. By the late 1960s EMD dominated the market and Baldwin and Alco had given up. EMD was an industrial tour de force, with a massive plant in LaGrange, Illinois that came to be know as the “home of the diesel locomotive” and made virtually the entire locomotive there.
General Electric had dabbled in locomotives a bit, building small “box cab” powered boxcars and supplying electrical parts to Alco. With the demise of Alco, GE entered the locomotive market right at EMD’s peak with more a belly flop than a splash. GE locomotives then were generally considered to be inferior in every way to the EMD products and rather unreliable. But GE locomotives were cheap and it seemed they’d give easy credit to anyone- amazing the number of railroads that went bankrupt with a fleet of new GE locomotives on their rails…
By the 1980s the glory days of the railroads were over, with so many bankruptcies that the future of the very industry was in doubt. As one would expect, the market for new locomotives crashed. GM’s EMD responded by shutting down the half of the LaGrange plant that assembled their locomotives, moving production to a smaller facility in London, Ontario and outsourcing more of their parts. Meanwhile, GE kept plugging along and improving their product. Come the 1990s and the railroads recovered, grew, and started buying new locomotives again. EMD’s little London plant couldn’t keep up and assembly was outsourced- Conrail even had to assemble some engines themselves to get new EMD locomotives. Production shifted to odd places like Mexico, and EMD’s quality suffered.
Meanwhile, GE just kept quietly improving there product, and by the turn of the century the major freight railroads were splitting their new locomotive purchases between GE and EMD. GE scored a coup in winning almost all of Amtrak’s orders, even though their “Genesis” passenger locomotive was less reliable than the EMD F40 that it replaced. In the new century, railroads increasingly preferred GE’s better fuel economy and reliability over EMD’s offerings, and GE passed EMD in sales. Granted, GE’s locomotives with their computer controls weren’t always popular with locomotive engineers, but as always GE plugged away and improved the product with software upgrades. GM responded by putting EMD up for sale…
Which resulted in an outfit called Progress Rail or something like that swallowing EMD, and then no doubt turning a tidy profit selling themselves to Caterpillar. Yup, the company that couldn’t come up with an EPA 2007 legal engine, never mind EPA2010, now owns (formerly) legendary EMD!
And of course, CAT did what CAT always seem to do these days, outsource or relocate or out and out “badge engineer” somebody else’s product with a CAT logo. So CAT built a whole new plant in Muncie, Indiana and hired a bunch of newbies to build their (formerly) legendary EMD locomotives. Now you can probably train monkeys and certainly some pretty dumb humans to build cars where all they have to do is snap part “A” onto part “B”, but with locomotives it’s different… The whole market is only a couple thousand in a good year, and the railroads tend to want a lot of custom features. That means that locomotive building is not a job for any idiot that will work cheap. Ignoring that fact, CAT closed the London plant with it’s experienced workers, replacing them with newbies at half the pay in their new Muncie plant.
That’s probably just the beginning… CAT PR is babbling about a CAT engined EMD locomotive… Heads up, LaGrange EMD workers. The CAT engined EMD has been tried before, and it was a flop even though CAT practically gave them free engines. And the locomotive version of EPA 2007 and 2010 is coming, and the company that couldn’t meet the EPA truck regulations now has to meet similar EPA locomotive regulations? Hopefully, EMD LaGrange developed an EPA compliant EMD engine before CAT took over.
So in the locomotive division, EMD has now decisively won the race to the bottom. Meanwhile, GE just keeps pluggin’ along with the same experienced workers in the same Erie plant they’ve been in for decades, improving the product…
GearheadGrrrl 
CAT EMD’s? (head hung in shame)
CAT-badge-engineered IH trucks? What the h===?
“Starage days indeed, mama. Strange indeed.”
Good to see you back on ATHS forum, Diana. However, HQ is racing it towards the bottom, as well. Unreal.
Whoever wrote this article is totally ignorant to the rail industry. Anyone who reads this and takes as gospel is as ignorant as the author. As with anything a person should be informed prior to informing others.
OK, so what is the real story then? Or at least where can I go to read it??
First — Caterpillar bought Progress Rail before they bought EMD and made them a division, subsidiary, what have you of Progress Rail.
Second — GE was already eating EMD’s breakfast and lunch by the late 80’s. Dinner came along at the latest by the mid 90’s.
Third — GE had a better cost control over their product with less overhead and a better labor agreement.
Fourth — GE was not afraid to build things cheap (thinner steel, less esoteric designs) than EMD. They were like the Russians — cheap and plentiful could overcome costly design for reliability and scarce availability. Railroads are feast and famine. When they want product they want it now, not a few years down the road. GE made capacity when EMD couldn’t deliver after the downsizing EMD started in the 70’s.
Fifth — GE’s top management made sure their capital arm GE Finance was onboard making sweet deals to get orders whereas GMAC continued to run as its own entity.
Sixth — There is some talk in the industry that GE under priced their initial product (the locomotive) to make up profit on overpriced parts for repair. The joke was that this built in profit to be sure the locomotives buyers were repeat customers.
Seventh — GE was much better schmoozing the customer that EMD which had to get over the attitude of dominating the market for such a long time. (I believe that the GE chairman also personally dealt with Tom Downs of Amtrak, something the GM chairman never did.)
Eighth — Caterpillar wanted into EMD’s shorts for a long time but EMD never would consort with Caterpillar. The earlier tries at re-powering locomotives with CAT engines were all done in cooperation with railroads and without EMD’s help. EMD’s two-stroke engine is a beautiful piece of machinery with a quick response not achievable in any great measure by a four stroke engine. And yes, despite doubts EMD has been able to make it tier emissions compatible to this point. The engine was always a great profit area for EMD.
Ninth — GM corporate for a long time was sucking money out of EMD to help maintain their auto divisions which were hemorraging money in the mid 70’s. GE was building up their locomotive division at the same time GM was pilfering from their own.
Don’t get me wrong, the GE product will pull the trains — for maybe 15 years before being replaced. EMD Locomotives used to be designed such that a reliably designed locomotive would last for up to 40 years. But in these days of changing EPA, FRA and fuel economy constraints the railroads realize that they probably won’t have the locomotives in their stable for more than 20 years. Making matters worse EMD stuck their feet in the bear traps when they tried to better control their costs, cheapen the locomotive to manufacture and rush new technologies to market and thus badly damaged their reliability credibility. Their current locomotive the SD70Ace is a tour de force, but is it good enough to recover lost market share? GE has continually upped their game as the author has correctly pointed out. The two products, each with their own strengths and weaknesses are probably a close match and may now be perceived as commodity items. That is — may the best price win. We shall see what EMD can now do with the support of a strong corporation instead of a leach.
Incidentally, Caterpillar is always looking for markets for their engines, but now that they own the EMD engine they would be very foolish to disregard or dispose off it.
Jason (above) has this about right. To this day EMD locomotives are still considered to be world class in several key areas, like their 3-axle steerable trucks among others. This article is basically a hatchet job on EMD. I would have dumped the London site too if I were EMD. The workforce there simply priced themselves out of a job. It is difficult to see why EMD should be cast in such a derisive light for choosing to make their product in Indiana. Is there some particular reason that most of us do not know about why they should be ashamed to carry out manufacturing work in the US? And if Caterpillar saw EMD’s engine technology as an excellent reason to purchase the business, this will only strengthen their lineup in larger capacity engines. Anybody who is making a substantial effort to improve a US product line that is already world-class in many ways deserves our respect. Their sales numbers indicate that they already have the respect of railroads large and small here in the US and of many around the world including Europe, the Middle East, Asia (China), and Australia. In most of these places the railroads in question have many choices that are significantly less expensive than an American product like EMD’s so they clearly feel that EMD makes something good enough to be worth paying a lot more to get.
Very thought out responses from Locomania & Alex Pallenberg . I will be watching the fortunes of both companies as they compete in the locomotive market. It is hard to believe that after dominating the diesel electric engine market with such superior products for over 5 decades that now EMD has fallen on such hard times. Baldwin, Alco, & Lima all entered the diesel electric market only to fall short of EMD’s product line. This was mainly due to reliability issues more than anything else. This heritage must account for something.