P.O. Box 420
Indianapolis, Indiana 46206-0420
Telephone: (317) 230-2000
Fax: (317) 230-3562
Wholly owned subsidiary of General Motors Corporation
Incorporated: 1915 as the Indianapolis Speedway Team Company
Sales: $820 million
SICs: 3724 Aircraft Engines & Engine Parts; 3511 Turbines & Turbine Generator Sets
The Allison Gas Turbine Division of the General Motors Corporation is one of the largest manufacturers of aircraft engines for medium-sized aircraft. While not as large as companies like Pratt & Whitney, Rolls-Royce, or General Electric, Allison has played an important role in the development of aviation. Its engines have been found on aircraft including the Lockheed P-38, C-130 Hercules, Curtiss P-40, Lockheed F-94, and Convair 580.
The company's founder, James A. Allison, was born in Michigan in 1872. After growing up in Indiana, he made the acquaintance of a bicycle manufacturer-turned-automobile-salesman named Carl Fisher. In 1904 the two established a small agency for marketing concentrated acetylene gas. Despite frequent explosions, acetylene was extremely popular among the growing number of automobile manufacturers in and around Indianapolis, who used the gas to fuel their headlamps. Allison and Fisher changed the name of the company in 1906 to Prest-O-Lite, after their product's ability to light quickly.
Allison developed an active interest in automobiles and in 1909 purchased $72,000 worth of farmland, where he established the Indianapolis Motor Speedway Company. Allison held his first 500-mile race at this track in 1911. Allison was later persuaded to establish his own racing team, and in 1915 he incorporated an automobile shop called the Indianapolis Speedway Team Company. Allison funded the shop with his substantial profits from Prest-O-Lite.
In 1914 Prest-O-Lite Co., Inc., hired Dr. George Curme to develop a synthetic alternative to acetylene that was less prone to explode. In the course of his work, he consulted with engineers at Prest-O-Lite's main competitors, Linde and Union Carbide. Allison and Fisher later sold a controlling interest in Prest-O-Lite to Union Carbide, but retained large interests in both firms. Meanwhile, in 1920, Curme's team stumbled upon ethylene glycol, which Union Carbide marketed as a radiator coolant called Prestone.
When the United States entered World War I in April 1917, Allison volunteered the use of his growing Speedway company for the manufacture of military hardware. Due to its experience with automotive products, the company was assigned contracts to build tractors, tanks, superchargers, and, most importantly, Liberty aircraft engines. These 12-cylinder water-cooled behemoths were unsuitable for the light aircraft then being built, but served to establish Allison's name among the members of the government's Aircraft Production Board. After the war Allison sold all his racing interests and moved to Florida, where he became an important figure in local society. While active in real estate and charitable causes, he remained committed to building a better aircraft engine.
In the process of building a derivative of the Liberty for marine propulsion, Allison discovered a way to improve the Liberty's crankshaft and rod bearings, which frequently failed. In 1920 he established a new company for this business called the Engineering Company. Allison won a contract to retrofit the army's stock of the engines, and during the 1920s the bearing business contributed a major portion of the company's receipts. Allison later sold bearings to Wright Aeronautical and Rolls-Royce.
From his experience with the Liberty, Allison discovered a fundamental problem with aircraft power plants, in that engines operated more efficiently at significantly higher speeds than propellers. The solution lay in a reduction gear; however, machining such a gear proved extremely difficult, since the slightest inaccuracy in alignment would pit or completely shred the teeth off the gear. Allison eventually perfected a two-speed reduction gear, and sold it as an adjunct to the Liberty and to newer engines built by Wright and Curtiss. The company also built superchargers, which enable engines to operate more efficiently by compressing the air drawn into an engine's cylinders.
After Allison died of pneumonia in 1928, the company's chief engineer, Norman Gilman, decided to put the company up for sale. Offers from Wright and Consolidated Aircraft were rejected because they merely planned to close the business after raiding it of its patents and engineers. Gilman agreed to an offer from the Detroit-based Fisher & Company. Ninety days later, Fisher's parent company, General Motors, took direct control of the enterprise.
The acquisition of Allison was just one part of a grander scheme by GM President Alfred P. Sloan. Ever since Charles Lindbergh's triumphant flight across the Atlantic in 1927, investors had poured millions of dollars into aviation stocks. Huge vertical monopolies were being formed, and Sloan decided that GM should have a place in this new transportation industry.
In 1929 General Motors established large or controlling interests in Bendix Aviation, the Fokker Aircraft Corporation of America, General Aviation, North American Aviation, Eastern Air Transport (Eastern Airlines), and Transcontinental Air Transport and Western Air Express (which became TWA). In Allison, General Motors had an experienced engineering firm with an important new engine, an 800-horsepower design called the V1710, under development.
A significant improvement over the Liberty, the V1710 entered the market at the worst time. The stock market had collapsed, and both Wright and Pratt & Whitney had entered the market with lighter air-cooled engines. Gilman decided to upgrade the engine with a supercharger, but the conversion took nearly seven years and was punctuated with numerous failures. Meanwhile, the Wright Cyclone and Pratt & Whitney Wasp gained a stranglehold on the market. Nevertheless, during the period that the V1710 was being altered, the engine was tested on a number of experimental aircraft, including the Curtiss XP-37 and Bell XFM-1 Airacuda. By 1939 the engine had won a place on the Lockheed P-38 and Curtiss P-40.
In Europe, meanwhile, the French and British had begun a massive armament program to counter the growing military power of Germany. Having outstripped their own manufacturers' ability to supply aircraft, they placed tremendous numbers of orders with American companies. Boosted by this demand, Allison had orders for more than 4,000 V1710s by May of 1940.
General Motors knew that additional orders for the V1710 would soon come from the U.S. War Department. It wisely transformed Allison into an engineering shop, under the assumption that its engines could be manufactured by its other subsidiaries, Chevrolet, New Departure, Hyatt Bearing, AC, Delco, Packard, Antioch, Harrison, and Inland.
Allison turned out 48 V1710s in 1939, a number that climbed to 6,433 in 1941. During the same period, employment grew from 600 to 4,000. By 1942, after the United States became directly involved in World War II, Allison built several new plants and began a scramble to recruit and train qualified workers. While the United Auto Workers had won the right to represent workers in other GM divisions during the 1930s, it was unable to organize Allison until 1943, when the company's payroll exceeded 23,000 employees.
Drawing on its parent company's experience with mass production, Allison managed to speed the production of V1710s by reducing the number of separate components from 7,000 parts to just 700. The company also completed a larger 2,000-horsepower engine called the V3420. This engine powered B-19 and B-39 bombers, as well as a number of PT boats. By April 1945, the month that the government cancelled all future orders with Allison, the company had supplied engines for more than 10,000 P-38s and nearly 18,000 P-40s. All that remained was the grim task of laying off 90 percent of the work force and converting back to a peacetime economy.
Alfred Sloan established a postwar plan for GM's aviation interests as early as 1942. When the time came to act on it, Sloan decided that Allison would suffer if GM were to manufacture aircraft in competition with its division's customers. As a result, GM divested all of its aviation companies, including the airline companies, Bendix and North American. Fisher Aircraft personnel were transferred to Allison. Sloan had not counted on labor action in relation to the wartime wage freezes. The UAW struck GM--and Allison--for five months until March 1946. While it may have been devastated by the peace, Allison emerged from the war with experience in an important new product, the jet engine.
When the British came to the United States shopping for aircraft in 1940, they were also looking for a company that could develop a gas turbine designed by the British inventor Frank Whittle. The War Department awarded funding only to Westinghouse, General Electric, and Allis Chalmers, because they had experience with steam turbines and presumably would provide no competition to Rolls-Royce after the war.
But because General Electric lacked the resources to turn out the huge number of jet engines forecast, it enlisted Allison as a manufacturer. The war ended before GE could get a jet engine into production, but it maintained its subcontracting arrangement with Allison.
During the late 1940s, Lockheed, Grumman, and Martin built a series of aircraft that used a total of 15,525 GE-designed, Allison-built J33 jet engines. When Allison was asked to build GE's new J35, it was so busy that it had to pass the work on to Chevrolet. By the time General Electric had developed its J47, the government had terminated its wartime industrial coordination responsibilities. Fearful of turning General Motors into a competitor, GE canceled its partnership agreement with Allison.
Allison began development of a more powerful J71 jet engine with the same dimensions as the J35, hoping to win retrofit as well as new business. But while Allison jet engines saw a great deal of action in Korea, America's first jet war, the company accepted the military's request for new turboprop engines. The move would put Allison in third place behind General Electric and Pratt & Whitney (which acquired Westinghouse's licenses), but it would also guarantee Allison a leading position in the turboprop market.
The company developed two designs, the T38 and T40, that were jet-powered propeller engines. Enormously complex, they provided the power and fuel efficiency to drive large aircraft, such as cargo planes and, more importantly, the new generation of big airliners. Able to drive two counter-rotating propellers, the T40 appeared on numerous experimental aircraft, including the Convair XP5Y and XFY-1 "Pogo Stick," a vertical take-off and landing aircraft. For commercial markets, Allison built a T38 derivative called the T56. This model was standard on a variety of Lockheed aircraft, including the L-188 Electra and Convair 340, 440, and 580.
With jet engines, Allison's J71 won a place on the Lockheed F-94, and was tested on several other models. But by 1955, General Electric and Pratt & Whitney had achieved an insurmountable lead in powering bombers and new jetliners, such as the Boeing 707 and Douglas DC-8.
Allison gained a leading position in helicopter propulsion in 1958, when it was chosen to power the army's LPH reconnaissance vehicle. The company built nearly 4,000 T65 turboshafts for Hughes and Bell helicopters during the mid 1960s.
Meanwhile, Rolls-Royce, which hoped to gain a larger share of the American market, suggested a manufacturing partnership with Allision. The two companies decided to adapt the Rolls-Royce Spey engine into a new engine for Boeing's new 727 jetliner. However, the AR963 engine they built lost out to Pratt & Whitney's JT8D, mainly because Eddie Rickenbacker&mdash′esident of launch customer Eastern Airlines--knew Pratt & Whitney's management personally.
Allison and Rolls-Royce got a second shot at a successful partnership when the air force asked that the Spey be built to military specifications for the Vought A-7 Corsair. The second derivative, the TF41, made it into the air. But by 1970, cracks in the turbine's spacer rings were shown to be the cause of several A-7 crashes. The problem was quickly resolved, but not without expense to Allison's reputation. Allison lost its momentum in the jet engine market, not because of its problems with the TF41, but because it had no engine ready to follow it.
Rolls-Royce asked to participate in the development of Allison's new RB211 turbofan in 1966. However, Allison backed out of the deal because it couldn't resolve the cost projections. Five years later, problems with the RB211 plunged Rolls-Royce into bankruptcy and nearly ruined its main customer, Lockheed.
Allison, it seemed, was destined to stay in the turboprop business. But the company's main commercial customers, Convair and Lockheed, lost their market to Boeing and Douglas jetliners. All that remained was the cargo and military business.
The T56 engine powered a growing number of C-130 Hercules cargo planes and P-3 Orion and Grumman E-2 reconnaissance craft. To keep this business, Allison borrowed a practice from GM EMD railroad locomotive division. The company routinely overhauled its engines to spot and correct problems and keep track of their performance. This not only kept the engines in the air, it also greatly enhanced customer satisfaction.
From its experience powering the Regulus, Snark, Matador, and Mace missiles during the 1950s, Allison bid successfully to build a rocket casing for the Thiokol Minuteman missile. This work later earned the company a position in the Apollo space program, building propulsion components.
On September 1, 1970, GM Chairman James M. Roche announced the merger of Allison and Detroit Diesel, a manufacturer of large engines that was in need of Allison's excess factory space. Allison, it was thought, was in rapid decline and would benefit from a consolidation.
The new Detroit Diesel Allison Division (DDAD) was given responsibility for developing a roadworthy gas turbine intended to compete with conventional truck engines. GM hoped the project, which dated back to 1958, would create a greater cohesion in the division. But when the Arab oil embargo of 1973-74 rendered gas-guzzling, jet-powered trucks obsolete, the project's GT404 engine was converted for military use.
The oil crisis created a massive new market for oil field helicopter services, as domestic oil exploration went into high gear. At one point, DDAD was building 2,000 250-T63 derivatives a year. This production greatly bolstered the company's position in the helicopter engine market. In a competition to build engines for the new Boeing Vertol heavy lift helicopter in 1973, DDAD defeated General Electric.
Despite this business, DDAD continued to decline. General Motors' prejudice toward automobiles and its resistance to increasingly costly research and development over a period of 20 years badly eroded the group's position. The merger of Allison and Detroit Diesel created few synergisms. Deep divisions remained as employees in both organizations resisted the combination.
In 1981 GM broached the idea of selling DDAD to Garrett AiResearch. Disinterested, Garrett bid too low. But six other suitors lined up, including United Technologies, TRW, and Rolls-Royce. A consulting group suggested that GM could revive the group if it merely put someone in charge who knew the turbine business. Dissatisfied with the offers it was receiving, GM drafted Blake Wallace, a veteran of Garrett, General Electric, and Pratt & Whitney, to run DDAD.
Wallace declared that the division would only succeed if it chose to excel in its current markets and get back into the commercial and military markets it had allowed to slip away. He resolved to boost investment in research and development and product support, modernize operations, and bolster the marketing organization. Finally, he tackled Allison's unfortunate relationship with Detroit Diesel by splitting the organization back in two in May 1983.
The first market tackled by the newly independent Allison was its money-spinning mainstay, helicopters. The company developed a series of upgraded derivatives of its 250 engine for Bell, Augusta, McDonnell Douglas, and even the Soviet manufacturer Kasmarov. Allison also built a new T406 turboprop for the navy's tiltrotor V-22 Osprey, and won new sales of its 501 gas turbines for jet boats and other marine applications.
In an effort to get back into the commercial transport business, Allison formed a partnership with arch rival Pratt & Whitney to develop a jet-powered propeller engine called a propfan. Allison's experience with counter-rotating propeller systems was essential to the project. But while the highly efficient engine worked, the market for propfans disappeared when airline companies' acquisition budgets evaporated and fuel prices plummeted.
In October 1988 Allison and Garrett were selected to develop engines for a new light helicopter. The two companies produced the T800 engine. While successful, the engine's sales prospects were hurt by military budget cuts. Allison had a second go at commercial markets in 1989, when GMA 2100 turboprop was selected to power the Saab 2000 airliner. The engine, which drove six-bladed propellers like the propfan, was a direct outgrowth of the earlier project.
Blake Wallace's remake of Allison placed the company on much more solid ground. But as General Motors struggled to stave off market share losses in its automobile business, the parent company elected to spin off those companies that were not immediately related to the core business.
Despite tremendous investments in Allison and the company's good prospects, GM decided in 1992 to put Allison back on the auction block. The substantial sums GM had spent reviving Allison, it was thought, would be favorably reflected in the company's purchase price. By late 1993, however, no buyer had been found.
Kaplan, Ellen, ed., In the Company of Eagles, Stanford, Connecticut: Pratt & Whitney, 1990.
Mattera, Philip, Inside U.S. Business: A Concise Encyclopedia of Leading Industries, Homewood, Illinois: Dow Jones-Irwin, 1987.
Propulsion, Cincinnati, Ohio: GE Aircraft Engines, 1991.
Sonnenberg, Paul, and William Schoneberger, Power of Excellence, Malibu, California: Coastline Publishers, 1990.
Source: International Directory of Company Histories, Vol. 9. St. James Press, 1994.