Allis-Chalmers, Factories

There and Gone: The Short History of the Allis-Chalmers Terre Haute Works -Part I

Terre Haute Works circa 1960 (Courtesy of the Milwaukee County Historical Society)

The Allis-Chalmers Corporation was once a leader in the American industrial scene. The company is probably most known for its iconic Persian Orange colored farm equipment, but that was just one speck of the more extensive line of precision machinery it made in its long history. Based in West Allis, Wisconsin, a suburb of Milwaukee, the company had manufacturing facilities all over the world and employed thousands of people. One of many specialty facilities Allis-Chalmers operated was in Terre Haute, Indiana, about eighty miles southwest of Indianapolis.

The company’s Terre Haute Works was erected in 1952 and launched Allis-Chalmers into a new line of jet propulsion engine components for its defense contracts. However, the Terre Haute Works only manufactured jet engine components for a few years, and then the facility was retooled and expanded in the mid-1950s to manufacture electrical equipment. By 1962, just barely a decade of operation, the upper echelons of Allis-Chalmers unexpectedly announced the closure of the facility to consolidate manufacturing between its other facilities.

What led Allis-Chalmers to shutter a $25 million state-of-the-art facility in as little as ten years? There are several instances of blame being placed on the union that represented the workers there. This stems from the events of 1952 when the union voted to strike at Terre Haute while the plant was under construction. Several other strikes over the years held up production as well. Allis-Chalmers was no stranger to labor strife. A year-long showdown with shop unions occurred from 1946-47 that proved costly for both parties.

On the office end, management did not always conduct business with veracity. Some of the Allis Chalmers Power Equipment Divison management team was exposed in a price-fixing conspiracy with other notable firms in 1961. General Electric, Westinghouse, and Allis-Chalmers, as well as some smaller companies, worked together to control the volatile electrical equipment market. It was discovered that the illegal activity stretched back several years. A few of the product lines involved in the scandal were those coming off of the Terre Haute Works production line.

The untimely closure of the Terre Haute Works is linked to several factors, both in and out of the company’s control. Labor disputes, politics, economics, and scandal struck at the most inopportune time. However, it was the combination of all of these within the span of a decade that doomed the facility. A case of bad timing and bad luck. Executives of the company saw an opportunity to expand the product line and made an investment in a new facility. They even tried to transition to something else when the original plan failed, but it never panned out. Sadly, people lost their jobs or had to relocate to a different company plant. The city of Terre Haute lost a prominent manufacturer that promised thousands of jobs that it fell short of delivering on. Allis-Chalmers continued to manufacture and sell a wide variety of products all over the world for another two-and-a-half decades. The once mighty Allis-Chalmers was struck by bad luck again in the 1980s which cost the company its existence.

Terre Haute Welcomes Allis-Chalmers

The origins of the company’s manufacturing facility at Terre Haute stemmed from Allis-Chalmers’ involvement in manufacturing aeronautic components during World War II. In addition to building superchargers for aircraft, Allis Chalmers was contracted by the Navy to build a prototype fan-ducted aircraft engine in February 1942. Production of the engine was so sluggish that the Navy canceled the contract in the summer of 1943 with no units delivered. In December of that year, Allis-Chalmers received a production license to manufacture the British-designed De Havilland H-1 Goblin jet propulsion engine–given the designation J36.

The J36 engine was intended for Lockheed’s new XP-80 fighter aircraft–America’s first turbojet-powered fighter. In the end, the J36 was dropped in favor of General Electric’s more powerful I-40 jet engine. The J36 was equipped on the Curtiss XF15C and Grumman XTBF3-1 for test flights but neither went into production. Again, Allis-Chalmers had issues getting production rolling on the engine. The Navy ordered forty J36 engines from Allis-Chalmers but only seven were delivered by the time the contract was canceled a few years later.

In spite of its first two attempts at jet engine production falling flat, Allis-Chalmers was not throwing in the towel on aeronautics. The company was a major supplier of war materiel during World War II. By 1950 America became involved in the conflict in Korea which helped Allis-Chalmers secure more defense contracts. Additionally, aircraft companies were looking for reputable manufacturers to help build components for American turbojet fighters. Aircraft manufacturer Curtiss-Wright announced in April 1951 that it would subcontract Allis-Chalmers to build compressors for its J65 Sapphire turbojet engine. Shortly after the Curtiss-Wright deal, Allis-Chalmers announced it was building a $10 million* facility near the city of Terre Haute, Indiana, to fulfill the defense contract.

Allis-Chalmers had a set of criteria it looked at for choosing the site for its new facility. The company needed a large labor force, an adequate power supply, access to transportation, and community facilities. Terre Haute, located in Vigo County, Indiana, recorded around 105,000 residents in the 1950 census. It was located in a region of the state where coal mining had been a major source of employment, but had declined significantly by 1950. The city had aggressively pursued industry to establish facilities and take advantage of the workforce available. There was some success in getting some smaller factories to locate there, but the city yearned for a bigger company to provide more jobs in a heavier industry. Terre Haute fit the requirements that Allis-Chalmers executives looked for and picked that city for its new jet engine component production facility.

Terre Haute newspapers made the jubilant announcement on April 28. The company planned a 400,000-square-foot facility on a 200-acre site four miles north of the city. Executives at Allis-Chalmers anticipated recruiting a workforce of up to 4,000 employees to staff the facility. The company’s president, William Roberts, and other top executives visited Terra Haute to make the announcement and inspect the future building site. “This manufacturing operation is entirely precision work, and we need skilled labor,” Roberts said.

An Allis-Chalmers advertisement was taken out in the Terre Haute Tribune on May 28, 1951.

The company established an employment office shortly after and got to work hiring employees. The significance of a company like Allis-Chalmers building in Terre Haute was tangible for its citizens. The mayor had stressed the importance of the company locating there and the prosperity that could follow suit. Allis-Chalmers was a reputable name in the country. The promise of a few thousand jobs meant a demand for housing, new business, and an influx of revenue for a city of about 64,000 people. Many classified ads taken out in the local papers mention that homes or businesses for sale were near the plant. They also saw Allis-Chalmers moving in as a draw for other industries to locate there. An editorial in the Terre Haute Tribune on July 31, 1951, expressed the feeling that “something highly beneficial is about to transpire here.”

The groundbreaking ceremony for Terre Haute Works August 1, 1951.
(Employment Security Review-August 1952.)

A month prior to the groundbreaking, Allis-Chalmers established a pilot plant to get people trained and start filling compressor orders before full-scale production commenced in the new facility. The pilot plant made use of some of the old streetcar buildings. The city and other local organizations assisted in getting the property established as a temporary manufacturing facility. The pilot plant employed about 430 people, had over 300 machines in operation, and a payroll of over $110,000 at the beginning of 1952. Company executives commended the “magnificent cooperation of the entire Terre Haute community” for being so supportive of the company and helping the transferred employees to Terre Haute find housing.

Some interior views of the Allis-Chalmers pilot plant in Terra Haute showing lathes, milling machinery and workers fulfilling defense contract orders. (Terre Haute Tribune-Star, February 10, 1952.)

The new production facility also began to take shape by the new year. The local papers gave updates on building progression from time to time and shared some of the details and features of the new factory. Fortune magazine’s February 1952 publication had a two-page advertisement for the facility’s builder, Austin Company. It features a sketch of the facility, building specifications, production features, and accolades for Allis-Chalmers’ ingenuity in manufacturing.

Once again, Allis-Chalmers demonstrates its ability to master unusual engineering problems. The new Terre Haute plant is designed to give Allis-Chalmers maximum freedom in producing a new product quickly and economically…[and] is another example of American industrial ingenuity at its best.

Fortune, Vol. 45, Issue 2, February 1952, pages 34-35

Everything seemed to be on track for the Terre Haute Works to be completed and operational by the summer of 1952. The city, civic organizations, and the citizens of Terre Haute were filled with anticipation as the factory began to take shape. Allis-Chalmers published its 1951 annual shareholders report in the local papers in March 1952. The report detailed how company sales were up by 33 percent and all facilities were running at full employment capacity–almost 37,000 employees. Defense products accounted for 10 percent of production that year, and it was expected that it would climb to 30 percent in 1952. “We will be reaching for some new records,” exclaimed William Robert, the company president. He also anticipated what he called the “usual and unusual” problems the company might encounter that year. Ironically, a fusion of those two problems began to take shape over labor disagreements (usual) at a facility that had not opened yet (unusual).

J65 Turbo Jet Engine Display (Courtesy of the Milwaukee County Historical Society)

In 1952 the United Automobile, Aerospace, and Agricultural Implement Workers (UAW) union won bargaining rights for the workers at the pilot plant. UAW Local 1164 and Allis-Chalmers signed an interim contract laying out wages, holidays, and pay increases for production employees. The harmony would not last for long. By April cracks began to form when negotiations over a new contract broke down and a strike loomed. The stakes were high for Allis-Chalmers and Terre Haute.

*The original cost to build the Terre Haute Works was estimated at $5 million, but it was later reevaluated at $10 million.

Next: Part II “Community in Crisis”


“1951 Report by A-C Board.” Terre Haute Tribune, March 21, 1952.

“A-C Plant Due to be Finished by Aug. 15.” The Terre Haute Tribune, January 23, 1952.

“Allis Chalmers Project to Employ 4,000.” Terre Haute Star, April 28, 1951.

“Allis Chalmers Workers Sign Interim Contract.” Terre Haute Tribune, February 1, 1952.

“Allis-Chalmers New Indiana Plant to Boost Jet Engine Production.” Fortune, February 1952. , 34-35Internet Archive.

Bush, Ned. “Work Progresses on Construction of New Allis-Chalmers Plant Here.” The Terre Haute Tribune-Star, October 14, 1951.

“De Havilland H-1 Goblin Turbojet Engine.” National Air and Space Museum. Accessed October 28, 2022.

“Looks Like Good Year.” Terre Haute Tribune, July 31, 1951.

“Make Terre Haute Grow.” The Terre Haute Tribune, May 18, 1951.

“Terre Haute A-C News,”1958, Box 7, Folder 6A, Allis-Chalmers Corporation, Milwaukee County Historical Society, Milwaukee, Wisconsin.

Baker, Lee W. “Old Car Barns Here Transformed Into Throbbing Defense Plant.” Terre Haute Tribune-Star, February 10, 1952.

Green William and Roy Cross. 1957. The Jet Aircraft of the World. Garden City N.Y: Hanover House.

Kelley, Dwight D. “Labor Supply Important in Selecting New Plant Site.” Employment Security Review 19, no. 8 (August 1952): 18-28. Internet Archive.

Wendel C. H and George H Dammann. 1988. The Allis-Chalmers Story. Sarasota Fla: Crestline Pub.

Whitfield, Jakob. Goblin engine. Last modified September 10, 2020.

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