General Motors went on to pioneer the development of practical, high-output and lightweight, two- and four-cycle diesel powerplants, but it was Alexander Winton (famous for losing an auto race to Henry Ford in 1901) who began the diesel industry in North America.
Charles F. Kettering, GM's head of engineering from 1920 to 1947, always had an interest in the novel diesel powerplant. The fact that he was also a member of the Detroit yachting community led him to investigate the Winton diesel marine engine design. After purchasing and installing a Winton diesel mill for his own pleasure, Kettering demonstrated the engine's capabilities to his boss at GM, Alfred P. Sloan who was Chairman of the Board. Sloan, always looking to the future, purchased the Winton Co.
Alexander Winton and his organization had made great strides in the American two-stroke diesel field, and he knew that GM had the engineering know-how and a massive financial base to realize the untapped potential of his unique power source. Timing is everything, and the stock market crash of 1929 slowed the negotiations and the final purchase. Winton's moderately sized, Cleveland-based company was made into a GM division by 1930.
Another major client of Winton's, Electro-Motive Engineering, had been working on his development of a two-stroke diesel mill for railroad locomotives, and in a unique turn of events, the General took another risk and purchased both organizations during what analysts would define as uncertain market conditions.
General Motors immediately began a marketing blitz demonstrating the economical and powerful benefits of utilizing these ultramodern mills. The famous diesel-powered Zephyr passenger streamliners and the '33 World's Fair GM exhibit demonstrated the radical mill's functionality. At the fair, Winton diesels powered a GM automotive assembly-line recreation exhibit. The public was enthralled, but some insiders felt a lot of engineering was needed to make these functional machines profitable. Critics aside, the Zephyr streamliner proved that a diesel engine had the ability to cut the running time to West Coast cities by more than 20 hours. Though other firms continued to experiment, GM was the only major player fully engaged in diesel production until after World War II. In short, GM had the market cornered. As a result, the success of its locomotive business allowed Sloan and Kettering to fully establish Detroit Diesel in 1937.
Detroit Diesel rapidly began to research, develop, and market its diesel mills in three distinct areas: marine, industrial, and railroad use. With a measured decline in the railroad market after World War II, Detroit Diesel's position remained strong. Division engineers had set in motion future mills for the new truck, marine, and industrial businesses. Obviously, competitors had entered this field, most notably Cummins. During the '60s, the trucking industry seemed to be a black hole for diesels to fill.
The General felt fine-tuning was necessary and combined Detroit Diesel and Allison operations in 1970. Allison was jointly acquired at the same time as Winton Engine and was considered a twin in 1929. It had specialized in the development of aircraft powerplants, delivering 70,000-plus units during World War II. GM decided the future for both of these specialized entities was the marketing and sale of products as power providers for automotive platforms.
1980 found the Detroit Diesel Allison division trailing Cummins in the market it had created. Though Detroit Diesel hung on to a 30 percent market share, its sales continued to drop, and by 1987, its share had dwindled to less than 5 percent.
Obviously, the rapid acceptance of imported diesel engine brands was a factor. In addition, Cummins continued to gain market share. Quality-control issues at Detroit Diesel sent the brand into a negative tailspin. The end user suffered, and suddenly, major customers were lost. Observers felt the General shared a majority of the blame by ignoring the division with cost cutting and lack of modernization. During this timeframe, the General spent $50 billion on facility upgrades and modernization programs. Detroit Diesel received a paltry $100 million. Buyers for the diesel engine group were sought in 1987.