The Franklin Institute Logo
Case Files logo

Baldwin Locomotive Works: Evolution of the American Locomotive, 1907

Breakdown:

After the financial Panic of 1907, with the Interstate Commerce Commission then regulating the rates to be charged, railroad profits and spending on equipment declined even as rail traffic reached record levels. Baldwin incorporated in 1909, then made an initial public stock offering in 1911 in efforts to raise funds to pay for the Eddystone plant and maintain operations, but was still forced to reduce wages and lay off many workers.

In 1910, the good relations between management and workers broke down. Police reaction to a strike by Philadelphia transportation workers ballooned into a confrontation with Baldwin workers and eventually into a general strike by workers across the city. Union organizing was set in motion at Baldwin Locomotive Works, resulting in establishment of thirteen separate, but cooperating, craft unions. No lasting agreement was reached between the unions and the managers on matters of overtime wages, rehiring procedures, and working conditions, and a strike was called in June of 1911. The strike lasted a few weeks before breaking down and operations at Baldwin resumed on a less cordial basis.

Baldwin managers failed to recognize or adapt to changing circumstances as the age of steam engines waned. They began a diversification program in 1929 just as the Great Depression began. The company was overextended, sales of capital goods evaporated, and Baldwin Locomotive Works filed for bankruptcy in 1935.