CORPORATIONS: The New Team

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Staid Baldwin Locomotive Co. had dozed at the switch. Once it made nearly half of all U.S. locomotives, but in the last five years its share of business has dropped to less than 10%. Unwilling to concede that diesels were revolutionizing the locomotive business (TIME, Dec. 29), Baldwin concentrated on making steam engines while such upstarts as General Motors' Electro-Motive Division grabbed the lion's share of new orders.

Last week, Baldwin Locomotive got a waking & shaking up. The shaker was Westinghouse Electric Co., which bought working control (21%) of Baldwin. Out as Baldwin's boss went 60-year-old President Ralph Kelly. In as executive vice president and operating boss went Westinghouse's longtime chief engineer, Texas-born Marvin W. Smith, 54. Smith's big job is to put Baldwin back into the running for a share of the booming diesel-electric locomotive market.

Westinghouse had long had a fine track arrangement with Baldwin, just as General Electric had with American Locomotive Co. (Westinghouse made the electrical transformers and motors for such diesels as Baldwin built.) But American Locomotive, foreseeing the diesel revolution, spent $20 million on five war surplus plants and converted completely to diesel manufacture. (It rolled out its last steam locomotive in June.) By the end of 1947 American Locomotive had almost caught up with G.M.

One reason for Baldwin's slowness was a shortage of capital to change over to big-scale diesel production. Westinghouse's purchase of $7,500,000 worth of treasury stock (at $15.11 a share) gave Baldwin some of the new working capital it needed. With Westinghouse at the throttle, it looked as if Baldwin was ready to highball.