For millennia, humans have invented and produced tools and machines to make life easier. It has been a long journey from the wheel and lever to iPhones and SpaceX. Along the way, pioneering engineers have designed some of the largest machines ever built (”earthmovers”) to take on massive projects like digging the Panama Canal, dredging harbors, and moving rocket ships at Cape Canaveral. This is the story of the company which engineered and built some of the largest machines ever made, Bucyrus-Erie of Milwaukee, which Caterpillar acquired at a price of about $8 billion in 2010, Caterpillar’s biggest acquisition to date.
While we only mention a few of the company’s leaders in this quick chronicle of the company’s history, we think it important to always remember the tens of thousands of people who spent most of their lives working for Bucyrus-Erie, its predecessors and successor, and the many families, businesses, and communities they supported with their paychecks.
Context: The Construction Equipment Industry
The “heavy equipment” or “construction equipment” business has as many niche markets as any industry that we have studied. Small firms and the contractors themselves developed machines that met a certain need. Products of this industry range from little Bobcats to giant bulldozers. They include road rollers and scrapers, surface mining shovels and trucks, and cranes (overhead, mobile, and towering), up to the 27 million pound “Big Muskie” walking dragline pictured above, built by Bucyrus-Erie. Customers include the builders of dams, roads, skyscrapers, and canals, as well as the surface mining industry.
Over the years, companies from the tiny to giants like General Motors and International Harvester entered and left the business. The greatest challenge to industry competitors is the cyclicality of demand. Economists are familiar with the ups and downs, the cycles, of the auto and homebuilding industries, but the market for heavy equipment, tied to the availability of capital for major projects, swings up and down even more dramatically.
This is illustrated by the year-to-year revenue swings of the largest and greatest company in the industry, Caterpillar. The 2008 recession caused revenues to decline almost 40% in 2009, but two years later, they were up over 40%, then down again. For many companies, a 10% decrease in revenues would have been crippling or even fatal.
Many companies (and their employees) could not survive such dramatic rises and falls in their business. It is no wonder that the companies in this industry have changed ownership often, sometimes struggling to survive. As we will see, Bucyrus-Erie went bankrupt twice, once in the 19th century and again in the 20th, but the underlying products and technology were strong enough to live on, given the right leadership and strategies.
Over the years many American companies have participated in the industry, including Gardner-Denver, Dresser Industries, Ingersoll-Rand, LeTourneau, Westinghouse Airbrake (WABCO), American Standard, JI Case, and Allis-Chalmers.
Today the now globalized industry is led by Dallas-based Caterpillar and Tokyo-headquartered Komatsu, followed by such firms as China’s XCMG and Sany, American Deere, Japanese Hitachi, and from Europe the Swiss-German Liebherr, Swedish Volvo and Sandvik, and British JCB. Others include the Dutch-Italian-American CNH Industrial and American companies AGCO, Terex, Alamo Group, Manitowoc, and Gencor Industries. Most of these companies sell their often-specialized products globally.
Origins
Within this context, let’s go back to the beginnings of Bucyrus-Erie in the early 1880s in Cleveland.
Daniel P. Eells, born in New York, started his career as a bookkeeper at an Ohio bank in the late 1840s. By 1868, he was the President of the Commercial National Bank of Cleveland. Eells had also married the daughter of prominent Cleveland businessman Stillman Witt, who had made his fortune in the railroad construction business that was ramping up in that era. Dan Eells went on to become involved in over 30 companies, including the Ohio Central Railroad and the Ohio Central Coal Company. Seeking further opportunities, in 1880 he and his friends decided to get into the railroad equipment industry. The timing was right. Over the next ten years, sixty-five thousand miles of new track would be laid.
The Ohio Central Railroad located its superintendent and shops in Bucyrus, Ohio (pronounced bew-SY-res). There, in December of 1880, Eells and his friends bought the foundry, machines, and land of the then-idle Bucyrus Machine Company for $17,000. They hired master mechanic John Thompson to design and build their first machines, which for the next four years included handcars, locomotive wheels, cylinders, switches, and other equipment.
In 1882, the company received its first order for an excavator, a steam shovel, from the Ohio Central Railroad. The following year, they introduced their own Thompson “consolidated steam shovel and derrick,” which won first prize at the National Exposition of Railway Appliances in Chicago. This large machine was an improvement on the original idea, patented by Wiiliam Otis back in 1835. It ran on railroad tracks and could be used either as a shovel, moving earth out of the way, or as a derrick, to lift heavy loads or upright wrecked trains.
Otis Steam Shovel, 1835:
Thompson Steam Shovel, 1882:
Heavy Lifting:
By 1885, the company had expanded its facilities and made $80,000 in profits. Between 1882 and 1885, the company sold ten shovels; from 1886 through 1888, they sold forty-nine of the machines. Such excavating machines, including the largest ones made by any company, represented 80% of the company’s business. In 1888 they also shipped fourteen “dipper dredges,” machines used on the water to dredge canals, harbors, and other waterways where men digging with hand shovels was impractical. Unlike shovels, the dredges could lower their dipper (bucket) to levels below the machine itself.
By the early 1890s, management under Eells determined that it should cut back on its broad line of products and concentrate on the shovel, crane, and dredge businesses by continually improving its products. The company became known for its specialized equipment, the largest machines available, which also began to be used for strip, surface, and placer mining.
New Digs and Challenges
As the business continued to grow, it needed to expand its facilities, but the Bucyrus plant was too small, and no adjacent land was available for expansion. Opportunely, in 1891 they were approached by a group of Milwaukee businessmen developing a new industrial area on the south side of that city. The Milwaukee interests offered the Bucyrus company eight acres of land next to the Chicago and Northwestern Railroad, two acres of land for docks on Lake Michigan, and $50,000 cash to make the move. By the end of 1893, the now renamed Bucyrus Steam Shovel and Dredge Company of Wisconsin had moved to South Milwaukee, where the company has remained ever since.
Milwaukee, with both rail and lake access, was quickly emerging as the “machine shop of the world.” It was a nexus for the construction equipment industry and the people who knew how to design and build those machines. Among them was industrial giant Allis-Chalmers. While it may be beer that made Milwaukee famous, it was companies like these that made it productive:
South Milwaukee Bucyrus plant:
However, only ten percent of the workers from Bucyrus moved to Milwaukee and the company had both labor and product quality troubles at the new facility. The company was soon in debt and by 1895 went bankrupt. Dan Eells’ son Howard was named receiver for the company. He managed it well, Bucyrus emerging from bankruptcy in 1897.
Moving the Earth
Bucyrus was quickly back on track, in 1899 introducing its largest shovel yet, a ninety-five ton shovel with a dipper that could hold five cubic yards of earth, weighing over five tons. Twenty-four Bucyrus shovels were used to dig the Chicago Drainage Canal. Others were used in the biggest earthmoving project of the time, the New York State Barge Canal.
The company’s reputation was furthered by its contribution to the building of the Panama Canal. By the time the canal construction was finished in 1908 (and opened in 1914), the government had bought seventy-seven Bucyrus machines and twenty-four from emerging arch-rival Marion Steam Shovel of Marion, Ohio (near Bucyrus). Fellow Milwaukee company P&H (originally Pawling and Harnischfeger) also became an important competitor.
President Theodore Roosevelt sitting on a Bucyrus machine at the Panama Canal:
Men in a bucket: photo taken at the Milwaukee Bucyrus plant, from the Milwaukee Public Library Photo Collection:
In 1910, Bucyrus introduced its first dragline, used primarily in surface mining. A dragline is an enormous machine with a dipper that was pulled (dragged) toward the machine rather than digging away from it like a shovel. It had a long boom that allowed it to reach much further away than an ordinary shovel. And like shovels, the dragline swiveled so the material could be dumped anywhere, either into piles or onto trucks or railcars. Like dredges, they could also dig below the level of the main machine.
The largest ones were so huge that they were built onsite, with parts delivered by rail from Milwaukee. Over time, the company’s draglines grew larger and larger. From 1910 to 1937, Bucyrus sold 370 draglines, for which the company achieved global recognition.
Models which had giant “shoes” could move themselves (very slowly) and were called walking draglines. This is how they “walk” :
The company began to evolve more rapidly. In 1905 they hired WW Coleman as factory superintendent. By 1911, at the age of thirty-eight, he was made President of the company, still largely under Eells family control. Coleman was key to the company’s success, retiring as Chairman in 1957.
In 1911, Bucyrus bought the smaller Vulcan Steam Shovel Company of Toledo and moved that factory to Evansville, Indiana. In 1911 they purchased the Atlantic Equipment Company, a division of locomotive giant American Locomotive. In this era, the company also became publicly owned, trading on the stock market.
During World War I, Bucyrus made shells, cranes, and derricks for the British and American militaries. The construction business boomed in the 1920s, as many of our most famous skyscrapers rose up from deeply dug foundations.
In 1927, the company bought the leading maker of smaller shovels, the Erie Steam Shovel Company of Erie, Pennsylvania, and renamed itself Bucyrus-Erie, a name it kept for almost seventy years, until 1996.
From 1930 to 1985, the company had a joint venture with the big British construction equipment firm Ruston and Hornsby, called Ruston-Bucyrus, to make a full line of excavating equipment across the pond. Products designed by Bucyrus-Erie, with massive parts that were engineered down to a fraction of an inch, were known around the globe for their quality, strength, and durability.
In the same era, Bucyrus-Erie bought Monighan Manufacturing of Chicago, the company that had pioneered the walking dragline in 1913. In 1933 they acquired the Armstrong Drill Company of Waterloo, Iowa, a maker of blasthole drills. In 1946 they introduced the 42-T drill and sold ten thousand units. A typical drill looks like this:
From 1942 to 1945, two-thirds of the company’s production went toward the war effort. In 1948, Bucyrus-Erie took control of the Milwaukee Hydraulics Corporation, whose hydraulic excavators moved their arms using pressurized hydraulic fluids rather than winches, chains, and steel ropes. These became a major category for the company.
In 1955, Bucyrus-Erie’s annual revenue reached $72 million.
The Roaring 1960s and 1970s
In 1962, the company introduced the model 3850-B stripping shovel, with a dipper that could hold 115 cubic yards of material, about double the size of any other machine. It weighed over eighteen million pounds. The following year, Bucyrus-Erie built the model 1850-B electric stripping shovel for a Kansas coal mine, which named the machine Big Brutus. The machine weighed about eleven million pounds and operated until 1974. It was saved and is now a tourist attraction. The full story is told in this video. Over the next two years, rival Marion Power Shovel (renamed from Marion Steam Shovel) built an even larger one, nicknamed The Captain, which weighed twenty-eight million pounds!
In 1967, the company received an order for a walking dragline from the Central Ohio Coal Company, owned by the American Electric Power Company, to provide coal for the nearby Muskingum River power plant. This was the largest machine Bucyrus-Erie ever built, the model 4250-W walking dragline, nicknamed Big Muskie, and cost $25 million (about $220 million in 2025 dollars).
Big Muskie required two years and 200,000 man-hours to build at the mine, the thousands of parts made in Milwaukee delivered in 340 railcars and 260 truckloads. The 220 cubic yard bucket weighed 500 tons loaded, was suspended by eight five-inch-diameter wire ropes, the largest ever made at the time. The bucket could hold a two-story house. The total machine weighed about twenty-seven million pounds, was 22 stories tall and over 400 feet long, with a 310-foot boom (hoisting arm).
From 1969 until its retirement in 1991, Big Muskie removed 600 million cubic yards of the overburden that covered the veins of coal, twice the amount of earth moved to build the Panama Canal. We urge you to take a look at this video which tells the Big Muskie story or this one which shows more of the innards and parts. Another great video is this one which takes you on an inside tour of a modern dragline at work today.
These huge walking draglines, now powered by electricity, sold in small quantities. From 1963 to 1973, the world total demand averaged twelve units a year. Large strip mines were the customers. The Arab Oil Embargo in October 1973, changed all that, causing the demand for coal to feed power plants to rise virtually overnight.
Bucyrus-Erie received so many orders that, at current production levels, it would have taken fifteen years to fill all of them. At the end of 1974, the company had back-orders totaling $636 million. In order to catch up with demand, new factories were built, doubling the company’s factory space from 2.3 million square feet to 4.6 million in 1974 alone.
While the company doubled in size between 1960 and 1970, the next decade witnessed more than a tripling of revenue.
Tough Times Again
As happens in highly cyclical industries, busts follow booms. But this bust was especially harsh. In the early 1980s, oil prices came back down, demand for coal dropped, and environmental issues and regulations curtailed the growth of the coal industry. Bucyrus-Erie shrunk back to its former factory size and cut the product line to just electric shovels, walking draglines, and blasthole drills. In an effort to make the most of those lines, in 1988 they bought British dragline maker Ransomes and Rapier.
But those efforts were not enough, as the company had significant debts and posted a net loss of $108 million in the four years ending in 1993. In that year, Bucyrus-Erie revenues had dropped to $198 million, down over 60% from their peak, and the company declared bankruptcy.
The company emerged from bankruptcy the next year, 1994, and in 1996 was renamed Bucyrus International, with about half of revenues coming from outside the United States. In one year, Australian mining giant BHP alone accounted for 20% of the company’s shipments. While the big shovels were replaced when worn out, draglines were such huge and complex structures that they were not normally replaced, but renewed with new parts. Around half of revenues came from parts and maintenance, half from new machines.
In 1997, Bucyrus bought arch-rival Marion Power Shovel, ending 113 years of rivalry. Marion was famous for its huge shovels, had built the Apollo Moon Rocket Transporter at Cape Canaveral in 1965, and was the second largest manufacturer of draglines after Bucyrus. Thus was created a more powerful supplier to the mining industry.
Also that year, American Industrial Partners, a private equity firm formed to turn around struggling manufacturing companies, took the company private, off the stock market.
Nevertheless, the firm continued to struggle. In 2000, they lost $33 million on revenue of $280 million, followed by more losses in the ensuing few years.
An Astonishing Rebirth
At that point, the owners took strong action, in January 2000, appointing Timothy W. Sullivan as the Chief Executive Officer. Sullivan had first joined Bucyrus in 1976 and worked in many different roles, so he knew the business. And, boy, was he the right man for the job.
Sullivan focused on serving the mining industry and developed a strong organization with innovative, competitive machines. Prosperity began to return, and in 2004 the company again entered the public markets with an Initial Public Offering (IPO) underwritten by Goldman Sachs which raised $194 million. American Industrial Partners received over $70 million for the shares they sold in the offering. (Did they sell out too early?)
Between 2000 and 2010, the company increased revenue fourteen-fold to $3.8 billion, grew earnings before interest, taxes, and depreciation (EBITDA) over 800 times to $850 million, and total employment 12 times to 11,800 people. In 2009 and 2010, the company was one of the ten fastest growing companies in America according to some lists.
Now Bucyrus International was a quality company and a tough competitor. In 2011, the world’s largest construction equipment company and an American icon, Caterpillar, paid $7.6 billion for the company. The stock which had come on the market at $18 in 2004 now brought $92 per share, an outstanding return for those investors who held on.
Sullivan retired from the company and went on to be CEO of other companies. Today he is dean of the Sullivan School of Business, Engineering and Technology at Carroll University in Waukesha, Wisconsin.
In 2017, Caterpillar’s largest global rival, Komatsu of Japan, bought control of the other big Milwaukee maker of heavy equipment and cranes, P&H.
Today mining equipment is an important category for Caterpillar, with much of the demand coming from surface copper mines. They still offer the giant machines that Bucyrus was famous for, now sold under the Caterpillar brand. In 2024, serving these “resource industries” accounted for $12.4 billion of Caterpillar’s $61 billion in annual revenue, and $2.5 billion of the company’s $15 billion in operating profits.
Here are the specifications for Caterpillar’s biggest machine today, but they “only” get up to about 16 million pounds, with boom lengths of up to 435 feet. Please let us know if you decide to buy one!
And so, after over a century of ups and downs, some severe, the products of Bucyrus-Erie’s talented engineers and factory workers live on, stronger than ever, in the hands of a corporation with deep pockets and a secure future.
Among the many stories of great American manufacturing companies that we tell on our website, this one has among the happiest of endings. It also demonstrates the critical importance of having the right leader at the right time.
We hope these tourists don’t mind us closing with this great picture grabbed from the internet!
Gary Hoover
Executive Director
American Business History Center
Sources: This story is primarily derived from the Bucyrus company endorsed history books One Hundred Booming Years: A History of Bucyrus-Erie Company 1880-1980 by George B. Anderson (1980) and Bucyrus: Making the Earth Move for 125 Years by Keith Haddock (2005), the nation’s top historian of these big machines and co-founder of an association and museum devoted to them. Haddock has written many books on Bucyrus and its competitors. Also invaluable was Yellow Steel: The Story of the Earthmoving Equipment Industry by William B. Haycraft (2002), one of the best histories of one industry in our substantial business history library, covering Caterpillar, its predecessors, and the other major manufacturers.
