Industrial requiem: management, labor, and investment at the Lowell Machine Shop

Abstract

In the 1890s, a desire for greater control of shop floor work induced Lowell Machine Shop management to mechanize components of the machine tool manufacturing process. This effort resulted in the removal of the firm’s skilled workers, who were an experienced source of ingenuity and, as others have shown, a community that diffused technical knowledge between firms. At the same time, the firm began paying larger dividends to shareholders instead of investing in the research and development of new products. These decisions damaged the firm, and shortly after the turn of the century, manufacturing operations at the Lowell plant ceased. Because in this period the Lowell Machine Shop was one of the most important capital goods firms in the United States, both in terms of national market share and reputation, this case raises questions about the degree to which specialty producers retained skilled workers and paid dividends.