The history of Allison transmission and why GM is no longer in the picture – Jalopnik

Allison Transmission had its humble beginnings in 1915 as the Speedway Team Company, through which James A. Allison began his racing efforts at the Indianapolis 500 (a race that still helps people understand the appeal of racing). However, the American participation in the First World War caused Allison to focus on the production of military equipment, such as high-speed tractors and aircraft engines.

When the war ended, Allison began rebuilding surplus Liberty aircraft engines with a groundbreaking new steel bearing, leading it to make a name for itself on the world stage as Allison Engineering, the name it adopted in 1920. By the end of the decade, the company was producing reduction gears and other components for the next generation of American aircraft, cementing its status as a true aviation engine.

1928 was a turning point for the company, as both James Allison and General Motors came into focus. GM’s acquisition of Allison laid the foundation for a long and illustrious relationship, which only recently ended due to licensing disagreements.

By the late 1940s, Allison focused on the engineering expertise of locomotive bearings and gears for GM’s Electro Motive division, and soon the company was developing powertrain solutions for military tanks. The CD-850 was the first cross-drive tank transmission and was tested in 1944 before hitting production lines in 1949.

At GM’s direction, the company was split into Aircraft Operations and Transmission Operations in 1946, merged with Detroit Diesel to form the Detroit Diesel-Allison Division in 1970, and later reorganized again as the diesel market boomed in 1983. But these reorganizations had little effect on the company. It began to diversify into everything from torque converters to advanced hybrid propulsion systems.

Whether powering city buses, locomotives, military armor or massive industrial equipment, Allison transmissions became known for their durability and performance. This reputation would eventually lead to one of the most recognizable badges ever mounted on a heavy-duty pickup: the Allison nameplate on GM trucks.

By the 1980s and early 1990s, the company had become two separate GM divisions: Allison Gas Turbine and Allison Transmission. GM attempted to sell both units in 1991 to focus its efforts more on the automotive side. The sale of the transmission unit to ZF Friedrichshafen AG was blocked by a US Department of Justice antitrust lawsuit in November 1993, and a month later the gas turbine unit was sold to the managers and renamed Allison Engine Company. Two years later, Allison Engine was acquired by Rolls-Royce.

Meanwhile, GM kept the transmission division, at least for a while. It continued to use Allison transmissions in buses, commercial vehicles and the heavy-duty 4500/5500/6500 Silverado series. And starting in 2001, GM began putting the Allison badge on these pickups, a marketing move that proved hugely effective with diesel truck loyalists who trusted the name.

This practice continued even when The Carlyle Group and Onex Corporation purchased Allison Transmission for $5.6 billion in 2007, making it an independent company that later went public in 2012.

By 2020, GM introduced its own in-house 10-speed automatic for the Silverado HD and Sierra HD, co-developed with Ford, not Allison. Although the transmission hardware was from GM, the Allison badge was retained, in part because Allison had validated the design. GM simply paid extra money for the privilege of putting Allison’s name on its cars.

After months of negotiations, GM and Allison were unable to reach an agreement to extend the licensing agreement. GM confirmed that the decades-long partnership will end on December 31, 2025. Beginning in 2026, no new HD pickups will carry the Allison badge. By June 29, 2026, dealers must remove all Allison-branded marketing activity and even remove the badges from unsold trucks that still bear the iconic script.

The breakup was not due to technical glitches. GM’s recall for the 10-speed transmission was addressed with valve body replacement, and Allison did not back down due to reliability concerns. GM, which recently became the second-largest EV manufacturer in the US, simply didn’t want to pay for branding on a transmission it had already built.