South Bend Lathe — one room, then the world's lathe

1906 – South Bend making ended with the brand's sale

The O'Brien twins: John J. and Miles W. O'Brien, identical twins born in Cork, Ireland in 1868, founded the company in 1906 as the South Bend Machine Tool Company: one room, thirty by sixty feet, in the Dinan Building at Washington and Johnson streets, at $65 a month. The product was the engine lathe, the machine tool that makes machine tools, built to the twins' conviction that a lathe could be made affordable without being made cheap. The business prospered at once; in 1908 the company moved to East Madison Street, into the former Singer cabinet plant, and became the South Bend Lathe Works. By 1919 it offered 44 sizes of lathe and had become, on its own long-carried description, the largest exclusive manufacturer of metalworking precision lathes in the world, with customers in more than 88 countries — and that standing is backed by an independent period measure: a 1931 news report of a U.S. Department of Commerce study put South Bend Lathe's output at 47 percent of all engine lathes sold in the United States in 1929–30.

Amsted, then the workers buy it: A mid-1930s account of the works counts about 475 employees and 100 styles of lathe on offer. The twins held the company until 1959, when American Steel Foundries — later Amsted Industries — bought it with a workforce of 360. New building programs in the late 1940s and 1950s had already taken it onto Sample Street, where in 1965 it spread into a former Studebaker engine plant. In 1975 Amsted moved to close the division, and the employees bought it themselves: with a U.S. Commerce Department grant to the City of South Bend arranged under Mayor Jerry Miller, the workers formed an employee stock ownership plan on 1 July 1975, and the sale closed on 3 July 1975, leaving about 500 employees as owners. The Wall Street Journal ran the story under the headline "U.S. Helped 500 Workers Take Over a Machine-Tool Manufacturer," and trade and national press of the moment described the company, in its own corporate history's words, as the first 100 percent employee-owned company in the nation — printed as the period claim it is. Five years later the owners struck: in 1980 the company's United Steelworkers members struck the company they owned for two months, a fight the local union history carries as a matter of responsibility on both sides.

The name outlives the making: Employee ownership did not end the decline of the American machine-tool trade. By 1990 the company's creditors were seeking involuntary bankruptcy; operations passed through Derda Inc., TIMM Inc., and another employee group, and the service-parts lines — the Johnson Press and Deka Drill businesses — were sold to LeBlond Ltd. of Cincinnati, which bought the South Bend Lathe assets outright in 2002. In 2009 the entrepreneur Shiraz Balolia bought the brand with its intellectual property, drawings, blueprints, and parts inventory. New South Bend lathes are manufactured in Taiwan and the company is based in Bellingham, Washington. The name remains on lathes sold around the world; the making left South Bend with the assets.

Sources:

1. South Bend Lathe Co., the company's own corporate history (southbendlathe.com) — founded 1906 by the O'Brien twins in the Dinan Building; the 1908 move to the former Singer plant on East Madison Street; 44 lathe sizes by 1919 and the largest-exclusive-manufacturer standing; the 1959 American Steel Foundries purchase; the 1965 move to Sample Street; the 1975 ESOP and the "first 100 percent employee-owned company in the nation" as carried in its own account; the 2002 LeBlond purchase and the 2009 Balolia acquisition.
2. Wall Street Journal, "How and Why U.S. Helped 500 Workers Take Over a Machine-Tool Manufacturer" (16 August 1976) — the Commerce Department grant to the City of South Bend and the workforce of about 500 at the buyout.
3. U.S. Department of Labor, Advisory Opinion 81-28A, and Baker v. Amsted Industries (7th Cir. 1981) — the ESOP formed 1 July 1975 and the sale closed 3 July 1975.
4. Metalworking press account of the 1931 news report — a U.S. Department of Commerce study there cited put the company's 1929–30 output at 47 percent of all engine lathes sold in the United States.
5. Gardner Publications via The Free Library — the creditor action of 1990, the Derda and TIMM passages, and the sale of the Johnson Press and Deka Drill parts lines to LeBlond.