Like many great companies, today the Falk Corporation is forgotten. At its height, it perfected the silicon chips of the industrial era. Falk designed and manufactured fat gears and thin gears, cheap gears and expensive gears, gears that could open the Panama Canal, and gears that fit on a small desk. It made gears for engines, dams, trains, conveyor belts, subway systems—any industry that needed to transfer power probably used Falk Gears.
There’s a good argument to be made that after a century of dominating the industrial era, it fell victim to the innovator’s dilemma. Falk’s corpse was sold for $295 million in 2005. Today it doesn’t even have a proper Wikipedia page.
I began researching the Falk Corporation because I wanted to learn more about the innovation network of Silicon Valley. It may seem odd to research a defunct Milwaukee-based gear manufacturer for this, but it makes sense when you ponder the history. By every conceivable measure Silicon Valley is the epic center of modern innovation. The bulk of the software and algorithms that power the world are designed inside the 20 mile region. Its evolution is also fairly straightforward: government subsidies, elite education system, solid business support and infrastructure, etc. In the early 1900s, as crazy as it sounds, that innovation epic center may have been Milwaukee. The industry was industrial metal fabrication, and in a span of about twenty years 10-15 companies that would dominate the mid 1900s sprouted within few miles. Six came from a 3-4 block radius in what is now known as Walker’s Point: Pawling & Harnischfeger (cranes), Kearney & Trecker (milling), A.O. Smith (car frames), Allis-Chalmers (everything), Nordberg and Chain Belt (mining equipment).
That’s what set me down the Falk Corporation’s path. I was trying to discover why it came to be, and what it means for today’s world–specifically building an innovation based economy. Here’s a super annotated version of my notes on the early history of the Falk Corporation. They’re primarily derived from the Milwaukee Public Library’s vast resources and the work of Milwaukee historian John Gurda.
Herman Falk, was born into a life of immense privilege and opportunity. His father, a cooper’s son, started Falk Brewery. At its peak, it out produced 20th century giants Schlitz and Miller—combined. The brewery had production capacity of around 200,000 barrels. To put that in perspective, today the largest brewery in Chicago maxes out at 250,000. In 1892 the largest brewing company in the world was created when the family sold itself to Pabst for over $500,000 in stock.
- Besides making him rich, Herman Falk used the brewery’s old production facilities as his early machine shop. His first major customer was Pabst—the company that made his family wealthy.
- Received his first patent when he was just 20 for “new and useful Improvements in Wagon-Breaks.”
Early Company History:
- Falk first success was a mobile foundry that could repair broken street car track joints. By 1900 almost 1/3 of all street rail tracks in America had Falk castings.
- The process caught on. By 1900 the industry was essentially commoditized.
- In 1909 he bought the exclusive American rights to Caspar Wust-Kuntz’s herringbone gear design. By 1915 engineers refined the technology to create 16 feet wide gears that could turn 50 feet and return to 1/10,000 inch of the original starting point.
- The company probably would have died without government contracts. Prior to WW1 the Federal Government allocated $500 million for naval expansion. This meant 32 orders for gear drives to power Bethlehem Shipbuilding’s destroyers.
- After WW1 the company focused on selling lots of standardized orders, rather than large custom designs.
- Early Eastern and Southern European immigration bans boosted sales as a low labor supply generated interest in automation.
- This led to the creation of regulators to control industrial motors and coupling units to control multiple machines at once.
- Spearheaded early co-op programs with local schools.
- Incredibly anti-union, caught falsifying Navy hourly billings.
That’s the gist of the Falk Corporation’s early history. If you have any additional thoughts or recommendations I’d love to hear them!
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