The origins of the Busch-Sulzer Brothers Diesel Engine Company, the first firm to manufacture diesel engines in the United States, lie in the entrepreneurial activities of the St. Louis, Missouri, beer magnate, Adolphus Busch. Like many other late 19th century industrialists who sought “horizontal integration,” Busch began to expand his manufacturing interests in order to control the range of manufactures upon which his breweries were dependent. Thus inclined, he quickly perceived the commercial value of the new internal combustion engine invented by the German scientist, Dr. Rudolf Diesel, which burned cheap, liquid fuel under high cylinder pressure. After seeking the advice of an engineer, Edward D. Meier, Busch purchased exclusive rights for the U.S. patent in 1897, even before Diesel had perfected a working model.
In 1898 Busch set up a corporation, the Diesel Motor Company of America, and assigned his patent rights to it. This firm was planned as a licensing, not a manufacturing, firm which would operate by selling licenses to independent machine shops and then selling the completed engines. By adapting the German design to American production conditions, Busch engineers completed the first successful commercial diesel engine in 1898, which was then installed in the Anheuser-Busch brewery in St. Louis.
Unfortunately this engine failed in 1900, ruining the Diesel Motor Company of America in the process, and in 1901 Busch formed the American Diesel Engine Company from old stock and new capital. Still conceived of as a licensing firm, the company completed an improved design in 1902. These engines were simple, four cycle trunk piston, stationary engines, but they became noted for their reliability. By 1909, 157 engines had been manufactured.
Yet, despite the operating success of the engine, the American Diesel Engine Company was not financially profitable. This seems to have been due to the depression of 1907-1908, dissension among the company leadership, and expensive and wasteful experimentation required by the European agreement.
In 1908 financial problems became such that Busch purchased the company assets, and until January, 1911, operated the firm in receivership as Adolphus Busch, Purchaser of the American Diesel Engine Company. With the expectation of competition after the expiration of his exclusive diesel patents in 1909, Busch began negotiations with Diesel and the Sulzer Brothers Diesel Engine Company, Wintherthur, Switzerland, another Diesel patent holder. Their agreement was completed on April 19, 1911, and evidences Busch's interest in international business consolidation. By this agreement, which lasted until 1926 without royalties or fees, the Swiss firm contributed their greater engineering development on the diesel engine, while the American firm contributed manufacturing experience, equipment, and financial support. Combining these two influences, a new design was perfected and put into production after the completion of Busch-Sulzer's factory in 1913.
As expected, the expiration of the monopoly on the patent rights meant the rise of competing firms which relegated the Busch-Sulzer firm to the status of a small specialized manufacturing company. Only with the acquisition of marine engine contracts during World War I did Busch-Sulzer achieve prosperity. The manufacture of the submarine engines was regarded as a risky venture, but Busch-Sulzer successfully carried out the project and between 1915 and 1917 produced 72 U-1, U-2, and U-3 submarine engines. This type of production monopolized the firm's business to such an extent during the war that it virtually ceased production of stationary engines.
After the war, the firm attempted to return to the production of stationary engines, although a number of submarine engines were manufactured for the Navy in 1920, and for the United States Shipping Board in 1924 and 1925. The firm's marine engine experimentation during the war apparently had destroyed whatever pre-war prominence the firm possessed in building stationary engines. Struggling to maintain financial independence of government contracts, the company was prosperous only from 1926 to 1928. During the 1920s successful experimentation on an airless injection engine and on a two cycle engine was carried out. The same period also saw an improved locomotive engine put into production. During World War II, Busch-Sulzer received a number of contracts with the War Department for the production of engines of mine sweepers and army tugs.
From 1911 to 1946 the management of the firm changed from the personal leadership of the owner-entrepreneur to the professional management of the modern corporation. Adolphus Busch, Meier, and Diesel died within six months of each other in 1913. Until 1929, James Harris, General Manager, controlled the firm for August Busch. He was succeeded by Edward B. Pollister, who was succeeded in turn by N. H. Schwenk in 1944. In 1946 the firm, which had suffered throughout its history as secondary to the other Anheuser-Busch interests, was sold to the Nordberg Manufacturing Company of St. Louis. After a short period of production, the Busch-Sulzer designs were found to be obsolete and the division was closed.
