Alco produced locomotive bodies and prime movers while GE supplied the electrical gear.

Alco had previously partnered with GE and Ingersoll-Rand to produce the first successful line of diesel-electric switch engines from 1924 to 1928.

In forming the Alco-GE partnership, GE sought to expand the market for their electrical equipment after EMD started producing their own while Alco gained GE's support in terms of marketing and service infrastructure, areas in which EMD had a formidable advantage.

[2] Alco's development of higher powered engines for such locomotives had not been satisfactory and EMD's introduction of the GP7 road-switcher in 1949 threatened Alco-GE's position in their most advantageous market.

GE took over the gas turbine-electric venture in 1953 and during the early 1960s would replace Alco as EMD's strongest competitor in the North American market.