The History Of Allison Transmission, And Why GM Is No Longer In The Picture

Allison Transmission had its humble beginnings in 1915 as the Speedway Team Company, which James A. Allison started to support his racing activities at the Indianapolis 500 (a race that's still helping people understand the appeal for racing). However, U.S. participation in World War I caused Allison to pivot to the production of military equipment such as high-speed crawler-type tractors and aircraft engines.

Once the war ended, Allison started rebuilding surplus Liberty plane engines with a groundbreaking new steel-shell bearing, which resulted in it making a name for itself on the global stage as Allison Engineering, the moniker it adopted in 1920. By late in the decade, the company was producing reduction gears and other components for next gen-American aircraft, cementing its status as a proper aviation engine operation.  

1928 was a watershed year for the company, as it saw both James Allison's demise and General Motors coming into the picture. GM's buyout of Allison laid the groundwork for a long and illustrious relationship, which only recently came to an end due to licensing disagreements.

By the late 1940s, Allison's engineering expertise was pulled into locomotive bearings and gears for GM's Electro Motive division, and soon the company was developing driveline solutions for military tanks. The CD-850 was its 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 into the Detroit Diesel-Allison Division in 1970, and later reorganized again as the diesel market surged in 1983. But these reorganizations had little effect on the company. It started to diversify and dabble in everything from torque converters to cutting-edge hybrid propulsion systems. 

Whether powering city buses, locomotives, military armor, or massive industrial equipment, Allison's transmissions became known for 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 '90s, the company had become two separate GM divisions: Allison Gas Turbine and Allison Transmission. GM tried to sell both units in 1991 to focus its efforts more on the automotive side of things. The sale of the Transmission unit to ZF Friedrichshafen AG was blocked in November 1993 by a U.S. Justice Department antitrust lawsuit, and a month later, the Gas Turbine unit was sold to its managers and renamed the Allison Engine Company. Fast-forward two years, and 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 lineup. And starting in 2001, GM started slapping the Allison badge on these pickups, a marketing move that proved wildly effective with diesel-truck loyalists who trusted the name. 

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

By 2020, GM rolled out 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 GM's, the Allison badge was retained, partly due to Allison validating the design. GM was simply paying extra cash for the privilege of just having Allison's name plastered on its cars. 

After months of negotiation, GM and Allison failed to reach terms on extending the licensing agreement. GM confirmed the decades-long partnership ends December 31, 2025. Starting in 2026, no new HD pickups will wear the Allison badge. By June 29, 2026, dealerships must remove all Allison-branded marketing and even de-badge any unsold trucks still wearing the iconic script.

The breakup wasn't driven by technical failures. GM's recall on the 10-speed was addressed with valve-body replacements, and Allison didn't distance itself because of reliability concerns. GM, which recently became the second largest EV maker in the U.S., simply didn't want to pay for branding on a transmission it already built.