From Atlas Diesel to Atlas Copco

The two companies AB Nya Atlas and AB Diesels Motorer had the same owners, and this is one of the reasons they merged in 1917. The merged company Atlas Diesel had two main product areas – diesel engines and compressed air products.

President Walter Wehtje inspects rock drilling equipment together with an employee.

Nya Atlas president Gunnar Jacobsson was appointed as the president of the joint company. The influential engineer Jonas Hesselman from Atlas Diesel left the company soon after the merger however, due to difficulties in cooperating with Jacobsson. The years during the First World War brought an upswing for the two companies, and towards the end of the war, export had become very important. Between 40 and 50 percent of production went to export. A severe post-war depression began in the early 1920s, and after a few year's respite, the worldwide Great Depression began at the end of the decade. Both of the depressions caused considerable losses for Atlas Diesel. This led to two financial reconstructions of the company, first in 1925 and again in 1934. After the reconstruction of 1925, the large machine shop at Atlas was closed after all remaining operations were moved to Sickla. The unprofitable manufacture of diverse goods was phased out at the same time as the remaining production branches were oriented to standardization and mass production. A time of prosperity began in 1925 with strongly increased sales, both for pneumatic products and diesel engines. Despite this, Atlas Diesel was not a profitable company. It was burdened with substantial over-capacity and consequently high costs. One reason for this was the intensive involvement in the development of diesel engines.

Losses for engine operations

Studies at the beginning of the 1930s showed losses for engine operations, while pneumatic operations were running at a 50-percent profit, and that this development would likely continue. Company management believed however, that design work in the diesel area would bear fruit. It was not until the mid-1930s that the market recovered and demand for the products grew. Between 1934 and 1939, total sales increased from just over SEK 6 million to nearly SEK 16 million. Compressed air operations were the most expansive, while the diesel engines were the most advanced products, thanks to cost-intensive development. Gunnar Jacobsson left the president post after more than 30 years of service. The board of directors now preferred someone with a strong background in business as the president – Marcus Wallenberg's close friend Walter Wehtje. Conflicts arose between Wehtje and vice president Herman Pyk, who in contrast to Wehtje, saw diesel as the company's primary product. During the Second World War, Atlas Diesel succeeded in achieving two goals: preservation of the high level of activity, and through product development and organizational structuring, preparation for a sales breakthrough at the end of the war.

Expansive strategy

Demonstration of rock drilling equipment, with the “Swedish Method”, at the Izmir exhibition in Turkey, 1953.

Prior to the coming peacetime era after the Second World War, the company staked out a clearly expansive strategy. Sales success had to be based on an assortment of strong products, and this was just what had begun to emerge from the company's pneumatic operations. The company's development after the war followed two primary lines: expansion of manufacturing capacities through efficiency measures and machinery purchases in Sickla, and acquisition of manufacturing subsidiaries in Sweden and in other countries.

Together with Sandvikens Jernverk, during the war years Atlas Diesel had developed a new technological concept – The Swedish Method – which after the war could begin to be marketed and sold. This concept – with the cornerstones constituted by lightweight rock drills and drill bits with carbide tips – strongly influenced the company's entire pneumatic program. Atlas Diesel finally terminated its less profitable diesel manufacturing in 1948, when Nydqvist & Holm (NOHAB) placed a bid to take over operations. The name Atlas Diesel was no longer relevant, and a new name was sought that would both reflect the company's type of operations and provide uniformity for the foreign subsidiaries. Atlas Copco was chosen, derived from the name of a Belgian subsidiary – Compagnie Pneumatique Commerciale. The decision was made in the autumn of 1955 to rename the company and work with the name change was begun in 1956.