American Locomotive production was halted in October when the company's ordnance and locomotive divisions went on strike. Production resumed in February when union leaders agreed to a pay raise. In December 1952 the Defense Department ordered cutbacks to M47 and M48 tank production. In November 1953 American Locomotive halted production of the M47 after operators found drive gear defects in Europe. Army officials quickly acknowledged the issue arose from their own expedient decision to use lower grades of steel to circumvent wartime shortages. Chrysler laid off about 1000 workers at Detroit Tank Arsenal when it wrapped up production in November. American Locomotive resumed production in November. The company closed its tank division in June 1954.