FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

   (Mark One)

           [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

           For the fiscal year ended December 31, 1996

           [  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

   For the transition period from                      to
   Commission file number 1-2199

                           ALLIS-CHALMERS CORPORATION
             (Exact name of registrant as specified in its charter)

   Delaware                                                        39-0126090
   (State or other jurisdiction of                           (I.R.S. Employer
   incorporation or organization)                         Identification No.)

   Box 512, Milwaukee, Wisconsin                                   53201-0512
   (Address of principal executive offices)                        (Zip code)

   Registrant's telephone number, including area code           (414)475-2000

        Securities registered pursuant to Section 12(b) of the Act:  None

           Securities registered pursuant to Section 12(g) of the Act:

                               Title of each class

                          Common Stock - $.15 Par Value


           Indicate by check mark whether the registrant (1) has filed all
   reports required to be filed by Section 13 or 15(d) of the Securities
   Exchange Act of 1934 during the preceding 12 months (or for such shorter
   period that the registrant was required to file such reports), and (2) has
   been subject to such filing requirements for the past 90 days. Yes  X   No

           Indicate by check mark if disclosure of delinquent filers pursuant
   to Item 405 of Regulation S-K is not contained herein, and will not be
   contained, to the best of registrant's knowledge, in definitive proxy or
   information statements incorporated by reference in Part III of this Form
   10-K or any amendment to this Form 10-K.     X

           Indicate by check mark whether the registrant has filed all
   documents and reports required to be filed by Sections 12, 13 or 15(d) of
   the Securities Exchange Act of 1934 subsequent to the distribution of
   securities under a plan confirmed by a court.  Yes   X   No

           At March 1, 1997 there were 1,003,028 shares of Common Stock
   outstanding.

                       DOCUMENT INCORPORATED BY REFERENCE

                                                Parts of Form 10-K Into Which
                                                  Portions of Document are
             Document                            Incorporated by Reference

   Annual Report to Shareholders                             Parts I and II
   for fiscal year ended
   December 31, 1996


   <PAGE>

                             1996 FORM 10-K CONTENTS


   PART I

                     Item                                       Page

             1.  Business.                                        3
             2.  Properties.                                      5
             3.  Legal Proceedings.                               5
             4.  Submission of Matters to a Vote of
                    Security Holders.                             7

   PART II
             5.  Market for Registrant's Common Equity
                    and Related Stockholder Matters.              8
             6.  Selected Financial Data.                         8
             7.  Management's Discussion and
                    Analysis of Financial
                    Condition and Results of Operations.          8
             8.  Financial Statements and
                    Supplementary Data.                           8
             9.  Changes in and Disagreements with
                    Accountants on Accounting and
                    Financial Disclosure.                         8

   PART III
           10.   Directors and Executive Officers
                    of the Registrant.                            9
           11.   Executive Compensation.                         12
           12.   Security Ownership of Certain
                    Beneficial Owners and
                    Management.                                  13
           13.   Certain Relationships and Related
                    Transactions.                                15

   PART IV
           14.   Exhibits, Financial Statement
                    Schedules and Reports on
                    Form 8-K.                                    16

   Signatures.                                                   21

   <PAGE>


                                     PART I


   ITEM 1.  BUSINESS.

   (a)  Development of the Business

   GENERAL

   Allis-Chalmers Corporation ("Allis-Chalmers" or the "Company") was
   incorporated in 1913 under Delaware law.  The Company sold its major
   operating businesses in 1988 in accordance with its First Amended and
   Restated Joint Plan of Reorganization (Plan of Reorganization) under
   Chapter 11 of the United States Bankruptcy Code.  The Plan of
   Reorganization was confirmed by the Bankruptcy Court on October 31, 1988
   after acceptance by creditors and shareholders and was consummated on
   December 2, 1988.  See Item 3. LEGAL PROCEEDINGS for a discussion of such
   proceedings.

   The Company has its principal executive office in West Allis, Wisconsin
   and it maintains three wholly-owned subsidiaries.  One subsidiary, Houston
   Dynamic Service, Inc., operates a machine repair business in Houston,
   Texas; the other two subsidiaries, KILnGAS R&D, Inc. and U.S. Fluidcarbon
   Inc., are inactive.

   On September 22, 1994, the Company sold its B.R.B. Industries division.
   B.R.B. Industries, which was acquired by the Company on December 20, 1989
   in a purchase of assets, is a Hoboken, New Jersey manufacturer of molded
   fabric products serving the apparel and lingerie markets and the home
   sewing and notions industries.

   (b)  Financial Information About Industry Segments

   The Company operates in a single industry segment -- the repair and
   service of mechanical rotating equipment for the industrial, utility and
   governmental aftermarkets.

   (c)  Narrative Description of Business

   The principal business activities of the Company are as follows:

   MACHINE REPAIR

   Sales of the machine repair business operated by Houston Dynamic Service,
   Inc. (HDS), a wholly-owned subsidiary of the Company, were $4,060,000 in
   1996, a 27% increase from 1995 sales, $3,190,000 in 1995 and $3,580,000 in
   1994.  The increase in sales from 1995 was primarily the result of strong
   market conditions coupled with a more focused marketing strategy and
   product offering.

   HDS services and repairs various types of mechanical equipment, including
   compressors (centrifugal, rotary, axial and reciprocating), pumps,
   turbines, engines, heat exchangers, centrifuges, rollers, gears, valves,
   blowers, kilns, crushers and mills.  Services provided include emergency
   repair, disassembly, inspection, repair testing, parts duplication,
   machining, balancing, metalizing, milling, grinding, boring, welding,
   modification, reassembly, field machining, maintenance, alignment, field
   service, installation, startup and training.

   HDS employed 38 people on December 31, 1996.  It operates out of a
   facility in Houston, Texas which was purchased by HDS in 1990.  The
   facility includes repair shop and office space.

   HDS serves various industrial customers, including those in the
   petrochemical, chemical, refinery, utility, waste and waste treatment,
   minerals processing, power generation, pulp and paper and irrigation
   industries.

   OTHER DATA

   Competition in the Company's machine repair business consists of nine
   major original equipment manufacturers (OEM) and numerous smaller
   independent competitors.  Many of these competitors have special strengths
   in certain product areas because of customer preferences for OEM suppliers
   or because specialized patented technologies are offered.  The principal
   methods of competition are price, quality, delivery, customer service and
   warranty.

   The principal raw materials and purchased components used in the machine
   repair business are alloy and stainless steels, castings and forgings,
   aluminum, copper, gears and other basic materials.  Alternative sources of
   supply exist or could be developed for all of these raw materials and
   components.  This business is highly labor intensive.

   Some of the Company's products, processes and systems are covered by
   patents owned by or licensed to the Company.  No particular product,
   process or system is dependent on a single fundamental patent, the loss of
   which would jeopardize the Company's businesses.  The Company licenses the
   use of a number of its trademarks, from which it receives income.

   In 1996 and 1995, Amoco Chemical was the only customer which accounted for
   10% or more of total Company sales -- Amoco Chemical generated 16% of 1996
   sales and 26% of 1995 sales.   In 1994, the Company had two customers
   which accounted for 10% or more of total sales --  Amoco Chemical
   generated 19% and Chevron Corporation generated 15%.

   Expenditures relating to compliance with federal, state and local
   environmental protection laws are not expected to have a material effect
   on the Company's capital expenditures, results of operations, financial
   condition or competitive position.  The Company is not aware of any
   present statutory requirements concerning environmental quality that would
   necessitate capital outlays which would materially affect the Company.  In
   conjunction with consummation of the Plan of Reorganization, the Company
   settled all known environmental claims asserted by the United States
   Environmental Protection Agency (EPA) as well as claims asserted by
   certain state agencies.  However, the EPA and third parties have claimed
   that Allis-Chalmers is liable for cleanup costs associated with certain
   hazardous waste disposal sites in which products manufactured and sold by
   Allis-Chalmers before consummation of the Plan of Reorganization were
   ultimately disposed of by others.  Since Allis-Chalmers manufactured and
   sold the products disposed of in these sites before consummation of the
   Plan of Reorganization, Allis-Chalmers has taken the position that all
   cleanup costs or other liabilities related to these sites were discharged
   in the bankruptcy.  See Item 3. LEGAL PROCEEDINGS.

   The Company's employment was 44, 34 and 41 at December 31, 1996, 1995 and
   1994, respectively.

   For more detailed information, the 1996 Consolidated Financial Statements,
   Notes to Consolidated Financial Statements and Management's Discussion and
   Analysis should be read in their entirety.

   (d)     Financial Information About Foreign and
           Domestic Operations and Export Sales

   The Company has no foreign operations or significant export sales.

   ITEM 2. PROPERTIES.

   The Company's principal operating facility is a repair shop and office
   building in Houston, Texas which is owned by HDS.  Allis-Chalmers leases
   its administrative offices in West Allis, Wisconsin on a short-term basis.
   The facilities are considered adequate and suitable for the Company's
   principal business.


   ITEM 3.  LEGAL PROCEEDINGS.

   REORGANIZATION PROCEEDINGS UNDER CHAPTER 11
   OF THE UNITED STATES BANKRUPTCY CODE

   On June 29, 1987 Allis-Chalmers and 17 of its domestic subsidiaries filed
   separate voluntary petitions for reorganization under Chapter 11 of the
   United States Bankruptcy Code.  The Plan of Reorganization was confirmed
   by the Bankruptcy Court on October 31, 1988 after acceptance by creditors
   and shareholders, and the Plan of Reorganization was consummated on
   December 2, 1988.

   At confirmation, the Bankruptcy Court approved the establishment of the A-
   C Reorganization Trust as the primary vehicle for distributions under the
   Plan of Reorganization, two trust funds to service health care and life
   insurance programs for retired employees and a trust fund to process and
   liquidate future product liability claims.  Cash of approximately $400
   million and other assets with a net book value of $38 million were
   distributed to creditors or transferred to the trusts, and the trusts
   assumed responsibility for substantially all remaining cash distributions
   to be made to holders of claims and interests pursuant to the Plan of
   Reorganization.  The Company was thereby discharged of all debts that
   arose before confirmation of the Plan of Reorganization, and all of its
   capital stock was canceled and made eligible for exchange for shares of
   the reorganized Company.

   The Company does not administer any of the aforementioned trusts and
   retains no responsibility for the assets transferred to or distributions
   to be made by such trusts pursuant to the Plan of Reorganization.

   For a description of restrictions on the transfer of the common stock of
   the reorganized Company (Common Stock), see Item 5. MARKET FOR
   REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.


   ENVIRONMENTAL PROCEEDINGS

   As part of the Plan of Reorganization the Company made a cash payment of
   $4.5 million to the EPA in settlement of the EPA's claims for cleanup
   costs at all sites where the Company was alleged to have disposed of
   hazardous waste.  The EPA settlement included both past and future cleanup
   costs at these sites and released the Company of liability for claims of
   contribution or indemnity which may be asserted by other potentially
   responsible parties against Allis-Chalmers in connection with these
   specific sites.

   In addition to the EPA settlement, the Company negotiated settlements of
   various environmental claims which had been asserted by certain state
   environmental protection agencies.  These settlements, totaling
   approximately $200,000, were approved by the Bankruptcy Court.

   Since consummation of the Plan of Reorganization on December 2, 1988, a
   number of parties, including the EPA, have asserted that the Company is
   responsible for the cleanup of hazardous waste sites.  These assertions
   have been made only with respect to the Company's prebankruptcy
   activities.  No claims have been asserted against the Company involving
   its postbankruptcy operations.

   Before the settlement with the EPA in the bankruptcy proceedings, an
   attempt was made by the parties to identify all possible hazardous waste
   disposal sites and to settle all liabilities relating to those sites.
   Notwithstanding the breadth of the settlement, various EPA regional
   offices have continued to assert cleanup claims against Allis-Chalmers
   with respect to several sites.  Apparently, not all offices of the EPA are
   aware of the settlement agreement, since at least two of these claims
   involve sites with respect to which the EPA specifically agreed not to
   sue.

   Certain other parties have asserted that the Company is responsible for
   environmental cleanup costs or associated EPA fines in connection with
   additional sites.  In each instance the Company activities complained of
   occurred prior to the Company's bankruptcy proceedings and the third
   parties did not file proofs of claim in the bankruptcy proceedings.  The
   filing of such proofs of claim is required by the Bankruptcy Code to
   effect a claim against a Chapter 11 debtor.  A bankruptcy discharge
   defense has been asserted by the Company in each instance.

   Although the law in this area is still somewhat unsettled, three Federal
   Courts of Appeal have held that a debtor can be discharged of
   environmental cleanup liabilities related to its prebankruptcy activities.
   The Company believes it will prevail in its position that its liability to
   the EPA and third parties for prebankruptcy environmental cleanup costs
   has been fully discharged.  In one particular site, the EPA's Region III
   has concurred with the Company's position that claims for environmental
   cleanup were discharged pursuant to the bankruptcy.  While each site is
   unique with different circumstances, the Company has notified other
   Regional Offices of the EPA of this determination associated with the
   Region III site.  The Company has not received responses from the other
   Regional offices.

   The EPA and certain state agencies also continue to request information in
   connection with various waste disposal sites in which products
   manufactured by Allis-Chalmers before consummation of the Plan of
   Reorganization were ultimately disposed of by other parties.  Although the
   Company has been discharged of liabilities with respect to hazardous waste
   sites, it is under a continuing obligation to provide information with
   respect to its products to federal and state agencies.  The A-C
   Reorganization Trust, under its mandate to provide Plan of Reorganization
   implementation services to the Company, has responded to these
   informational requests because prebankruptcy activities are involved.


   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

   Not applicable.

                                     PART II


   The information required by Items 5, 6, 7 and 8 of Part II is incorporated
   by reference to the Company's 1996 Annual Report to Shareholders as
   follows:

       Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS - page 4 of 1996 Annual Report to
           Shareholders.

       Item 6.  SELECTED FINANCIAL DATA - page 5 of 1996 Annual Report to
           Shareholders.

       Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS - pages 6 through 10 of
           1996 Annual Report to Shareholders.

       Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - pages 11
           through 26 of 1996 Annual Report to Shareholders.

       Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE

           None.

                                    PART III


   ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

   (a) Identification of Directors

       The following individuals were elected as directors of the Company at
       the meeting of shareholders on October 25, 1989 (or have been
       appointed to fill vacancies caused by the resignation of two such
       directors) to serve until the next meeting of shareholders.

       John R. Collins, age 69, a director since December 1988.  Mr. Collins
       retired in 1989 after serving since 1985 as Administrative Assistant
       to the Secretary-Treasurer of International Union, United Automobile,
       Aerospace & Agricultural Implement Workers of America -- UAW.

       John T. Grigsby, Jr., age 56, a director since December 1988.
       Mr. Grigsby has been a Vice Chairman of the Board of the Company
       since May 1989, an Executive Vice President since October 1989 and
       Chief Financial Officer since January 1996, having previously served
       since December 1988 as the Company's Chairman and Chief Executive
       Officer.  Prior to that time and since July 1987, Mr. Grigsby was
       employed by the Company as Managing Director, Restructure Project.
       Mr. Grigsby also serves as the A-C Reorganization Trustee, as
       President of Thomson McKinnon Securities, Inc. during winddown and
       liquidation of its affairs and President and Chief Executive Officer
       of N.W. Liquidating, Inc.  He has been a director of 1st Southern
       Bank of Boca Raton, Florida since September 1987 and First Florida
       Industries, Inc. since July 1985.

       H. Sean Mathis, age 49, a director since December 1988.  Mr. Mathis
       was elected as Chairman and Chief Executive Officer of the Company on
       January 16, 1996 and prior thereto, Mr. Mathis served as a Vice
       President of the Company since July, 1989.  Mr. Mathis acted as the
       Federal Court Appointed Trustee for International Wire News Service
       Liquidation Corp., formerly United Press International (UPI), from
       August 1992 to May 1994.  From November 1991 to July 1992, he served
       as Vice Chairman and a Director of UPI (then a news syndication
       service).  Mr. Mathis was President and Chief Operating Officer of
       Ameriscribe Corporation, New York from May 1990 to October 1993 and
       is currently President and a Director of Universal Gym Equipment,
       Inc.  From 1993 to 1995 Mr. Mathis was President and a Director of
       RCL Capital Corporation.  He is also a Director of USTrails Inc., a
       private company, Allied Digital Technologies Corp. and Canadians
       Corp.

       Claude D. Montgomery, age 44, a director since December 1988.  Since
       November 1996, Mr. Montgomery has been a partner in Phillips Lytle
       Hitchcock Blaine & Huber, a law firm.  From June 1993 to October
       1996, Mr. Montgomery was a director and shareholder in Marcus
       Montgomery P.C., a law firm, formerly known as Marcus Montgomery
       Wolfson P.C.  Mr. Montgomery was a director and shareholder in Varet,
       Marcus & Fink P.C., formerly known as Milgrim, Thomajan & Lee P.C.,
       attorneys, New York, from August 1989 through June 1993.  Mr.
       Montgomery was a founding partner of Myerson & Kuhn, attorneys, New
       York, from January 1988 to July 1989.  Prior to that time and since
       1984, he was a founding partner of Booth, Marcus & Pierce, attorneys,
       New York.

       Robert E. Nederlander, age 63, a director since May 1989.
       Mr. Nederlander was elected by the Board of Directors on November 16,
       1993 to serve as a Vice Chairman of the Board, having previously
       served as Chairman of the Board and Chief Executive Officer of the
       Company since May 1989.  He resigned as Vice Chairman on October 18,
       1996.  He is also President and director of Nederlander Organization,
       Inc., New York, an owner and operator of one of the world's largest
       chains of  theaters, since November 1981; President of  Nederlander
       Television and Film Productions, Inc. since October 1985; Partner in
       New York Yankees Baseball Club since 1973 and Managing General
       Partner from September 13, 1990 through December 31, 1991; director
       and Chairman of the Board of  Riddell Sports, Inc. since April 1988;
       Chairman of the Board of MEGO Financial Corporation since January
       1988; and a director of MEGO Mortgage Corp., News Communications,
       Inc. and HFS Incorporated since 1995.

       John E. Sundman, age 70, a director since December 1988.  Mr. Sundman
       retired in December 1991 as Vice President of Corcap, Inc., Hartford,
       Connecticut, a position which he held since July 1988, when Corcap
       was spun off by Lydall, Inc., Manchester, Connecticut.  Prior to that
       time and since April 1978, he was Vice President, Chief Financial
       Officer and a director of Lydall, Inc.  He remains a director of
       Corcap, Inc.

       Allan R. Tessler, age 60, a director since September 1992.  Mr.
       Tessler served as Chairman of the Board and Chief Executive Officer
       of the Company from November 1993 until January 1996.   Mr. Tessler
       is Chairman of the Board and Chief Executive Officer of International
       Financial Group, Inc. since 1987; and Co-Chief Executive Officer of
       Data Broadcasting Corporation since June 1992.  Mr. Tessler is also
       Chairman of the Board of  Enhance Financial Services Group, Inc. and
       Jackpot Enterprises, Inc. and director of The Limited, Inc.

       Leonard Toboroff, age 63, a director since May 1989.  Mr. Toboroff
       has been a Vice Chairman of the Board and an Executive Vice President
       of the Company since May 1989; a director and Vice Chairman of
       Riddell Sports, Inc. from April 1988 to the present; a practicing
       attorney continuously since 1961 to the present; a director since
       August 1987 and former Chairman and Chief Executive Officer from
       December 1987 to May 1988 of Ameriscribe Corporation; and formerly a
       director, Chairman and Chief Executive Officer from May 1982 through
       June 1982 and Vice Chairman June 1982 through September 1988 of
       American Bakeries Company.  Mr. Toboroff is also a director of Banner
       Aerospace, Inc. and Saratoga Beverage, Inc.

   (b) Identification of Executive Officers

   Name, Age as of March 1,
     1997, and Position                   Business Experience

   H. Sean Mathis, 49,                    See Item 10, subsection (a) above.
   Chairman of the Board and
   Chief Executive Officer

   Leonard Toboroff, 63,                  See Item 10, subsection (a) above.
   Vice Chairman of the Board
   and Executive Vice
   President

   John T. Grigsby, Jr., 56,              See Item 10, subsection (a) above.
   Vice Chairman of the Board,
   Executive Vice President and
   Chief Financial Officer

   Jeffrey I. Lehman, 47,                 Mr. Lehman commenced his employment
   Treasurer                              with Allis-Chalmers and was elected
                                          to his current position in
                                          February, 1996.  Since 1991, Mr.
                                          Lehman has been employed by the A-C
                                          Reorganization Trust and Thomson
                                          McKinnon Securities during winddown
                                          and liquidation of their affairs.
                                          He has also provided financial
                                          consultation since 1985.

   William L. Vaitl, 63,                  Mr. Vaitl commenced his employment
   Secretary & Assistant Treasurer        with Allis-Chalmers in July 1962
                                          serving in a number of management
                                          positions including Assistant
                                          Treasurer.  In December 1988 to the
                                          present, Mr. Vaitl commenced
                                          employment with the A-C
                                          Reorganization Trust.  In February
                                          1996, he was reappointed Assistant
                                          Treasurer and in April 1997,
                                          elected as corporate Secretary.


   (c)  Identification of Certain Significant Employees

        None

   (d)  Family Relationships

        None

   (e)  Business Experience

        See this Item 10, subsections (a) and (b) above.

   (f)  Involvement in Certain Legal Proceedings

        None

   (g)  Promoters and Control Persons

        Not applicable


   ITEM 11.  EXECUTIVE COMPENSATION.

   EXECUTIVE COMPENSATION

   No executive officer earned in excess of $100,000 in 1996.  Allan R.
   Tessler and H. Sean Mathis who served as Chairman of the Board and Chief
   Executive Officer in 1995 and 1996, respectively, received no
   compensation.  Mr. Tessler resigned from these positions on January 16,
   1996.

   LONG-TERM STOCK INCENTIVE PLAN

   The Company's Long-Term Stock Incentive Plan (1989), adopted by the
   shareholders at the 1989 shareholders meeting, provides for grants to
   officers and key employees of stock options, stock appreciation rights,
   performance shares, restricted stock, restricted stock units and other
   stock-based awards.  The maximum number of shares which may be granted
   with respect to stock-based awards is 50,000.  Options to purchase shares
   may be granted at prices equal to not less than the fair market value at
   the date of grant, except that options to purchase up to 13,333 shares may
   be granted at a price which is not less than the fair market value on
   October 25, 1989, the date on which the Stock Incentive Plan was approved
   by shareholders.  Options are exercisable within a period not to exceed 10
   years from date of grant.  Stock appreciation rights allow the holder to
   receive the difference between the exercise price and the fair market
   value of the stock at the date of exercise in cash or shares of common
   stock.  No stock options or stock appreciation rights have been granted to
   date.

   RETIREMENT PLAN

   The Allis-Chalmers Consolidated Pension Plan covers 6 active employees at
   the beginning of 1997.  The Retirement Plan is a tax qualified defined
   benefit pension plan.  Effective March 31, 1987, the Retirement Plan was
   capped and frozen, without further increase in benefits provided by the
   Company after that date.

   The retirement benefits paid under this plan are before any adjustment for
   a surviving spouse's pension and are not subject to Social Security offset
   or other deductions.

   SAVINGS PLAN

   The Company's Savings Plan was initiated in 1968.  The Savings Plan
   permits the Company to contribute in its discretion cash or stock to
   participants' accounts.  However, on June 1, 1985 the Company discontinued
   contributions to the Savings Plan.  Employees may terminate voluntary
   participation in certain portions of the Savings Plan and withdraw their
   voluntary after tax contributions at any time.  However, there are
   restrictions on withdrawals of the Company matching contributions.

   Upon retirement, death or other termination of employment, employee
   account balances generally may be withdrawn in lump sum or in
   installments.  Withdrawal of contributions is also permitted for defined
   hardships.

   During 1996 contributions by Company participants to the Savings Plan
   under Section 401(k) of the Internal Revenue Code totaled $49,204.  At
   December 31, 1996 there were a total of 234 participants in the Savings
   Plan, of whom 17 were active employees of the Company.

   COMPENSATION OF DIRECTORS

   Since December 1, 1990, the annual retainer for services as a director
   (previously $13,500 per year) has been suspended, the attendance fee for
   each Board meeting attended was reduced from $425 to $100 and the
   attendance fee for each Committee meeting was suspended.

   TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT

   None.


   ITEM 12.  SECURITY OWNERSHIP OF CERTAIN
             BENEFICIAL OWNERS AND MANAGEMENT.

   (a) Security Ownership of Certain Beneficial Owners

       The following table lists the beneficial ownership with respect to
       all persons known to the Company to be the beneficial owner of more
       than 5% of the Company's Common Stock as of March 1, 1997.


                                 Amount and Nature        Percent of
      Name and Address             of Ownership              Class

   AL-CH Company, L.P., 810
   Seventh Avenue, New York,
   NY  10019 (includes shares
   held by Messrs. Nederlander
   and Toboroff as described
   below)                              407,251(1)             40.6%

   Wells Fargo Bank, P.O. Box
   60347, Los Angeles, CA  90060,
   Trustee under that certain
   Amended and Restated Retiree
   Health Trust Agreement for
   UAW Retired Employees of
   Allis-Chalmers Corporation          136,406                13.6%

   Firstar Trust Company,
   777 East Wisconsin Avenue,
   Milwaukee, WI  53202, Trustee
   under that certain Amended and
   Restated Retiree Health Trust
   Agreement for Non-UAW Retired
   Employees of Allis-Chalmers
   Corporation                         101,977                10.2%

   (1) Messrs. Nederlander and Toboroff are beneficial owners of and have
       shared voting power and shared dispositive power over the 407,251
       shares of common stock held by AL-CH Company, L.P., a Delaware
       limited partnership, of which the general partners are Q.E.N., Inc.,
       a Michigan corporation controlled by Mr. Nederlander, and Lenny
       Corp., a Delaware corporation controlled by Mr. Toboroff.  Mr. Allan
       R. Tessler is a limited partner in AL-CH Company, L.P.

   (b) Security Ownership of Management

       The following table sets forth the number of shares of common stock
       of the Company beneficially owned as of March 1, 1997 by directors,
       and all directors and executive officers as a group.  Except as
       otherwise noted in the footnotes, the persons listed have sole voting
       and investment power over the shares beneficially owned.


                                     Amount and Nature          Percent of
         Name                          of Ownership                Class

   John R. Collins                             0                        *
   John T. Grigsby, Jr.                    9,535                     1.0%
   H. Sean Mathis                              0                        *
   Claude D. Montgomery                    533(1)                       *
   Robert E. Nederlander               407,251(2)                 40.6%(2)
   John E. Sundman                         3,333                        *
   Allan R. Tessler                            0                        *
   Leonard Toboroff                    407,251(2)                 40.6%(2)

   All directors and
   officers as a group
   (nine persons)                        420,652                    42.0%

   *less than 1%

   (1) Shares are owned beneficially by Mr. Montgomery's spouse as to which
       he disclaims beneficial ownership.

   (2) Messrs. Nederlander and Toboroff are beneficial owners of and have
       shared voting power and shared dispositive power over the 407,251
       shares of common stock held by AL-CH Company, L.P., a Delaware
       limited partnership, of which the general partners are Q.E.N., Inc.,
       a Michigan corporation controlled by Mr. Nederlander, and Lenny
       Corp., a Delaware corporation controlled by Mr. Toboroff.  Mr. Allan
       R. Tessler is a limited partner in AL-CH Company, L.P.

   (c) Changes in Control

       None


   ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

   (a) Transactions with Management and Others

       None

   (b) Certain Business Relationships

       None

   (c) Indebtedness of Management

       None

   (d) Transactions with Promoters

       Not applicable


                                     PART IV


   ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
             AND REPORTS ON FORM 8-K.


   (a) The Selected Financial Data, Management's
       Discussion and Analysis and the Company's
       financial statements, together with the
       report thereon of Price Waterhouse LLP,
       appearing on pages 5 through 26 of the
       Company's 1996 Annual Report to Shareholders,
       are incorporated by reference in this Annual
       Report on Form 10-K.  With the exception of
       the aforementioned information, the 1996
       Annual Report to Shareholders is not deemed
       to be filed as part of this report.  The
       schedule to the financial statements listed
       below should be read in conjunction with the
       financial statements in such 1996 Annual Report
       to Shareholders.  Financial statement schedules
       not included in this Form 10-K Annual Report
       have been omitted because they are not
       applicable or the required information is shown
       in the financial statements or notes thereto.

       Allis-Chalmers Corporation and Consolidated
       Subsidiaries - Schedule to Financial Statements:


            II.  Valuation and Qualifying Accounts.         Page 19

       Report of Independent Accountants on
       Financial Statement Schedule.
                                                            Page 20

   (b) Reports on Form 8-K.  There were no reports
       on Form 8-K filed in the fourth quarter of 1996.
       However, the Company filed a Form 8-K dated
       February 14, 1997 to report (under Item 5.) that
       it filed with the PBGC to initiate the
       termination of the Consolidated Plan.

   (c) Exhibits:

       2f.1.  First Amended Disclosure Statement
       pursuant to Section 1125 of the Bankruptcy Code,
       which includes the First Amended and Restated
       Joint Plan of Reorganization dated September 14, 1988
       (incorporated by reference to the Company's Report
       on Form 8-K dated December 1, 1988).

       3.1.   Amended and Restated Certificate of
       Incorporation of Allis-Chalmers Corporation
       (incorporated by reference to the Company's
       Report on Form 8-A dated August 12, 1992).

       3.2.   By-laws of Allis-Chalmers Corporation
       (incorporated by reference to the Company's
       Report on Form 8-A dated August 12, 1992).

       10.1.  Amended and Restated Retiree Health
       Trust Agreement between Allis-Chalmers
       Corporation and Wells Fargo Bank (incorporated
       by reference to Exhibit C-1 of the First Amended
       and Restated Joint Plan of Reorganization dated
       September 14, 1988 included in the Company's
       Report on Form 8-K dated December 1, 1988).

       10.2.  Amended and Restated Retiree Health
       Trust Agreement between Allis-Chalmers
       Corporation and Firstar Trust Company
       (incorporated by reference to Exhibit C-2
       of the First Amended and Restated Joint Plan
       of Reorganization dated September 14, 1988
       included in the Company's Report on Form 8-K
       dated December 1, 1988).

       10.3.  Reorganization Trust Agreement between
       Allis-Chalmers Corporation and John T. Grigsby, Jr.,
       Trustee (incorporated by reference to Exhibit D
       of the First Amended and Restated Joint Plan of
       Reorganization dated September 14, 1988 included
       in the Company's Report on Form 8-K dated
       December 1, 1988).

       10.4.  Product Liability Trust Agreement between
       Allis-Chalmers Corporation and Bruce W. Strausberg,
       Trustee (incorporated by reference to Exhibit E
       of the First Amended and Restated Joint Plan of
       Reorganization dated September 14, 1988 included
       in the Company's Report on Form 8-K dated
       December 1, 1988).

       10.5.* Allis-Chalmers Corporation Long-Term
       Stock Incentive Plan (1989) (incorporated by
       reference to the Company's Report on Form 10-Q
       for the three months ended September 30, 1989).

       10.6.  Subscription and Shareholder Agreement
       between Allis-Chalmers Corporation and AL-CH
       Company, L.P. dated May 18, 1989 (incorporated
       by reference to the Company's Report on Form 8-K
       dated May 24, 1989).

       10.7.  Commercial Installment Loan Agreement
       by and between Allis-Chalmers Corporation and
       Marine Midland Bank, N.A., dated as of
       December 20, 1989 (incorporated by reference
       to the Company's Report on Form 8-K dated
       December 20, 1989).

       10.8.* Employment Agreement between Allis-Chalmers
       Corporation and John T. Grigsby, Jr. (incorporated
       by reference to the Company's Report on Form 10-Q
       for the three months ended September 30, 1989).

       10.9.  Asset Purchase Agreement by and between
       Allis-Chalmers Corporation, B.R.B. Industries,
       Inc., Jack Ehrenhaus and Fredric Allen dated
       as of November 7, 1989 (incorporated by
       reference to the Company's Report on Form 8-K
       dated December 20, 1989).

       10.10.*Allis-Chalmers Savings Plan
       (incorporated by reference to the Company's
       Report on Form 10-K for the year ended
       December 31, 1988).

       10.11.*Allis-Chalmers Consolidated
       Pension Plan (incorporated by reference to
       the Company's Report on Form 10-K for the
       year ended December 31, 1988).

       10.12. Asset Purchase Agreement by and
       between Allis-Chalmers Corporation and BRB
       Industries Corp. dated as of August 4, 1994,
       and amended by and among Allis-Chalmers
       Corporation, BRB Industries Corp.
       and Power Manufacturing, Inc. as of
       September 22, 1994 (incorporated by reference
       to the Company's Report on Form 8-K
       dated September 22, 1994).

       13.1.  1996 Annual Report to Shareholders
       of Allis-Chalmers Corporation (only those
       portions of such Annual Report that are
       incorporated by reference in this
       Report on Form 10-K are deemed filed herewith).

       21.1.  Subsidiaries of Allis-Chalmers Corporation.

       27.1.  Financial Data Schedule.

       *A management contract or compensatory plan or arrangement.

   <PAGE>

   <TABLE>
   ALLIS-CHALMERS CORPORATION AND CONSOLIDATED SUBSIDIARIES
   SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
   FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

   <CAPTION>

                                                             (thousands)

                                     Balance at                                                                      Balance
      Year Ended                      Beginning                                                                     at Close
   December 31, 1994                 of Period                Additions                 Deductions                 of Period
   <S>                            <C>                    <C>                      <C>                            <C>

   Doubtful receivables           $         249          $           73           $              3               $       319


   Plant rearrangement            $          68          $            0           $              0               $        68
                                  -------------            ------------               ------------                ----------
   Restructure costs                         48                       0                         48                         0
                                  -------------            ------------               ------------                ----------

                                  $         116          $            0           $             48               $        68
                                  =============            ============               ============                ==========
   <CAPTION>

                                     Balance at                                                                      Balance
      Year Ended                      Beginning                                                                     at Close
   December 31, 1995                 of Period                Additions                 Deductions                 of Period

   Doubtful receivables           $         319          $            0            $            13               $       306

   Plant rearrangement           $           68          $            0           $              0              $         68
                                   ------------             -----------                -----------                ----------

   <CAPTION>

                                     Balance at                                                                      Balance
      Year Ended                      Beginning                                                                     at Close
   December 31, 1996                 of Period                Additions                 Deductions                 of Period

   Doubtful receivables           $         306         $             0           $          276(a)             $         30

   Plant rearrangement           $           68         $             0            $            68             $           0
                                   ------------             -----------                 ----------                ----------


   (a) Includes writeoff of uncollectible receivables, less recoveries.

   </TABLE>

   <PAGE>

                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE



   To the Board of Directors
   of Allis-Chalmers Corporation


   Our audits of the consolidated financial statements referred to in our
   report dated March 24, 1997 appearing in the 1996 Annual Report to
   Shareholders of Allis-Chalmers Corporation (which report and consolidated
   financial statements are incorporated by reference in this Annual Report
   on Form 10-K) also included an audit of the Financial Statement Schedule
   listed in Item 14(a) of this Form 10-K.  In our opinion, this Financial
   Statement Schedule presents fairly, in all material respects, the
   information set forth therein when read in conjunction with the related
   consolidated financial statements.



   PRICE WATERHOUSE LLP

   Milwaukee, Wisconsin
   March 24, 1997

   <PAGE>

                                   SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
   Exchange Act of 1934, as amended, the registrant has duly caused this
   report to be signed on its behalf by the undersigned, thereunto duly
   authorized.

                                      Allis-Chalmers Corporation



                                      /s/John T. Grigsby, Jr.
                                      John T. Grigsby, Jr.
                                      Vice Chairman, Executive Vice
                                      President and Chief Financial Officer
                                      Date:  March 15, 1997


   Pursuant to the requirements of Section 13 or 15(d) of the Securities
   Exchange Act of 1934, as amended, this report has been signed on March 15,
   1997 by the following persons on behalf of the registrant and in the
   capacities indicated.



   /s/H. Sean Mathis                           /s/Robert E. Nederlander
   H. Sean Mathis                              Robert E. Nederlander,
   Chairman of the Board,                      Director
   Chief Executive Officer
   and Director



   /s/ John R. Collins                         /s/John E. Sundman
   John R. Collins, Director                   John E. Sundman, Director



   /s/John T. Grigsby, Jr.                     /s/Allan R. Tessler
   John T. Grigsby, Jr. Director               Allan R. Tessler, Director



   /s/Claude D. Montgomery                     /s/Leonard Toboroff
   Claude D. Montgomery, Director              Leonard Toboroff, Director

<PAGE>

                                 EXHIBIT INDEX

   13.1.     1996 Annual Report to Shareholders of Allis-Chalmers
             Corporation (only those portions of such Annual Report
             that are incorporated by reference in this Report on
             Form 10-K are deemed filed herewith).

   21.1.     Subsidiaries of Allis-Chalmers Corporation.

   27.1.     Financial Data Schedule.

<PAGE>