In 1940, General Electric and American Locomotive Co. (Alco) concluded a sales and marketing agreement to manufacture diesel locomotives under the Alco-GE label. While World War Two prevented immediate building, the Alco-GE planning efforts continued.

In the 1940s, EMD's success with their "FT" freight diesels drove ALCo to develop their own streamlined freight locomotives. These diesels were developed around ALCo's new turbo-charged "244" prime mover, GE electricals and AAR type B trucks. As a result, the first FA/FB set was delivered to the GM&O in 1946. The 1500-h.p. FA1s and FB1s sold quickly, and were succeeded in 1950 by the up-powered FA2s and FB2s.

Also in 1946, Alco delivered their first streamlined passenger diesels to the Santa Fe. These 2000 h.p. units in cab/booseter configuration were later designated the PA/PB-1 type. Upgrades in 1950 resulted in the PA/PB-2 type. Some units were later rebuilt and poularly called PA/PB-4s