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Fiat was looking for a tractor to fit into their line as in HD10 size for a pipelayer machine for sale in Europe. AC/Fiat was suppose to be a joint venture with each group marketing and handling mixed products.
As dealer network was shakey they also pulled back on parts supplies and went to central wharehouse instead of regional making long waits for parts, this caused customer loyalty to waine and also dealers to drop the line. Also the fact of dealers in Ag products, or in the other two classes, could not order industrial parts or construction parts for local customers made parts hard to get.
Seems at the same time the AC marketing of their lines was not pushed hard and regional sales and dealer network was slipping. Then AC seemed to abandon the smaller equipment and moved into things of mining like the HD41, HD31, and filled the smaller line with their industrial lines . H4, HD4 , wheel loaders and in their TLB line it seems they never did push their products against Case and Ford.
Remember in this same timeframe IH dropped their construction line , selling to dresser Industries, JD started getting more into Construction equipment and the lines like Komatsu were being imported.
( all this is my perspective and understanding , not research )
A link to some history : http://www.ritchiewiki.com/wiki/index.php/Allis-Chalmers - http://www.ritchiewiki.com/wiki/index.php/Allis-Chalmers
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