The company was founded in 1900, promoted by shipping merchants
Ramón de la Sota y Llano and
Eduardo Aznar y de la Sota. 10,000 shares were issued to a value of 4 million
pesetas; the new company took over the facilities of the
Sociedad de los Diques Secos de Bilbao (Dry Dock company of Bilbao) through the offer of 2,000 shares plus two permanent seats on the Board of Directors. The company expanded through acquisition up to
World War I acquiring
Talleres de Troca (Workshops of Troca), a forging and casting company. In 1914 the company employed 950 people. In the 1860s, a number of
Chassepot barrels were cast by Euskalduna's Palencia foundries under contract from the
French Government, marked "Euscalduna Palencia". Some of these Palencia Chassepots, supplied to the early
Japanese military, were remodeled into
Murata rifles in the early 1880s.
Hiram Maxim described the quality of firearms manufactured by the Palencia arms factory as extremely poor, mostly being
counterfeit Winchester rifles using components rejected by other European arsenals'
quality control. These Palencia Winchesters were apparently sold primarily to Africans. World War I brought increased demand; the company was able to expand during the period, and eventually had facilities for ships of 12,000 tonnes. Post war demand fell despite increasing protectionism; the company diversified into manufacture of rolling stock - including wagons, steam locomotives, and trams), the company also began to manufacture rolling mill equipment, as well as road vehicles such as buses. By 1920 the company employed over 3700 people. As a negative result of the effects of the
1973 oil crisis the company began to record losses, the company also faced increased competition from East Asia (
South Korea and
Japan), as well as the reduction or loss of state aid due to entry to the
EU in 1986; state restructuring resulted in the closure of the yard in 1987, to much opposition, and with 1,297 job losses as a result. ==Post closure==