In 1962, the English Electric Company Ltd amalgamated the locomotive-building activities of their already-owned Vulcan Foundry (Newton-le-Willows Works) and its subsidiary Robert Stephenson & Hawthorns (Darlington Works), and W. G. Bagnall Ltd (Castle Engine Works, Stafford) under one management and a new wholly-owned subsidiary was formed named English Electric Traction. W. G. Bagnall Ltd was bought from W H Dorman in 1962 and effectively closed. The RSH works at Darlington ceased vehicle building in 1964. Vulcan Foundry was left as the only site for in-house locomotive building at the end of this period of contraction and rationalisation. It also took over manufacture (from Preston) of the range of EE diesel engines for railway locomotive use under the EE Diesels name.

English Electric Traction initially operated from two Works to produce electrical equipment for locomotives and multiple-unit trains. These were in Preston (Strand Road, formerly Dick Kerr Works), and Bradford (Phoenix Dynamo Works). The Bradford works had done design work and manufacture of control gear as part of EE since 1930, but this activity was rationalised after 1962 and incorporated into the Preston operation by 1967, when the transfer of design engineering and commercial activities and staff was completed.

The Preston works became the HQ centre for traction equipment (both control gear and motors), scheme design, building and testing. This equipment was sent to independent vehicle builders, to vehicle-builders in-house (i.e. at Vulcan Foundry or RSH), to overseas constructors, or to the British Rail workshops. The EE Stafford works was only engaged in traction activity is a minor way, principally as in-house supplier of main transformers and tap-changers, e.g. for 25kV locomotives, and some research and development activities on HV equipment. It was never part of EE Traction itself.

The EE-AEI agreement, in the early sixties, resulted in joint electric loco production, for British Rail (Class 86), Poland, Pakistan and South Africa - 5E's were EE, 5E1's MV and after that joint production of electrical equipment with build of the mechanical parts in South Africa. English Electric Traction merged with AEI Traction Division in 1969 to form English Electric - AEI Traction, which subsequently became GEC Traction in 1972.