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Another post today by Jason Shron, Rapido Trains founder ….
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China Factory Closure
Many of you have heard the news by now that a major factory that produces model trains in China has shut down with very little notice. Affatech was owned by K.K. Ku (who used to live near me in Toronto) and he made models for many North American and European manufacturers. We found out about it accidentally as our junior production manager used to work at Affa and still knows everyone there. We have already reached out to some of the manufacturers affected and have offered the use of our factories.
This is not the first time a closure like this has happened and it won't be the last. Businesses all over the world shut down for a variety of reasons. In this case, K.K. was ready to retire and his kids didn't want to take over the business.
In light of this, I want to dispel some of the myths about production in China. Regular readers will know most of this already.
1. We can't bring production back here.
The industry of super-detailed model trains was entirely home-grown. Home grown in Dongguan, China, that is. It never existed here. If you're about to shout "Kadee" tell me how many locomotives they bring out. And if you're about to shout "Micro-Trains" or "Accurail" tell me how many parts are assembled on their models compared to the super-detailed models made in China. These jobs can't come back to the USA or Canada because they never existed here.
2. This has nothing to do with tariffs.
There are currently no duties on model trains, which are classified as toys. If tariffs are placed on toys made in China, everyone's Christmas shopping bill will increase by 25%, and it will likely cause a revolution on the streets of America. I doubt that any tariffs will be placed on toys, and I hope for all our sakes that I am right. It would cost hundreds of thousands of American jobs, including the jobs of most hobby store employees. If you are worried about it, I suggest you write to your local Congressman or Congresswoman and express your concerns. Remember - they work for you.
3. Have no worries.
Back in 2007 Rapido lost its factory, but in that case the owner stole the money and ran away. We eventually got our moulds out of the locked building. It was stressful and difficult but we got through it. The same will happen with the manufacturers affected now. If these guys got through the recession, they will get through this hiccup. Rapido's two factories are still open and we're expanding to meet the expected surge in demand. There are plenty of other factories in China that can make the models as well. So have no fear - the industry is not yet in dire peril!
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The letter that was posted on the door at Affa last month. (Can anyone translate it? 
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