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I hope this isn't truly terrible news …..

"Atlas has received notification from one of our locomotive and rolling stock suppliers that they have closed their factory. (Please note Atlas track and accessories are NOT affected by this delay.) Atlas is currently working with our network of suppliers to transfer the projects to others for completion. This will cause a delay in some previously ordered products. We apologize for this delay, thank you for your continued support, and will update you with more information as it becomes available. "

ATLAS

There was a general announcement (not manufacturer specific) on social media, with possibly more details about the factory. I'm not on F.B. or anything, anyone here have it?

I'm pulling for ya Atlas …..  we're all in this together.

Last edited by CNJ Jim
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Dennis LaGrua posted:

Absolutely great news and a new opportunity for the factory to return to Hillside NJ.

"Atlas is currently working with our network of suppliers to transfer the projects to others for completion."

In other words, not moving back to Hillside.

What I wonder is:  Was this factory dedicated solely to Atlas or are other companies also affected?

Rusty

EBT Jim posted:

Trying to find out if this concerns O or HO. Either way …. stinks.

Unfortunately it seems to be the norm there in China Manufacturing. Approximately every 5-7 years one shuts down and another opens up somewhere else. The trick is to get access to your tooling and move it completely to another manufacturing factility.  You [American importer] also hope that no one else has taken it and secretly made your items to be sold by someone else because after all, the government of China owns 53 percent of " your stuff" in their country!

 

Last edited by prrhorseshoecurve
Dennis LaGrua posted:

Absolutely great news and a new opportunity for the factory to return to Hillside NJ.

AS Much as I like the garden state, forget NJ to start up any mfg. here! This tax and spend administration does NOT make it viable for businesses. you might as well set up shop in PA or DE and save some dough!

Really?  Paid Family leave! You are lucky yo get a health care plan and matching in your 401k [if you even have one or are eligible for one] within a year!

Last edited by prrhorseshoecurve
Jim Waterman posted:

I can just see it now, a couple of hundred employees each running out the back door with a couple of pieces of production tooling. 

 

Something much like this happened in the plastic kit industry. One manufacture went under/closed. Tooling was to be transferred to another shop. Some vital tooling met with an accident and was beyond use.  This with some other events ended up with the company being sold. FYI

prrhorseshoecurve posted:

  You [American importer] also hope that no one else has taken it and secretly made your items to be sold by someone else because after all, the government of China owns 53 percent of " your stuff" in their country!

 

And there is the biggest ignored issue with manufacturing in China. I've worked with manufactures in China and they did good work. BUT this deal where China is the majority partner, like it or not, in your business is a bomb waiting to explode.  If you study up on the Chinese '100 year plan' it will reveal their end game.....if we keep playing along. 

"That's not the case for Mike Wolf. How does he manage too keep the same factory?"

I'm pretty sure that isn't entirely correct.  There was Samhongsa in Korea, who did all their diecast locos, and disappeared some years back.  More recently I seem to recall that at least one of the factories MTH was using closed down and there was some delay in finding another facility to use the tooling.

Our importers apparently have very little direct control of the factories in China, at least for these cottage industries, which are small potatoes compared with the likes of Apple, as an extreme example.

Last edited by Landsteiner

To be fair, Atlas never produced O gauge locomotives and rolling stock out of Hillside, NJ. The company did make track there for a long time and also produced N scale freight cars at its New Jersey plant for roughly 15 years before moving all production to China.

In fact, all other products sold under the Atlas name came from plants elsewhere over the years.

In the 1970s, Atlas worked extensively with Roco in Austria for O, HO and N scale locomotives and some O gauge rolling stock and imported some Rivarossi locomotives in N scale from Italy.

In the 1980s, Atlas began working with Kato in Japan for a line of N scale locomotives.

After all manufacturing switched to China, everything went fairly smoothly until Atlas and dozens of other train manufacturers were booted out of the Sanda Kan factory after Kader (Bachmann’s parent company) purchased the facility. Since then, many of those companies have had production problems, including delays and quality issues. The region of China where almost all of our trains are made reportedly has a labor shortage, which is contributing to those problems.

- Did not Lionel and Atlas share a diesel and rolling stock builder at one time, say, 10 years ago? I perceived that their product in certain categories were apparently identical, for a while. 

- On the MTH question, did not/does not MTH actually own some production facilities? In Korea, maybe?

I'm out of touch with this end of things, obviously.

D500 posted:

- Did not Lionel and Atlas share a diesel and rolling stock builder at one time, say, 10 years ago? I perceived that their product in certain categories were apparently identical, for a while. 

- On the MTH question, did not/does not MTH actually own some production facilities? In Korea, maybe?

I'm out of touch with this end of things, obviously.

Lionel and Atlas both had product made at Sanda Kan until 2010. Same place as K-Line, USA Trains, Athearn and many others globally.

The economics of this situation is not lost on me but there are locations in this great country where wage rates are low.  Why can't the design and production be brought back?  Just think of the cost savings in travel to the Orient and back to check on design and production and, of course, the cost of shipping back to the the USA.  Seems workable to me.  It is up to Atlas, Sunset and others to work out the details and to determine actual feasibility.  But a closed factory seems like reason enough to explore the possibility.

Ed

Will Ebbert posted:

As much as I'd like to see American production, I understand it's not feasible. What might be a good option for Atlas is to move in to the Rapido factory. Jason had mentioned wanting another train manufacturer in the with him. 

As a side note, I guess my wallet gets another break from having to pay for my F3s and SD40...

Here are a couple of video links from Rapido about its factory in China in 2016 and its plans in late 2017 to move to a different region in China and information on production problems in China:

https://youtu.be/tlbMfyaOykE

https://youtu.be/4uTSdY4dGGY

Ed Kelly posted:

The economics of this situation is not lost on me but there are locations in this great country where wage rates are low.  Why can't the design and production be brought back?  Just think of the cost savings in travel to the Orient and back to check on design and production and, of course, the cost of shipping back to the the USA.  Seems workable to me.  It is up to Atlas, Sunset and others to work out the details and to determine actual feasibility.  But a closed factory seems like reason enough to explore the possibility.

Ed

It's happening in the plastic kit industry. A  new company has started and is 100% made in USA.  The design, tooling, manufacture, packaging ALL done in southern California!!!! Now the price is about 16% more than the China produced kits.......but cost of a totally new start-up needs to be taken into account. 

And yes....development time went from 2-3 years for a kit from China to just shy of 12 months for USA kit.  I know a powered loco with multiple PC boards, assembled and painted is a apple to orange compare....but it does shine light it can be done stateside.

I can't get to weepy about the American companies getting burned by the Chinese. They asked for it so now they pay. These companies, such as they are-sit in the US with a couple of computers and telephones and communicate back & forth with China. They are lazy, take the easy way, make a few bucks and go on to something else. Guess what ??  Suck it up !!  Deal with it !!  Quit crying.

D500 posted:

- On the MTH question, did not/does not MTH actually own some production facilities? In Korea, maybe?

I'm out of touch with this end of things, obviously.

According to the video tour posted on train World TV, MTH's facility is dedicated to just MTH. There might be separate sites dedicated to RailKing and Premier, respectively (I haven't reviewed the video recently, at nearly an hour and a half, it is a bit of effort to rewatch for a forum post ). 

As for the idea of setting up a facility in a low-wage part of the US, there is also the issue of the network of sub-contractors needed to supply parts and assemblies that aren't practical to manufacture in-house (nuts/bots/screws/circuit boards, for example)

(Edit:, after re-viewing the Rapido video's linked to by Jim R. above, there is also the not-insubstantial issue of accumulated institutional knowledge needed to do the job properly--some of the engineers shown have been working in model train manufacture for 20+ years)

---PCJ

Last edited by RailRide
a1hobo posted:

This is certainly getting to be the norm for Atlas. I like their products and own my fair share, but this is getting real old. Regardless of who closed or walked out, etc, etc. it’s still on Atlas’s shoulders. Wonder how much more of this before the customer base will be affected. I know I am tired of it. 

I'll bet that this potentially sucks more for me than most folks. I sold off all of my 3-rail stuff (except for my Christmas layout) and have been waiting for my 2-rail Atlas engines to arrive so I can play with some trains. I'm also eagerly awaiting some HO engines from Atlas, as I've sold off most of my older equipment.

Still, this stuff sucks more for Atlas, than it sucks for any of us.

I'll always support Atlas …. they've been a big part of the hobby for me. Nice folks, too.

jim pastorius posted:

I can't get to weepy about the American companies getting burned by the Chinese. They asked for it so now they pay. These companies, such as they are-sit in the US with a couple of computers and telephones and communicate back & forth with China. They are lazy, take the easy way, make a few bucks and go on to something else. Guess what ??  Suck it up !!  Deal with it !!  Quit crying.

Clearly a lesson in economics is required here as well as a lesson on how the model railroad manufacturing process actually works.  Always easy to be an armchair quarterback when one has no knowledge of the subject. 

This is not good news for the industry as a whole.  If Lionel was the topic of this loss of a factory, the discussion would be much different on this forum. 

Yes Jim, that's all a person needs to run a business producing products in china and importing them into the US. If it were that easy, everybody here would be building and importing trains and we'd all have all of the models we ever wanted. I have a computer and a phone should I start a train business with china?

dkdkrd posted:

Other manufacturers are, indeed, involved...and not just in the O market...

Bowser, Fox Valley, Intermountain Railways to name a few.

Our (LHS) info is that the supplier became star-crossed with the Chinese government...who simply shut them down.  

C'est la vie.

So, KD …. do you guys know if it DOES include Atlas' O scale products … and not just HO?

Jim

jim pastorius posted:

I can't get to weepy about the American companies getting burned by the Chinese. They asked for it so now they pay. These companies, such as they are-sit in the US with a couple of computers and telephones and communicate back & forth with China. They are lazy, take the easy way, make a few bucks and go on to something else. Guess what ??  Suck it up !!  Deal with it !!  Quit crying.

You probably need to talk to Scott Mann of 3rd Rail and find out what doing business in the Far East is like in the real world. From what he's said in the past, the words "difficult, painstaking, often frustrating, and HARD WORK" would seem to describe what the reality is. I knew the guy who owned the late Pecos River models, who had some work done in China, and that's exactly how he described it, too.

Last edited by breezinup

At Spring York 2017 I made mention to Atlas in their booth about the long delays getting engines manufactured.  They seemed to think it was ok to catalog and deliver 3-4 years later or longer in some cases.  I think the business model has issues if this keeps happening over and over.  No more Atlas engine orders for me, just rolling stock.  They should just stick to rolling stock, as they are pretty good at that!

Last edited by MichRR714

I was just reading the discussion about this factory closing on the Model Railroading board of Trainorders.com. There is a VERY interesting post from a Jason, of "Rapido Trains", some of his statements are quoted here: "......KK has decided to close Affatech.", and "KK is at retirement age, and his children don't want to take over the business." .

Assuming this is true, about "KK" retiring (whom ever 'KK' is), I wonder why this came as such a surprise to Atlas, Bowser, etc.? Surely there have been discussions about his retirement and closing Affatech previously.

 

Two things have dragged Atlas O down...the untimely death of Jim Weaver and the loss of the factory a few years back that now handles Bachmann.  They still have not recovered and any progress has taken very long.  If this factory (and that's a huge if because it remains to be seen) manufacturers O gauge, well....it ain't gonna be good, that's for sure.  BigRail.

GG1 4877 posted:
jim pastorius posted:

I can't get to weepy about the American companies getting burned by the Chinese. They asked for it so now they pay. These companies, such as they are-sit in the US with a couple of computers and telephones and communicate back & forth with China. They are lazy, take the easy way, make a few bucks and go on to something else. Guess what ??  Suck it up !!  Deal with it !!  Quit crying.

Clearly a lesson in economics is required here as well as a lesson on how the model railroad manufacturing process actually works.  Always easy to be an armchair quarterback when one has no knowledge of the subject. 

This is not good news for the industry as a whole.  If Lionel was the topic of this loss of a factory, the discussion would be much different on this forum. 

You'reright! However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

Last edited by prrhorseshoecurve
prrhorseshoecurve posted

You're rihri. However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

Watch the rapido  videos and ask yourself who in the American workforce is willing to sit there and remove tiny plastic parts from the sprues all day long......year after year. 

Then has the talent to skillfully assemble the products that would satisfy this rivet counting marketplace...

Korea and China has the talent and that's why it's made there.

 

 

 

Will Ebbert posted:

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

You are correct Will. 

One of the challenges with this news is that you are seeing the result of not only a changing demographic in the hobby, but the also in the people who are dedicated to bringing these products to market.  It's a hard business model to succeed in, especially considering the ever changing global economic landscape.  The best product coming to market has been brought to us by people who have had decades in this business and they are not able to find adequate replacements for their retirement.  It's easy to make generalizations about anyone who manages the day to day operations of a factory, but the reality is they are good at what they do from years of experience.  This is true whether it's is China or the US. 

 

Will Ebbert posted:
prrhorseshoecurve posted

You're rihri. However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

Not Quite. The Gp38 and Rs3's were made here! The AlCo RS11, RSD12, and BLW Vo1000 were made in China. The Ultra Line of Freight cars were made here- and subsequently are now called Lionscale.  Some Die cast parts were made in China, but the GP38- Shell, Truck Side Frames, Railings all were made here! The ALCo RS3 Bodies, Frames, and Fuel tank were made here!

Last edited by prrhorseshoecurve
prrhorseshoecurve posted:
Will Ebbert posted:
prrhorseshoecurve posted

You're rihri. However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

Not Quite. The Gp38 and Rs3's were made here! The AlCo RS11, RSD12, and BLW Vo1000 were made in China. The Ultra Line of Freight cars were made here- and subsequently are now called Lionscale.  Some Die cast parts were made in China, but the GP38- Shell, Truck Side Frames, Railings all were made here! The ALCo RS3 Bodies, Frames, and Fuel tank were made here!

GP 38-2 one of Weaver's last offerings.  Note that the truck side frames are molded plastic attached to metal trucks. 

Weaver RS-3 was also offered late, but had several different drive and detail packages over the years. 

Weaver had a pretty good in house paint and pad printing shop, able to do a lot of their own detail and custom work.  There is or was discussion of the "made in the USA" product detail.  As with a lot of product in the USA there were component percentage rules that detailed the "made in the USA" stamp.  

jim pastorius posted:

Nice looking locos. Better than some others I have seen.

Only detail that detracts, is the visible motor/electronics in the cab area.  The two pictured had EOB speed control and electro-couplers, though Weaver offered the models several ways, even conventional.   Weaver had the ability to hedge their bets when dealing with foreign production, worse case, they could assemble a product from their own facility.  IMO.  

Last edited by Mike CT

There are a lot of questions with any business, and when you are dealing with making things in China the questions seem to get more complicated. For example, China is trying to move their country more upscale into high end products rather than just low cost assembly for companies outside the country, and that could make it more difficult to make trains there, finding labor if there is competition from better paying industries, might leave this kind of work to be honest with fly by night piecemeal operators who may not be the most stable of operators. It already is difficult dealing with contracted out manufacturing, SLA's mean pretty much nothing and you can only hope the people on the other end are operating in good faith, and they run into problems with secondary suppliers (hardware, circuit boards, etc).  China right now in many ways is in flux, things are changing (leaving out the whole trade/political situation which isn't really relevant here), and it is going to be reflected in the model the various train manufacturers are using. The thing is, I don't know of another model that is going to work, if China gets too expensive then I suspect you might see trains made in Vietnam or Malaysia or perhaps Africa if low wage production is what they want, or potentially maybe Chinese companies working in Mexico, it already is happening).  

 

 

Dave Funk posted:

Watch the rapido  videos and ask yourself who in the American workforce is willing to sit there and remove tiny plastic parts from the sprues all day long......year after year. 

Then has the talent to skillfully assemble the products that would satisfy this rivet counting marketplace...

Korea and China has the talent and that's why it's made there.

 

 

 

Having spent years in the hobby removing tiny plastic parts from sprues I would say one good way to market O-Scale products might be to return to kits or semi-kits.  Consumers might also appreciate an engine in the $250 range instead of the $450 range even if it meant a lot of detailing would have to be added by the purchaser.  Even if a manufacturer/importer were to offer engines both ways- ready to go out of the box and semi-kit, it might increase overall product sales to help recover development costs while allowing more modelers to have the engine.  Win-win?

Bill Chaplik posted: 

 

Having spent years in the hobby removing tiny plastic parts from sprues I would say one good way to market O-Scale products might be to return to kits or semi-kits.  Consumers might also appreciate an engine in the $250 range instead of the $450 range even if it meant a lot of detailing would have to be added by the purchaser.  Even if a manufacturer/importer were to offer engines both ways- ready to go out of the box and semi-kit, it might increase overall product sales to help recover development costs while allowing more modelers to have the engine.  Win-win?

I'd love rolling stock kits along the line of old Blue box Athearn HO kits. I'd even build great quality locos minus electronics.....easy to buy from folks like Dallee. 

Disclaimer: I've been accused of being on the lunatic fringe of both the model train and model car hobby.....so who knows. 

AMCDave posted:
Bill Chaplik posted: 

 

Having spent years in the hobby removing tiny plastic parts from sprues I would say one good way to market O-Scale products might be to return to kits or semi-kits.  Consumers might also appreciate an engine in the $250 range instead of the $450 range even if it meant a lot of detailing would have to be added by the purchaser.  Even if a manufacturer/importer were to offer engines both ways- ready to go out of the box and semi-kit, it might increase overall product sales to help recover development costs while allowing more modelers to have the engine.  Win-win?

I'd love rolling stock kits along the line of old Blue box Athearn HO kits. I'd even build great quality locos minus electronics.....easy to buy from folks like Dallee. 

Disclaimer:I've been accused of being on the lunatic fringe of both the model train and model car hobby.....so who knows. 

Take heart, fellow fringe-friend!  We are not alone!  We may even be legion!

Among my favorite quotations..."There is a correlation between the creative and the screwball.  So we must suffer the screwball gladly!".....Kingman Brewster Jr. (American educator/diplomat)

KD

Last edited by dkdkrd

My initial thought regarding Bill's "let them have kits" response above was "heck no" but; I have to admit that after pondering this for a bit; I have concluded it would actually be fun to occasionally assemble cars or engines from kits.  Like many on here; I grew up in the era when we assembled model ships, planes and cars.  I can remember some of the aircraft and particularly the ships had a tremendous number of small detail parts that had to be removed from sprues and added to the model.  And in retrospect; it was all quality time!

Since my layout has more or less been completed for a number of years; I have started to find enjoyment in some minor weathering and detailing of rolling stock so; assembling rolling stock and locomotive kits seems like a logical next step in that progression.

Curt

I received an email from an HO mail order dealer listing the companies affected and their response. Looks like the only O gauge importer affected may be Atlas. Also the main driver behind the shutdown was increasing labor shortages and cost.

Here's the bulk of the email. It addresses the affect on HO production and doesn't say anything directly about O.

In case you haven’t already heard, a large Chinese suppler of model trains just closed its doors, not for lack of orders but lack of labor and escalating costs:  This will affect most manufactures, Atlas and Bowser say this affects all products announced since January 2018, Fox Valley says most all of their new products, Walthers and Rapido say this does not affect them, they have been transferring production to other factories, we may learn more next month that the National Train Show in Kansas City, MO August 5-12th, if you’re going to the show let us know what you hear.

 

Atlas has received notification from one of our locomotive and rolling stock suppliers that they have closed their factory. (Please note Atlas track and accessories are NOT affected by this delay.) Atlas is currently working with our network of suppliers to transfer the projects to others for completion. This will cause a delay in some previously ordered products. We apologize for this delay, thank you for your continued support, and will update you with more information as it becomes available. 

 

Bowser says this will affect future product, more information to follow, they have removed projected delivery dates for all projects from their website till they have more information.

 

Fox Valley: Over the weekend, news broke that a large supplier of model trains in China has closed its doors. Fox Valley Models has used this factory for a large portion of our products. As of today, there is no clear path that will resume production in short order, or an easy way to move projects. With this news, we must reluctantly list all previously announced products as Postponed/Cancelled. If projects can be moved, it will take a number of months to do so, and then get a new factory up to speed on our projects will take even more time. We will keep all previously recorded pre-orders on file. If a resolution presents itself over the next few months, we will reconfirm specific projects as they get close (well into next year at best). If this process takes and extended time, it may be best to re-announce each project. 

 

Intermountain railway company has become aware that our sole supplier in China has discontinued business without warning.  This will result in our not having any new product releases for an undetermined period of time.  Our expectation is that we will begin shipping a selection of new product within four months.  Please be assured that Intermountain is dedicated to continuing to produce our high quality product line.  Purchase orders with alternate vendors are already being arranged so we anticipate production to resume very soon.

 

Rapido has been shifting production to a new factory in Guangxi province and is ramping up production, says it takes time to train all of the new people, and models only leave the factory if they are at the required Rapido quality level. It's been a difficult transition period as the Rapido factory has moved twice in the last year, but we're almost through it. Training new people is nothing new. The problem with the last location is that we couldn't keep people more than a few weeks due to the labor shortage in the area. We were always having to train new people. At least now when we train them, they will stay for longer!  Previously:  The vast majority of the world's model trains are made in Dongguan, China. That is where Sanda Kan and Kader had their factories, and that is where the global expertise in model train manufacturing is centered. As I discuss in our most recent video, the rising costs in southern China mean that it is becoming difficult to make model trains there. Our prices are creeping up, but the costs are going up far more quickly.

 

Walthers says this does not affect any Walthers brand items i.e. Proto, Cornerstone, Mainline, SceneMaster, etc., but that Shinorhara track will be discontinued and replaced with Walthers code 83.

 

Ken

Another part of the hobby, I had an older SW9, that had Dallee Electronics and Sound.  Poor at best.  I managed to acquire Used parts, and TMCC electronics from different sources.  The rebuild was time consuming, it was fortunate that I had other SW9's to model/check wiring and spacing.  Eventually the model came together and works as well as my other Atlas SW9.  IMO few in the hobby would spend this time on a model.  

I spent some time, with a dremel tool, to carefully install a better speaker in the fuel tank area.  Atlas supplied the speaker speaker screen, and some other parts I needed. 

 I carefully removed the speaker mounts from inside the hood area, and installed a used TAS, TMCC assembly.  I also changed the lamps to 18 volt, and have some work to do installing the run/program switch and  Sound/No Sound switch.  I also added the electro-couplers and covers, which required some under-frame adjustment. 

Electro-coupler installed. 

Antenna needs to be installed inside the plastic cab, mounted to the roof. Was done with a small piece of copper sheet installed on the ceiling of the cab.  A wire connected the copper sheet to the PC board. 

Good bit of work to be done/complete/ it operates well.

 

When TAS did these Dallee upgrades many years ago, they were using new frames from Atlas, which at the very least allowed for the speaker in the fuel tank.  I did some modification to the front and rear truck mounts as well as the coupler swing area to mount the electro-couplers.  The mounts inside the front hood area also have to be removed. 

ERR is a smaller package.

I did run the Dallee unit briefly.  IMO, speaker quality was poor compared to my other Atlas SW9's. Pictured round speaker is an Atlas replacement.  

The used TAS board was missing the front and rear aluminum mounts, when I got it.  Atlas supplied new mounting post and all the screws

Last edited by Mike CT
david1 posted:

Although engine kits or semi kits sounds like a good idea I'm not sure it would sell. 

Very few people do kits of any kind.

But I would like to see the mfg. give it a try. Maybe just a detail kit for a locomotive that the mfg. builds without the details added, hence a cheaper locomotive to buy.

Dave

I might agree with questionable consumer acceptance of a return to kits.  Our (LHS) own sales in model railroading and other hobby branches....like RC airplanes, drones, boats, helicopters, etc., etc....says that the typical hobby consumer has become less inclined to build.  And even though the long-ago relatively cheap prices of factory-assembled items have crept up to eye-popping levels in the past few years, the desire to hone one's own skills...maybe left dormant for those 20 years, or so...has gone bye-bye probably forever for many of those folks.

But, I've long been of the understanding that China government/manufacturing 'policy' has strongly resisted the manufacture and selling of parts/kits under the premise that it leaves open the possibility of someone else, some other nationality, assembling/selling the parts into a higher order product to compete with them.  I am, for instance, aware of some model railroad r-t-r items (esp. locomotives) made exclusively for a large U.S. distributor whose only recourse for providing warranty parts/repairs is to cannibalize a reserved supply of complete assemblies.

Perhaps this policy/practice has changed or been relaxed more recently, but it might be a hurdle yet to be crossed in offering 'some assembly required' options?

Then, again, I've been away from the old lines of this sort of international market/manufacturing communication for several blissful years now......so what the heck do I know? 

I yield to them that do know.

KD

Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

GregR posted:
Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

Job-loss in China is of no relevance to this discussion. Nor do I care.

Job-loss in the US is a bit more relevant, if yesterday's news, but I've quit caring about that, too, as a nation that won't do the work is not to be admired.

GregR posted:
Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

It's a matter of looking at the big picture. There is still a ton of manufacturing done in America, but what is done here is highly automated. Model train manufacturing is extremely difficult to automate, and labor costs are too high here. The retail price of model railroad rolling stock would probably rise by a factor of four (at a minimum) if it was manufactured here. That's not a viable business model and we need to understand that.

Jeff C

For those who think locomotive models in kit form would save big money, guess again. The cost is in designing the models, tooling up for a project and manufacturing the parts. Assembly accounts for a fraction of the costs — likely less than 15 percent.

And even that savings is questionable, given the labor costs that would be required to package individual components from various sources. 

GregR posted:
Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

As already stated, Atlas O never made products in America to begin with so this is a moot point here. 

Last edited by Will Ebbert
Will Ebbert posted:
palallin posted:

I don't buy the argument that production costs here would be 2 or 3 or 4 times the costs in China:  when the production moved FROM here TO China, prices rose; they didn't fall.

Minimum wage in China is about $380USD a month. In the US it's about $1200. Simple math. 

Not to mention the fact that there is no OSHA, and very little EPA regulations for a small business to deal with.

Ridiculous to compare a minimum wage in China to in the US. Different economies, different lifestyles. I did read before all this happened tht labor supply was short and  wages were up. Low cost manufacturing was moving out of China to Viet Nam and other places. Besides the owner of this critical plant probably got a big order to make magazines for their assault rifles.

jim pastorius posted:

Ridiculous to compare a minimum wage in China to in the US. Different economies, different lifestyles. I did read before all this happened tht labor supply was short and  wages were up. Low cost manufacturing was moving out of China to Viet Nam and other places. Besides the owner of this critical plant probably got a big order to make magazines for their assault rifles.

If you read what I posted previously, the owner of the factory in question (Affatech), retired. His family/kids did NOT have any interest in running the business.

 

Will Ebbert posted:
palallin posted:

I don't buy the argument that production costs here would be 2 or 3 or 4 times the costs in China:  when the production moved FROM here TO China, prices rose; they didn't fall.

Minimum wage in China is about $380USD a month. In the US it's about $1200. Simple math. 

Simple math, but with a fundamental flaw, assuming that labor costs are basically the whole cost of a product, it is why simple answers often aren't. While labor costs are  often the largest percent cost in a company, that doesn't mean the cost of production is linear like that and the reason for the difference in costs. Depending on the product, labor makes up a percentage of the cost, but not necessarily a big one (for example, on an Iphone, based on an article I read, the biggest cost in the unit is the chip set that runs it, labor was like 15% of the cost), the cost of the chip set was like 170 bucks or so and was something around 60% of the cost of building it. 

Too, each manufactured unit has costs associated with it from the cost of the tooling, that is spread over each unit they build and sell, it is factored into the price, as is the cost of shipping, the cost of designing the unit and the tooling, the manufacturing cost (that includes of course labor, but also includes local costs of electricity, cost of space, cost of materials, etc), depreciation is factored into the cost, as if the cost of quality (basically, the cost of bad quality ie the expected cost of repairing the units under warranty, the cost of ones that come to the US DOA, are not even shipped from the factory so cannot be sold, and believe me lionel knows all these numbers).  Based on similarly manufactured items, the usually estimates given are around 15-20% more cost if built in the US. Someone analyzed Stanley Tool when they moved to China, and they figured out that on an 11 buck tape measure the difference in price between US made and China was about a buck to a buck fifty (if you notice, not 44 bucks). A 1000 buck engine would likely cost around 1200 if made in the US if those numbers hold up (and I suspect they do). China has now gotten expensive enough that that gap may be even less, plus with China keep in mind the cost of shipping is going up as well as labor rates because of the cost of oil. The other thing is that China is moving upscale, workers they have that can do this kind of work want something better, and for a variety of reasons the unskilled workers from rural areas don't work the way it once did., it is why Chinese factories are moving to places like Vietnam. 

The reality is that I doubt a low volume manufacturer like Lionel would move back to the US, even with labor becoming less of a factor, but the claims about labor being too expensive in the US, regulations, etc to make it affordable is not entirely true, and those numbers were from a while ago, today with the cost of chinese labor and the tightness of their labor market, it might be 10% or less difference. To bean counters and stock analysts (and sadly, the people who complain about jobs going overseas, but then want the "walmart" price on everything, are part of this) any cost, especially labor, they can get off the books, the better. What potentially could work is someone like a newfangled version of Sanda Kan, where they do contract work for a number of manufacturers, something like that might have the economies of scale to allow it to work in the US, including using automation, and also would likely have better quality control then the mishmash of factories doing the work now, not to mention reduced shipping rates, the payouts to the Chinese government that are part of almost any business there, being bound by US courts with the contracts, but I doubt after the MTH/Lionel disaster and fears of stealing trade secrets, etc, and just the wariness of the various companies, it would happen. 

Customers are asking if this affects GGD / Sunset Models:

As for GGD / Sunset Models, we have no projects with AFFA Tech. Our factories are small, independently run assembly and finishing facilities located in Eastern China. To avoid these disruptions we compartmentalize Design, Tooling and Assembly, and control each separately, so if one goes rogue, we can shift production or tooling to another subcontractor.

Best of Luck...

Scott Mann

kanawha posted:

I received an email from an HO mail order dealer listing the companies affected and their response.....

.....Atlas and Bowser say this affects all products announced since January 2018, …..

 Ken

Thanks for posting all that, Ken.

The above quoted sentence bodes well for Atlas engines …. both O and HO. (If O scale is actually involved, anyway)

Jim

Just my two cents.

It is stated many times in this thread that Atlas Track is not affected.  All I know is I have had an order in with a large supplier of Atlas track since March(?).  I was originally told that it would not ship from this supplier until July.  For starters, what is with That?  So I call this supplier a day or so ago to find out what is the status and to order some additional pieces.  Guess what?  I was told that now my order won't ship until September.  So manufacturing in China as far as I am concerned is a crap shoot.  If I had not have started with Atlas track and now that I have acquired all the real estate in my Basement that I can afford (without a divorce proceeding), I would definitely change my mind and use a popular American made track manufacturer to supply my track "habit", I mean needs.

EBT Jim posted:
kanawha posted:

I received an email from an HO mail order dealer listing the companies affected and their response.....

.....Atlas and Bowser say this affects all products announced since January 2018, …..

 Ken

Thanks for posting all that, Ken.

The above quoted sentence bodes well for Atlas engines …. both O and HO. (If O scale is actually involved, anyway)

Jim

I hope this is true because I have a couple of SD40's preordered from August 2016. I have some Trinity hoppers and an extended vision caboose preordered from this year's announcements but I don't mind if these are delayed.

catnap posted:
EBT Jim posted:
kanawha posted:

I received an email from an HO mail order dealer listing the companies affected and their response.....

.....Atlas and Bowser say this affects all products announced since January 2018, …..

 Ken

Thanks for posting all that, Ken.

The above quoted sentence bodes well for Atlas engines …. both O and HO. (If O scale is actually involved, anyway)

Jim

I hope this is true because I have a couple of SD40's preordered from August 2016. I have some Trinity hoppers and an extended vision caboose preordered from this year's announcements but I don't mind if these are delayed.

Frankly, anything not yet built is affected.  Unless they're in a container on the dock or on the water, expect even more delays. 

Plus, getting things scheduled in with a new builder isn't going to happen with a snap of the fingers.  I'm pretty sure the remaining builders have full production schedules.

Rusty

Last edited by Rusty Traque
Lou N posted:
laming posted:

Confirmed list of companies known to be affected thus far:

Atlas (engines and rolling stock, track okay); Intermountain; Bowser; Fox Valley; Bluford Shops; Trainworx.

The list keeps growing.

Andre

TW does not.

Here we go as I light the forum fuse.......

Lionel does.

Lou N

Lou, maybe I am just dense--Lord knows, it's true!--but I don't get your post.  TW does not what?  Lionel does what?  I can't fit the syntax together. 

ajzend posted:

I may be wrong, but I believe that if you have tooling in China you cannot bring it out.  It's there to stay.  So, American manufacturers are held hostage by their choice to move there in the first place.

Alan

If the tooling was created in China, definitely. If it was shipped into China, it might possibly be retrieved. But there are very few examples of that in China, which has pretty much owned O gauge production for nearly two decades now, after Lionel announced its move in 2000.

palallin posted:

I don't buy the argument that production costs here would be 2 or 3 or 4 times the costs in China:  when the production moved FROM here TO China, prices rose; they didn't fall.

Don’t be naive. Prices didn’t fall after the shift to China because Lionel increased its profit margin by reducing production costs. But the cost of production in China is rising sharply and that is pushing the price up as well.

Last edited by Jim R.
Jim R. posted:
ajzend posted:

I may be wrong, but I believe that if you have tooling in China you cannot bring it out.  It's there to stay.  So, American manufacturers are held hostage by their choice to move there in the first place.

Alan

If the tooling was created in China, definitely. If it was shipped into China, it might possibly be retrieved. But there are very few examples of that in China, which has pretty much owned O gauge production for nearly two decades now, after Lionel announced its move in 2000.

True.  American Models (S Scale manufacturer) recovered their US made tooling after the Sanda Kan fiasco.  It did take some time to retrieve it, though.

Rusty

palallin posted:
Lou N posted:
laming posted:

Confirmed list of companies known to be affected thus far:

Atlas (engines and rolling stock, track okay); Intermountain; Bowser; Fox Valley; Bluford Shops; Trainworx.

The list keeps growing.

Andre

TW does not.

Here we go as I light the forum fuse.......

Lionel does.

Lou N

Lou, maybe I am just dense--Lord knows, it's true!--but I don't get your post.  TW does not what?  Lionel does what?  I can't fit the syntax together. 

TW layout builders does not use Affatech. 

Lionel does (or did) use Affatech. 

Lou N

Jim R. posted:
palallin posted:

I don't buy the argument that production costs here would be 2 or 3 or 4 times the costs in China:  when the production moved FROM here TO China, prices rose; they didn't fall.

Don’t be naive. Prices didn’t fall after the shift to China because Lionel increased it profit margin by reducing production costs. But the cost of production in China is rising sharply and that is pushing the price up as well.

*sigh*  Yes, of course the Big Corporations' greed is completely responsible for all our woes.  How silly of me to suggest that economic reality has anything to do with it.

Other companies have shown that it is possible to return/retain domestic production with reasonable prices--heck, Lionel is doing some of that themselves.

palallin posted:

*sigh*  Yes, of course the Big Corporations' greed is completely responsible for all our woes.  How silly of me to suggest that economic reality has anything to do with it.

Other companies have shown that it is possible to return/retain domestic production with reasonable prices--heck, Lionel is doing some of that themselves.

You can be quite sure that, aside from production of select items such as rolling stock where the tooling is already here (some Lionel product, for example), you will NOT see the manufacturing of major items such as motive power return to the U.S. There may be alternative countries that can handle these things to avoid sticking with China, but I seriously doubt that any of the toy and model train manufacturers, regardless of scale, will return full production to the U.S. As desireable as that might be, it just does not make a whole lot of economic sense these days, especially since, as I understand it, toy train makers today with production in China do not even have full control/ownership over their own tooling.

Last edited by Allan Miller
Loose-Caboose posted:

Just my two cents.

It is stated many times in this thread that Atlas Track is not affected.  All I know is I have had an order in with a large supplier of Atlas track since March(?).  I was originally told that it would not ship from this supplier until July.  For starters, what is with That?  So I call this supplier a day or so ago to find out what is the status and to order some additional pieces.  Guess what?  I was told that now my order won't ship until September.  So manufacturing in China as far as I am concerned is a crap shoot.  If I had not have started with Atlas track and now that I have acquired all the real estate in my Basement that I can afford (without a divorce proceeding), I would definitely change my mind and use a popular American made track manufacturer to supply my track "habit", I mean needs.

You hit that on the head.  I ordered a bunch of Atlas track and switches from a major supplier.  Probably, same as yours.  I gave up on the switches and went to eBay for 15 of them.  I got lucky and only bought 1 of the older models.  It has since been replaced.  I really like their track and switches. I thought their concept on track signaling was great.  Got all lathered up and found out they ceased and recalled that product.  I was able to work with Custom Signals to obtain what I needed.  For what it is worth, talking with Stephen at Atlas, he mentioned they are coming out with the signaling again.  It is supposed to be backward compatible with the older items.

Allan Miller posted:

You can be quite sure that, aside from production of select items such as rolling stock where the tooling is already here (some Lionel product, for example), you will NOT see the manufacturing of major items such as motive power return to the U.S. There may be alternative countries that can handle these things to avoid sticking with China, but I seriously doubt that any of the toy and model train manufacturers, regardless of scale, will return full production to the U.S. As desireable as that might be, it just does not make a whole lot of economic sense these days, especially since, as I understand it, toy train makers today with production in China do not even have full control/ownership over their own tooling.

Allan,

A few years ago I tried to have product quoted in India only to find out that the Indians had the Chinese quote product for them.

Lou N

Allan Miller posted:

You can be quite sure that, aside from production of select items such as rolling stock where the tooling is already here (some Lionel product, for example), you will NOT see the manufacturing of major items such as motive power return to the U.S. There may be alternative countries that can handle these things to avoid sticking with China, but I seriously doubt that any of the toy and model train manufacturers, regardless of scale, will return full production to the U.S. As desireable as that might be, it just does not make a whole lot of economic sense these days, especially since, as I understand it, toy train makers today with production in China do not even have full control/ownership over their own tooling.

I would also bet Lionel's U.S. made Lion Scale line won't be expanded beyond the original Weaver tooling.

Rusty

Bryant Dunivan 111417 posted:
Loose-Caboose posted:

Just my two cents.

It is stated many times in this thread that Atlas Track is not affected.  All I know is I have had an order in with a large supplier of Atlas track since March(?).  I was originally told that it would not ship from this supplier until July.  For starters, what is with That?  So I call this supplier a day or so ago to find out what is the status and to order some additional pieces.  Guess what?  I was told that now my order won't ship until September.  So manufacturing in China as far as I am concerned is a crap shoot.  If I had not have started with Atlas track and now that I have acquired all the real estate in my Basement that I can afford (without a divorce proceeding), I would definitely change my mind and use a popular American made track manufacturer to supply my track "habit", I mean needs.

You hit that on the head.  I ordered a bunch of Atlas track and switches from a major supplier.  Probably, same as yours.  I gave up on the switches and went to eBay for 15 of them.  I got lucky and only bought 1 of the older models.  It has since been replaced.  I really like their track and switches. I thought their concept on track signaling was great.  Got all lathered up and found out they ceased and recalled that product.  I was able to work with Custom Signals to obtain what I needed.  For what it is worth, talking with Stephen at Atlas, he mentioned they are coming out with the signaling again.  It is supposed to be backward compatible with the older items.

Bryant, do have an email address. I have quite a bit of 40 in Atlas straights and a fair amount of large radius curves.

 

David

Walthers said today supplier Shinohara will stop production soon.  They are seeking a new vendor. 

A note on USA made and designed hobby products....find JR Salvino's models on the net or FB......100% designed, manufactured and packed in very expensive Southern California.....it is being done.  First plastic kit to do this in 25 years. 

AMCDave posted:

Walthers said today supplier Shinohara will stop production soon.  They are seeking a new vendor. 

A note on USA made and designed hobby products....find JR Salvino's models on the net or FB......100% designed, manufactured and packed in very expensive Southern California.....it is being done.  First plastic kit to do this in 25 years. 

OK, so how much are those "kits", and what scale are they?

Hot Water posted:
AMCDave posted:

Walthers said today supplier Shinohara will stop production soon.  They are seeking a new vendor. 

A note on USA made and designed hobby products....find JR Salvino's models on the net or FB......100% designed, manufactured and packed in very expensive Southern California.....it is being done.  First plastic kit to do this in 25 years. 

OK, so how much are those "kits", and what scale are they?

The kits MSRP is about 10-15% more than China produced kits but I got mine from a online seller at the going average cost. The cars are 1/25 scale or about the size of a O 40ft box car....lots more parts count. thx

AMCDave posted:
Hot Water posted:
AMCDave posted:

Walthers said today supplier Shinohara will stop production soon.  They are seeking a new vendor. 

A note on USA made and designed hobby products....find JR Salvino's models on the net or FB......100% designed, manufactured and packed in very expensive Southern California.....it is being done.  First plastic kit to do this in 25 years. 

OK, so how much are those "kits", and what scale are they?

The kits MSRP is about 10-15% more than China produced kits but I got mine from a online seller at the going average cost.

Please provide actual dollar amount, as I'm not familiar with any "China produced kits".

The cars are 1/25 scale or about the size of a O 40ft box car....lots more parts count. thx

I'm confused,,,,,,,,what does "1/25 scale" have to do with 1/48 O scale?

 

Golferdg posted:
Bryant Dunivan 111417 posted:
Loose-Caboose posted:

Just my two cents.

It is stated many times in this thread that Atlas Track is not affected.  All I know is I have had an order in with a large supplier of Atlas track since March(?).  I was originally told that it would not ship from this supplier until July.  For starters, what is with That?  So I call this supplier a day or so ago to find out what is the status and to order some additional pieces.  Guess what?  I was told that now my order won't ship until September.  So manufacturing in China as far as I am concerned is a crap shoot.  If I had not have started with Atlas track and now that I have acquired all the real estate in my Basement that I can afford (without a divorce proceeding), I would definitely change my mind and use a popular American made track manufacturer to supply my track "habit", I mean needs.

You hit that on the head.  I ordered a bunch of Atlas track and switches from a major supplier.  Probably, same as yours.  I gave up on the switches and went to eBay for 15 of them.  I got lucky and only bought 1 of the older models.  It has since been replaced.  I really like their track and switches. I thought their concept on track signaling was great.  Got all lathered up and found out they ceased and recalled that product.  I was able to work with Custom Signals to obtain what I needed.  For what it is worth, talking with Stephen at Atlas, he mentioned they are coming out with the signaling again.  It is supposed to be backward compatible with the older items.

Bryant, do have an email address. I have quite a bit of 40 in Atlas straights and a fair amount of large radius curves.

 

David

Thanks for reacing out.  I did get the track from the dealer, but had to get the switches on EBay.  I am good for now.  Thanks for asking.

It's funny Allan, how every manufacturer talks about the high cost of new tooling, yet there are always modelers in the hobby who argue that point. Not only is it the high costs of the dies themselves, but the research and development that has to be done first, especially for a scale product. And then there's the cash outlay for all of that, which means that has to come out of the profits of other products.

Well, this isn't China, but this just appeared a few hours ago. Bear in mind this is a basic traditional box car without all the added detail parts (added assembly time) of the usual scale product. And yet this is still quite time consuming. I dare not even think of something like a locomotive. Also consider that with US production, you are still dependent on foreign made components: In this particular case, the truck sets. On a locomotive - even the most basic starter LionChief type - you would need all the circuit boards of every type, the motors and the trucks all stocked up before you could begin any production run.

Any US made production like this is great. But you are still in need of foreign made parts, which also adds to cost as all those components have to be shipped to the US.

 

Last edited by brianel_k-lineguy
Rusty Traque posted:
 

I would also bet Lionel's U.S. made Lion Scale line won't be expanded beyond the original Weaver tooling.

Rusty

You'd lose that bet.  Lionel has already shown that to NOT be the case.  Look at the most recent Lionel catalog.  They have an ACF 3-bay hopper in there that is NOT former Weaver tooling.  It's been in the Lionel line since the 1980's.  It's now being made in the USA again.

Stu

Hot Water posted:
 

Please provide actual dollar amount, as I'm not familiar with any "China produced kits".

The cars are 1/25 scale or about the size of a O 40ft box car....lots more parts count. thx

I'm confused,,,,,,,,what does "1/25 scale" have to do with 1/48 O scale?

 Hobby products designed, tooled, MANUFACTURED and packaged in the USA. Many here say manufacturing in the USA is impossible....these guys say no....THAT"S what it has to do with trains. 

95% of hobby plastic kits today are tooled and manufactured in China and marketed here by AMT, MPC and until they shut down last month Revell. (much like MTH, Lionel and Atlas) They have a MSRP of $30-45 USD Salnino's USA kit has a MSRP of $40. 

 

Allan Miller posted:
Rusty Traque posted

I would also bet Lionel's U.S. made Lion Scale line won't be expanded beyond the original Weaver tooling.

Rusty

I wouldn't take that bet because I believe you are probably right. New tooling is a big investment, and it takes a good amount of time and a lot of sales to recover that amount.

Allan,

Up in Cleveland there is a plastics injection mold shop (I have used them) run by an old German tool maker (he is in his 80's) and his son.  I've been told that the Chinese can provide finished tooling cheaper than he can buy high quality tool steel.

Lou N

Lou N posted:
Allan Miller posted:
Rusty Traque posted

I would also bet Lionel's U.S. made Lion Scale line won't be expanded beyond the original Weaver tooling.

Rusty

I wouldn't take that bet because I believe you are probably right. New tooling is a big investment, and it takes a good amount of time and a lot of sales to recover that amount.

Allan,

Up in Cleveland there is a plastics injection mold shop (I have used them) run by an old German tool maker (he is in his 80's) and his son.  I've been told that the Chinese can provide finished tooling cheaper than he can buy high quality tool steel.

Lou N

And when you tool in China you own 47% of what you pay for.......so not as good of a deal as it seems....

I've dealt with Chinese and American injection molding companies at work. I've had molds made in the US and the parts made locally. Finding an American injection molding company is easy. They are just very expensive by comparison. I've had a mold made in China and then sent to a US company to produce the parts here. No, the Chinese government does not own part of it. You do pay a premium to take possession of it though. I've also had molds made in China and the parts manufactured there. There are huge cost differences in each approach and which is the best choice is product specific. Each one has merit and US manufacturing is not always a viable option. 

I will say that in regards to quality, that comes down to who you work with. I've had good products made in China and horrible ones made in the US at a higher cost. I've also experienced the reverse scenario. 

A few years ago I got a mold quote for a project at work. A US company quoted us $40k for the tooling alone. It would take 6-8 weeks before they could begin the tooling and another 6-8 before we would have samples. The parts would then be made here as well. 

I also quoted having the tooling made in China but sent here so the same molding place could make the parts. They wanted $25k and could have the tooling to the molding company in 6 weeks. 

The last option was having the tooling made in China and the parts manufactured there. They wanted $2000 for the tooling but we didn't take possession of it. These were small volume prototypes so we went with this option. I had the actual molded parts in hand in less than 30 days from ordering the tooling and that time included shipping the parts from China. 

Depending on the scenario, the only viable option to make a business model work is Chinese manufacturing. It's a risk of course but the price disparity may make that risk acceptable. 

fredswain posted:

I've dealt with Chinese and American injection molding companies at work. I've had molds made in the US and the parts made locally. Finding an American injection molding company is easy. They are just very expensive by comparison. I've had a mold made in China and then sent to a US company to produce the parts here. No, the Chinese government does not own part of it. You do pay a premium to take possession of it though.

I think we agree on the mold ownership issue. I do work for a company that tools and manufactures in China. I know for a fact if we told the current tooling holders we were picking up the tooling and sending it stateside there would be a large fee or the tooling would meet with a horrible accident making it scrap value only. Saw that last one happen to a competitor. 

But release our tooling with no strings....not happening.

palallin posted:

I don't buy the argument that production costs here would be 2 or 3 or 4 times the costs in China:  when the production moved FROM here TO China, prices rose; they didn't fall.

I don't know. I remember getting our dealer catalog and price sheets in the mid to late 90's and gasping at locomotives based on the post war 736 in the $800 range. It may have had Railsounds but no TMCC. F3 sets in the same ballpark or more. Trainmasters and GG-1's in the $600 range. There have been sets with these engines, often with brand new tooling offered with cars for hundreds less than those prices since. What has happened is Lionel has started tooling up tons of new and detailed product and those cos what they cost. 

Welcome to one of the joys when you outsource things to another company (and this applies across the board, not just a China thing), in reality you have very little control over the other company, Service level agreements only work when you have real power to enforce them, but when a manufacturer basically has all the power because shifting production is so difficult, in the end there isn't much you can do, you can try suing them,not paying them, but all that will happen then is they will retaliate knowing you can't go anywhere else. SLA's work where the one doing the outsourcing has some leverage, for example, if you site host  your software on a vendor's cloud or server farm and they screw up, it is a lot easier to find another place to run it (as long as you own your own code and the site place didn't write the code, too...). If you own the tooling and you have the backing of the law and the courts(as  you would in the US, Canada and Europe, unlike China) you can shift production, China even if you own the tooling it is next to impossible to move it, lot of places that do that end up creating new tooling from what i have been told by people who do such work.  It gets even more complicated with suppliers, one of the things that made lean production work is they shifted from low cost bidding to working with suppliers in a kind of partnership, to allow real control over the quality of the parts themselves (which in Chinese supply chain doesn't exist, supplier and vendor relationships are like GM in the 1950's).  

And sure, getting caught short like this happens here, people have been left high and dry when a vendor shuts down, but it happens a lot less frequently, in part because there are both contractual and legal requirements that require notification, to give the outsourcer the ability to find another vendor and shift production (doesn't stop fly by night vendors from the old midnight pull out of town dodge, happens with construction businesses all the time), but this happens quite frequently overseas from what I have seen. 

 

The companies and we the customers are caught in the same bind, because of the nature of this market the company can't/won't operate its own factory, and both of us get the shaft when the supplier goes under or otherwise doesn't do what expected, it is the nature of the beast. If this were a much larger market, for something like tv sets or the like, would be a different story, or Iphones for that matter, there is so much money they you aren't talking about small companies using small factories overseas, very different relationship. 

BRIAN WHITE posted:
palallin posted:

I don't buy the argument that production costs here would be 2 or 3 or 4 times the costs in China:  when the production moved FROM here TO China, prices rose; they didn't fall.

I don't know. I remember getting our dealer catalog and price sheets in the mid to late 90's and gasping at locomotives based on the post war 736 in the $800 range. It may have had Railsounds but no TMCC. F3 sets in the same ballpark or more. Trainmasters and GG-1's in the $600 range. There have been sets with these engines, often with brand new tooling offered with cars for hundreds less than those prices since. What has happened is Lionel has started tooling up tons of new and detailed product and those cos what they cost. 

Agreed, the only valid comparison might be comparing a comparable product going overseas, for example, a conventional engine, or something like a traditional boxcar or the same. You can't compare a conventional engine from 1999 with a legacy engine of today, two different beasts, and or compare a semi scale engine against a scale one.  It would be interesting to look at that transition period, what a conventional engine made in the US just before it went to China cost, against what it cost after the move (would be willing to bet same cost, but of course the profit/unit for lionel went up). I think a lot of the 'price bloat' after going to China reflects the evolution of the market, in the late 1990's TMCC was state of the art, after moving to China more and more engines were command control, detailed units, and then with Legacy went even more upscale, so it is really hard to compare. 

Given where China is these days  with manufacturing, with tight labor and the way costs rose there, I wonder if the factory that shut down did so because it was no longer profitable to make the units, and how much the cost is going to rise on the stuff when it moves to a new factory. With Atlas, we can have a direct comparison, we know what the engines and rolling stock cost right now, be interesting to see after Atlas moves its tooling how much more it costs, wouldn't be surprised if it costs them a lot more and we see it downstream, it may be likely the contract factor got squeezed by having a contract price that became less and less profitable. 

 

We sont see any Atlas O locos or rolling stock for a long time. They've got an HO and an N scale line that are the bread and butter and sell significantly more than the O line. They'll get those product lines up then get to the O scale line. It wouldn't surprise me if Atlas decided the O scale line wasn't worth the effort and sold it off or just walked away

This factory produced for a number of other Importers also, see Intermountain letter in a previous post so not just Atlas is affected, obviously since HO and N gauge are their mainstays they will make every effort to get another factory the O gauge line could be a casualty or a later to market line. The time frame is anybodys guess. JMO

Did Affatech make the new Lionel 21" passenger cars?  One of my dealers told me it would be a long wait for the UP Challenger cars and the Theater Cars I ordered.  Way beyond Christmas of 2018.

The Chinese 2025 Plan wants their manufacturers to move to more expensive products in 2025, like solar panels, etc. China does not want the reputation for cheap goods. They want items that have larger profits. This new 2025 government policy could move small piece-work out of China factories.

I skimmed through this, but I did not see any solid confirmation that Lionel, in any scale, is hung up in this.  I have a few S gauge items on order, like the new run of Baldwin’s.  

Also, I am curious what HO outfit Lionel bought up, if it has been identified on the forum I missed it, further more I wonder if their production plans in HO got jammed up with this factory closing.  

Ben

Make no mistake about this. Atlas will be badly hurt by the closing of its main production facility because it affects the company’s N, HO and O scale line simultaneously. The cash flow problem alone might require some short-term financing, adding to Atlas’ burden.

Worse yet, Atlas recently purchased, or agreed to purchase, Walthers’ N scale locomotive line. The plant closing neutralizes Atlas’ ability to earn revenue from that investment.

It won’t be easy finding a production facility to fill all of its needs. And fast!

As for some of those comments about a lack of sympathy due to Atlas’ decision to manufacturer its trains elsewhere, think before you type. Atlas never made any locomotives domestically. It established that part of its business on the idea of working with credible, even exceptional, model makers (particularly Roco and Kato) internationally as far back as the 1970s and had a good Chinese partner in Sanda Kan before it all began to unravel in 2010.

I sympathize greatly with Atlas and hope it can weather this storm.

bigkid posted:
BRIAN WHITE posted:
palallin posted:

I don't buy the argument that production costs here would be 2 or 3 or 4 times the costs in China:  when the production moved FROM here TO China, prices rose; they didn't fall.

I don't know. I remember getting our dealer catalog and price sheets in the mid to late 90's and gasping at locomotives based on the post war 736 in the $800 range. It may have had Railsounds but no TMCC. F3 sets in the same ballpark or more. Trainmasters and GG-1's in the $600 range. There have been sets with these engines, often with brand new tooling offered with cars for hundreds less than those prices since. What has happened is Lionel has started tooling up tons of new and detailed product and those cos what they cost. 

Agreed, the only valid comparison might be comparing a comparable product going overseas, for example, a conventional engine, or something like a traditional boxcar or the same. You can't compare a conventional engine from 1999 with a legacy engine of today, two different beasts, and or compare a semi scale engine against a scale one.  It would be interesting to look at that transition period, what a conventional engine made in the US just before it went to China cost, against what it cost after the move (would be willing to bet same cost, but of course the profit/unit for lionel went up). I think a lot of the 'price bloat' after going to China reflects the evolution of the market, in the late 1990's TMCC was state of the art, after moving to China more and more engines were command control, detailed units, and then with Legacy went even more upscale, so it is really hard to compare. 

Given where China is these days  with manufacturing, with tight labor and the way costs rose there, I wonder if the factory that shut down did so because it was no longer profitable to make the units, and how much the cost is going to rise on the stuff when it moves to a new factory. With Atlas, we can have a direct comparison, we know what the engines and rolling stock cost right now, be interesting to see after Atlas moves its tooling how much more it costs, wouldn't be surprised if it costs them a lot more and we see it downstream, it may be likely the contract factor got squeezed by having a contract price that became less and less profitable. 

 

So found something comparable. Last years in Michigan vs China. Basic starter set with 4-4-2 with smoke, headlight, whistle, few cars, 0-27 track and the worst 40 watt transformer ever sold were $199.99. 2004 a similar set that now had FasTrack and a CW-80 had a retail of $189.99.

NotInWI posted:

I skimmed through this, but I did not see any solid confirmation that Lionel, in any scale, is hung up in this.  I have a few S gauge items on order, like the new run of Baldwin’s.  

Also, I am curious what HO outfit Lionel bought up, if it has been identified on the forum I missed it, further more I wonder if their production plans in HO got jammed up with this factory closing.  

Ben

Lionel 21" scale cars were made by AFFA as was the F40PH. 

Jim R. posted:

Worse yet, Atlas recently purchased, or agreed to purchase, Walthers’ N scale locomotive line. The plant closing neutralizes Atlas’ ability to earn revenue from that investment.

Interestingly enough, Walthers was not produced by AFFA so the N scale tooling bought from Walthers likely won't be affected.  However, the scale of this in HO and N is certainly enormous. 

In additional to Atlas, the following companies have made some sort of announcement that they are also affected adversely by the closure of Affatech (some of which have already been mentioned here): Bowser, Bluford Shops,  ExactRail, Fox Valley Models, Intermountain, Spring Mills Depot, Trainworx Inc., and Wheels of Time. Two more firms, Tangent Scale Models and Moloco Models are also thought to be affected but have made no official announcement either way.

And as Jonathan pointed out above, Affatech was also doing specific products for Lionel, and who knows how many others.

Athearn, Pacific Western Rail Systems, Rapido, Scale Trains and Walthers have all said they are NOT affected, but Walthers has said that their vendor for Code 83 track, Shinohara is also ceasing production.

These companies will be seeking new production facilities, which may or may not put more pressure on the existing facilities. And with one fewer company manufacturing trains, this also potentially lends itself to price increases. And not only do they need to find a new facility, but then they need to go the difficulty of moving their dies and tooling from a closed facility to one that is operating.

And more possible closures are not out of scope. There are have been some news stories about factory closures in China due to their new environmental laws.

https://www.smartchinasourcing...procurement-program/

https://www.forbes.com/sites/t...ckdown/#2c1ef5274666

EDIT: I should note that Walthers was notified that after filling the current order, Shinohara would cease track production. Whether that means more than just simply track for one company, I cannot say. But obviously, there's another company that will be seeking a new manufacturer for a least one product line.

Last edited by brianel_k-lineguy
brianel_k-lineguy posted:

In additional to Atlas, the following companies have made some sort of announcement that they are also affected adversely by the closure of Affatech (some of which have already been mentioned here): Bowser, Bluford Shops,  ExactRail, Fox Valley Models, Intermountain, Spring Mills Depot, Trainworx Inc., and Wheels of Time. Two more firms, Tangent Scale Models and Moloco Models are also thought to be affected but have made no official announcement either way.

Although not involved in O scale/gauge, another manufacturer directly and adversely impacted by the closure is American Z Lines (AZL), a leading manufacturer in the world of Z scale that produces high-end Z locomotives and rolling stock based largely on U.S. prototypes. I believe all of their production came from Affatech. An aannouncement on their member forum strongly reinforced their commitment to the Z market and to finding a new supplier, but they also cautioned that consumers should avail themselves of product currently available and be prepared for significant delays in new product until a new supplier can be found and production resumed. That may take a considerable time.

My perspective on this whole unfortunate matter:

O gauge/scale consumers should also be prepared for a rather dramatic slow-down of new product coming in from overseas. This applies to ALL O gauge train manufacturers, including some not directly named or impacted by the Affatech closure. In short, if there's something you would like to have that is currently available or (especially) already in the pipeline on a container ship or in a warehouse, you may want to satiate your consuming desires now if you can possibly do so rather than pin your hopes on something that has already been cataloged or announced, but is still possibly going to be a year or even several years away.

Allan Miller posted:
brianel_k-lineguy posted:

In additional to Atlas, the following companies have made some sort of announcement that they are also affected adversely by the closure of Affatech (some of which have already been mentioned here): Bowser, Bluford Shops,  ExactRail, Fox Valley Models, Intermountain, Spring Mills Depot, Trainworx Inc., and Wheels of Time. Two more firms, Tangent Scale Models and Moloco Models are also thought to be affected but have made no official announcement either way.

Although not involved in O scale/gauge, another manufacturer directly and adversely impacted by the closure is American Z Lines (AZL), a leading manufacturer in the world of Z scale that produces high-end Z locomotives and rolling stock based largely on U.S. prototypes. I believe all of their production came from Affatech. An aannouncement on their member forum strongly reinforced their commitment to the Z market and to finding a new supplier, but they also cautioned that consumers should avail themselves of product currently available and be prepared for significant delays in new product until a new supplier can be found and production resumed. That may take a considerable time.

My perspective on this whole unfortunate matter:

O gauge/scale consumers should also be prepared for a rather dramatic slow-down of new product coming in from overseas. This applies to ALL O gauge train manufacturers, including some not directly named or impacted by the Affatech closure. In short, if there's something you would like to have that is currently available or (especially) already in the pipeline on a container ship or in a warehouse, you may want to satiate your consuming desires now if you can possibly do so rather than pin your hopes on something that has already been cataloged or announced, but is still possibly going to be a year or even several years away.

I agree with Allan, this may only be the tip of the iceberg with issues with China production, and it isn't just finished trains, it also affects components manufacturers elsewhere use (not talking Affatech here).  With all the trade stuff swirling around (and it looks like it is getting ugly), there could be all kinds of things that happen, you could see ports refusing to handle goods from China, you could see China retaliating by not allowing or slowing down component sales/shipment. Hopefully it will all be noise and rattling swords, but the global supply chain is really complex, and as Mr. Scott said in one of the Star Trek movies, the more you complicate the plumbing, the easier it is to stop up the drain......

Having done business over there for many years now, usually things happen for straight forward reasons and not conspirical, government blaa blaa (is that a real word?) reasons. 

I met with KK on two separate occasions over the last 8 years.  Once in Hong Kong to see if we could use them as a new builder and recently a social visit when he was here in California. 

He's a straight forward guy, in his 60s now. We discussed the in's and out's of manufacturing in China. KK is Canadian and speaks english fluently. I think his family lives here in CA too.

From my other contacts in China I know that local governments are making sweeps of small businesses that support these factories (Etching, Plating, Painting) to make sure they are not violating new EPA style rules. In some cases they shut down these small business permanently. This was causing the remaining subcontractors to raise their prices, making all these models more expensive to make anywhere in China. 

AFFA tech was not immune to this. I think i remember KK telling me me that they had a forced shut down for 3 months due to these kind of issues. But you never know the real reason. It could have been cash flow, or owing subs who won't cooperate until you pay them in full.  I doubt it is a government conspiracy over trade issues. 

So I read KK decided to throw in the towel or retire.  I think there is a good chance that an internal manager or several employees will open their own factory and continue to support those left in the lurch. Why wouldn't they? There's money to be made.  If I were any of these importers affected I would run over there and camp out of a few weeks. Get a translator and meet with as many employees / managers as they can to secure their tooling / parts / drawings, what ever they can.  You can have it moved, stored nearby, people there are generally honest, kind and helpful. 

I wish them the best.

Scott Mann

AMCDave posted:

Bowser e-mail says they have a manufacture for their freight cars....but no word on locos....very different.

Dave, maybe they've already lined up another facility. There's an announcement today on their FB page, that they are proceeding with an HO 70 ton 2-bay hopper.

But from July 30, the following was posted on their FB page:

"We have been informed that our foreign factory is closed. This will delay HO and N Ready To Run cars, trolleys, Cal Scale and our locomotives. We are looking for a new factory. All delivery dates are now TBA (To Be Announced). Thanks for all support you have given Bowser."

Hopefully all these affected companies can get at least some production going. It'll be hard for these companies to operate if there's no money coming in the door.

As of today...

Affected are:

Atlas (Official Announcement)
Bluford Shops (Official Announcement)
Bowser (Official Announcement)
ExactRail (Official Announcement)
Fox Valley Models (Official Announcement)
Intermountain (Official Announcement)
Spring Mills Depot (Official Announcement)
Trainworx Inc. (Official Announcement) Note: Not Darci's Trainworx
Wheels of Time (Official Announcement) 

Not affected are:

Athearn (Official Announcement)
Bachmann/Kader - Kader owns their factories
Rapido (Official Announcement)
Scale Trains (Official Announcement)
Walthers (Official Announcement)

Not dependent on China:

Accurail (Illinois based with in house production)
MTL (Oregon based with in house production)
Kadee (Oregon based with in house production)
Kato (Japanese company with production based in Japan)
Shinohara (Japanese based, but shutting down due to retirement)

From what is being published, the impact is going to be most felt in HO and N scale, however there is also collateral damage to the O and Z scale sectors.

Andre

 

It's business and not personal. I love my trains and I am miffed that these things happen but the reality is the world did not stop spinning, hopefully your are all healthy, have a good family base to carry the rock. It a hobby, we are all passionate but after working in manufacturing for a extremely large Japan based company these things happen and if you don't have a back up plan your dead. The primary reason manufacturing leaves the US is burdensome regulations and costs. If these guys have all their tools a shift to another place and factory is painful but can be done. Personally, I am glad as quality of MTH, Lionel and a few other has gotten worse over time. How many times under warranty have you sent a unit back to MTH or Lionel and have it sit in their repair shop for months.

I can tell you this is a fact, I have a brand spanking new 4014 that I got at Christmas and I am still waiting for a board. the unit was DOA out of the box and three boards later its in the "shop" again.

I would love to see manufacturing back in Korea, Japan or the USA. Prices have significantly increased and quality down when manufactures move to China. 

Just to add a small note here. I personally hope locomotive kits make a come back, in HO. 

At one point it was the majority of what we had, in any scale. There is only one HO manufacturer still in business from the old timers, hobbytown of Boston. They have been making quality die cast locomotive kits since 1946. Everything is made in the USA, with die casting & plastic injection molding all done in the same factories for over 50 years, and all the machined & turned parts being made locally to the factory.

That being said, they were looking to have a die made to make a die cast, 4-wheel diesel side frame for the FM C-Liner. Only one company in the USA wanted to cut the die, and the price was $11,000! (This is a piece no more than 2" long, 1/2" high and less that 1/4" thick.) This did not include the 3-D drawings.

A Chinese company quoted the tooling, including all 3-D drawings for $1,100. 

It wasn't done, thankfully, since they know all too well how those guys operate.

So to date the only part made overseas is the can motor, and only because the prices here are in the $40 range per motor, as opposed to the $2.00 range there.

And before it's said, the company that offered the motors here stressed the motors were "assembled in China".

Nick

 

 

 

 

For years I have berated myself for "buying too much stuff that I never use and that, in reality, hardly ever see and I need to sell most of it..."; huh. Now my stash is looking better to me as getting more is going to get harder, more expensive - or both. When it is made. If it is made. 

I'll also raise my prices....

Joking aside, we may be seeing the perfect storm (sorry for that worn-out cliche) in our 3RO hobby. I am not concerned about the future health of the other scales; they will survive better - younger, cheaper, less grumpy.

Fewer and fewer of us around to buy items, many of those of us left have everything, "been there, done that", and now the Supply part of Supply and Demand (cliche, again) has caught a cold to go along with the one that the Demand side has been fighting for a few years. The interaction may prove to be interesting. Or not.

You know the old, supposedly Chinese (fitting) curse: "May you live in interesting times".  

Well.  I have to confess that with my original post at the start of this thread that I misunderstood the Atlas situation.  I thought that the shutdown was it's annual summer vacation.  Wrong.  Too bad for Atlas. 

I have a good bit of Atlas stuff and will miss their new offerings.  Probably a lot of us are in the same situation.  As we age it is really difficult to place an order that will be delivered who knows when.     That's the way it is.  Great products,I hope that Atlas has the will and desire to continue,especially with their O scale products.  Business is tough. 

Norm 

I made mention earlier about Atlas' supply chain for their track being circumspect.  And then I started thinking about last years Golden Spike Club.  Did any one else receive their car extremely late? Or was I the only member to receive it late.  Now I assume that due to this debacle that 2020 might be a target delivery date for the 2018 membership. I am quickly thinking that a factory shut down is just another clue that was missed in the problem of dealing with China as a supplier. 

Last edited by Loose-Caboose
Allan Miller posted:
palallin posted:

*sigh*  Yes, of course the Big Corporations' greed is completely responsible for all our woes.  How silly of me to suggest that economic reality has anything to do with it.

Other companies have shown that it is possible to return/retain domestic production with reasonable prices--heck, Lionel is doing some of that themselves.

You can be quite sure that, aside from production of select items such as rolling stock where the tooling is already here (some Lionel product, for example), you will NOT see the manufacturing of major items such as motive power return to the U.S. There may be alternative countries that can handle these things to avoid sticking with China, but I seriously doubt that any of the toy and model train manufacturers, regardless of scale, will return full production to the U.S. As desireable as that might be, it just does not make a whole lot of economic sense these days, especially since, as I understand it, toy train makers today with production in China do not even have full control/ownership over their own tooling.

When the manufacturers moved production to China in the late 1990s, I said to myself, “They’re making a deal here from which there is no return.” Once you go to China, China takes ultimate control of what you bring with you. 

That’s how they have grown to be what they are; western companies gave them everything they had in order to save big on production costs. 

As Pogo said, “We have met the enemy and he is Us.”

Jim Berger posted:
jim pastorius posted:

Hang on to all those old Lionels because when the current China supply dries up those buggers will be after our old stuff.

If it comes down to that, I will likely get out of the hobby before I go back to the old lionels......

If it comes to that, I would go back to HO or N.  I have plenty of good models in those scales.

GG1 4877 posted:
Jim Berger posted:
jim pastorius posted:

Hang on to all those old Lionels because when the current China supply dries up those buggers will be after our old stuff.

If it comes down to that, I will likely get out of the hobby before I go back to the old lionels......

If it comes to that, I would go back to HO or N.  I have plenty of good models in those scales.

And more on the way. Rapido already had my discretionary income locked up for quite a while...and now I'm trying to figure out how to afford a New Haven EP-5. I swear those people at Rapido hate me...

Jeff C

AlanRail posted:

If Atlas WAS shutting down we would have heard by now. Ahhh  the rummer mongers.  

---->NOTHING on their website even suggests anything of the kind!

No one said Atlas is shutting down. But the fear is that this could hurt Atlas badly, given that Affatech produced so much of its N, HO and O scale products.

It does sound like Atlas has other manufacturing sources, but it will take time and money to transfer tooling, train workers and schedule production at other facilities in China.

As was posted earlier in this thread, Atlas addressed what happened and what it will do in this note:

Atlas has received notification from one of our locomotive and rolling stock suppliers that they have closed their factory. (Please note Atlas track and accessories are NOT affected by this delay.) Atlas is currently working with our network of suppliers to transfer the projects to others for completion. This will cause a delay in some previously ordered products. We apologize for this delay, thank you for your continued support, and will update you with more information as it becomes available. 

Last edited by Jim R.

Has anyone projected what costs might approach to build, let's say, the GP7 loco or one of the Zephyr cars? I hear minimum run of cars is 200?  Start with the molds, motors, wire, etc. What type of make up is there? What does it cost to ship from China? What would the costs run to build them here? Surely someone can give a better guess than just saying 700.00 or 800.00.

Thanks for the info.

Dick

CBQer posted:

Has anyone projected what costs might approach to build, let's say, the GP7 loco or one of the Zephyr cars? I hear minimum run of cars is 200?  Start with the molds, motors, wire, etc. What type of make up is there? What does it cost to ship from China? What would the costs run to build them here? Surely someone can give a better guess than just saying 700.00 or 800.00.

Thanks for the info.

Dick

Although I can't speak to the exact costs of manufacturing, to give you an idea of how cheap international shipping is, I read somewhere it costs less than $2 to ship a flat screen tv from China to the US. That is obviously assuming you have a full 40 foot container of them and split the cost. Shipping is a negligible part of the cost of our models.

jim pastorius posted:

I have a hunch that the people who know actual cost figures don't want to say. You would probably be shocked at the actual low price. But there are always a lot of other operating costs and some profit  for everyone involved factored in.

I think you could back into the manufacturing cost by using assumed margins along the distribution channel.  I see a very mature market, equipment built to last a lifetime, decreasing demand based on demographics and a very competitive price point with the likes of eBay etc...  The cost to the manufacturers would have to be low enough (probably almost unbelievable) to keep there business viable.  Razor thin margins I expect.  It would be helpful to know production run numbers.  I'm sure they are available somewhere. Then create a moving chart (5 years) and get out the magic 8 ball.  That would be another topic at a later date. 

Something I like to point out from time to time regarding the high cost of trains these days:  be careful on Ebay. Sometimes you can find really good deals, but other times you can buy a wanted item from one of the dealers advertising on this forum for quite a bit less. Do your homework.

I am especially amazed at the prices some Ebay sellers are asking for new/current production Lionel. I find that dealers often have lower prices than that and frequently much lower. It pays to shop around!

Dave Warburton posted:

Something I like to point out from time to time regarding the high cost of trains these days:  be careful on Ebay. Sometimes you can find really good deals, but other times you can buy a wanted item from one of the dealers advertising on this forum for quite a bit less. Do your homework.

I am especially amazed at the prices some Ebay sellers are asking for new/current production Lionel. I find that dealers often have lower prices than that and frequently much lower. It pays to shop around!

Ebay seems to have shifted long ago from folks selling things to mostly "stores" selling things and the prices reflect this. Yes, many OGR Forum sponsors sell things for less than they are listed for on the "bay" site. Check them out!!

As a commentary on the situation with Atlas et al and outsourced suppliers, an article in today's NY Times by a business professor had a couple of relevant paragraphs (the topic was about Apple Computer and its business model, that is cash flow heavy versus being heavier on the profit side)

"How does one achieve this apotheosis of the asset-light strategy? First, create a supply chain in Asia run by companies willing to invest in low-return projects that create your products." This is very relevant to what the train manufacturers are doing more than likely, they are working with contract factories that likely operate on low margins, hair thin, to produce the product, so the company can maximize profit on each unit and also not have problems with cash flow (part of Apple's strategy is they pay vendors very slowly, like 100 days between delivery and payment, not sure the train manufacturers can get away with this, given how small they are, but they may find vendors based on willingness to accept deferred payment as well, which can cause cash flow problems with suppliers)

"Second, hold those suppliers under your thumb." Apple gets away with what  they do because suppiers know Apple is a giant and will be a big customers, so they get away with negotiating razor thin margins for the suppliers and things like net 100 day payment, size is important. 

 

"Idolizing asset-light strategies, however, can also lead to underinvestment, an excessive reliance on outsourcing and the artificial division of companies to avoid hard assets." This doesn't entirely apply to the train manufacturers, but the fact remains that as others have pointed out, the train companies are asset light, other than designing the trains and other products, they don't have  skin in the game with much in the way of physical facilities, most of what they have here are relatively small capital investment in buildings (headquarters, or with small companies, maybe their house), maybe some wearhouse space, and whatever support  they have. Not criticizing this, given the small size of the train market, likely is the only strategy that would work. 

"The accomplishments of Apple’s model are substantial. But the financial strategy that has worked so well for Apple is a risky one for less capable companies with weaker strategic positions. For them, aping Apple can just as easily result in too much debt on their balance sheets, precarious supply chains and deferred opportunities for investments."  Again, this isn't a direct analogy, but parts of it do apply.A company like Apple, that is so huge in the  market, is not weak strategically, they can do a lot more damage to suppliers then the suppliers can to them, if their suppliers pulled what happens with the train manufacturers, that supplier would find themselves in deep doo doo, but with train manufacturers they don't have easy alternatives. 

Again, this isn't a critique of the train manufacturers, but rather it explains why something like Atlas could happen, I suspect a lot of the vendors they use are small firms willing to operate on very tight margins themselves, and when you have that you end up with what we see in the industry, delays in production, problems with production, and even factories shutting down. The sheer size of an Apple's business allows vendors to operate on razor thin margins, the bulk of the profit makes up for that as well as the regularity of production, it is very different for the relatively small companies that make trains. 

It is an interesting article if anyone is interested

ttps://www.nytimes.com/2018/08/06/opinion/apple-trillion-market-cap.html

Hi The 50 th National O Scale convention had a second run of Atlas cars 2 and 3 rail,  on order when we were blindsided by this factory shutdown, in spite of this Atlas has been very cooperative with us and has agreed to work with our group.   Atlas will be our main sponsor and will be at our convention. Patm42 

This thread very clearly shows why a few people are in the business of manufacturing trains and why most are not.  It is not for the faint of heart.  This is especially true when we want better quality, more variety, lower costs, delivered sooner.  In my nearly 10 years of consulting I have learned a lot about the business side and personally I'm glad it's not necessary to my income.  We constantly complain about the price of a new train, yet fail to remember how much a manufacturer puts out as an initial investment just to bring the project to market with the hope that it will sell out.   

To anyone who thinks this is easy, please start a competing company and show those greedy manufacturers how "it's really done"    

Rather get into the proforma of a model project which involves not only numbers but relationships, I simply wish all the affected manufacturers in all scales the best to get their product back to market.   

1. "How does one achieve this apotheosis of the asset-light strategy? First, create a supply chain in Asia run by companies willing to invest in low-return projects that create your products.

No one in Asia wants to do this unless they are borrowing all the money from their cousin at the Bank, and putting 25% in their pocket, or mailing it to their wife in kids in California.

2. "Second, hold those suppliers under your thumb. 

This is an illusion. They are the supplier and are in total control of your product flow. Contracts in China are in-forcible in the US  (THEY CAN SUE YOU IN THE US FOR BREACH OF CONTRACT) . Contracts in the US are not in-forcible in China (CHINESE COURT WILL NOT HEAR A US BREACH OF CONTRACT OR A JUDGEMENT BY US COURT). Look it up. I had to and it scared the heck out of me.

3. "Idolizing asset-light strategies, however, can also lead to under-investment.  I agree with this statement. That means a small company like mine can delegate design, tooling and production to different companies overseas without having to know how to, or do it ourselves. But put this under one roof overseas and the vendor has you over a barrel, and worse yet, they can reproduce your product and compete against you if they are smart enough.

4. In China, if Apple walks, they have ZTE and Wahwei to fill in. Once the gov sends the word, the public will follow and not buy Apple again. They have no power in China. That's why they are bringing production back to the US.

Being in business myself, I rely on my close relationships with our vendors in China and Korea. It's personal. I've known them for many years, and we trust each other. Keep them happy and they will be loyal. Try to squeeze them, you'll be without a supplier faster than you can say, Rumpelstiltskin. 

That's my experience. If I would have known all this when I left my day Job at Blockhead (Lockheed), I would have stayed.

Bi-weekly paychecks, cheap health insurance, a pension plan... What was I thinking? I do love what I do. I love being a project engineer and managing this small business and I love making our customers happy. That's worth it I guess. 

 

Last edited by sdmann

I was shocked to find all my old Atlas HO track , is now old, all labeled, "Made in USA". Part of it is just how poorly educated us citizens have become. A couple from over seas wanted to open a candle factory, not trains, but a manufacturing business, in I can't quite remember, New Jersey, or Maryland, and had to send the management back for remedial addition and subtraction. Given they were in an area of the U.S.A. with the highest levels of education achievement from their K-12, it says trying to bring it back may be impossible from the poor educations received here unfortunately.

john in western pa posted:

In all due respect,  given the source of manufacture for nearly all of our new trains;   tariffs, international politics and trains are about to collide, BIG TIME!!!

Some good news: At the LCCA convention, Lionel's president, Howard Hitchcock, said that the tariffs currently being talked about would NOT affect our trains. They would target items of major economic significance; toys are significant to us, but not in the global economic scheme.

Keith L posted:

Some good news: At the LCCA convention, Lionel's president, Howard Hitchcock, said that the tariffs currently being talked about would NOT affect our trains. They would target items of major economic significance; toys are significant to us, but not in the global economic scheme.

Our Administration would be quite the Grinch if we put tariffs on toys. lol. But, who knows …. in our continuing trade war with China?

I read at Reuters that toys, games, and sporting goods imports from China totaled $29 Billion last year. 

So, three months from now, when we're deciding which new tariffs to impose …. will it be office equipment, or will it be Junior's LEGO set? lol. And, what about three months after that, after Christmas?

Anywho, it's a strange world. We're just a bunch of nice folks who like to play with toy choo-choo trains, and we have all this drama of factory closures, tooling possession, etc 

Looking forward to Atlas shipping product.

Last edited by CNJ Jim

In the USA, we have turned into (or been turned into) a bunch of "WalMart shoppers"- we want everything cheap.....but a LOT of it. 

I teach middle-school kids "Global Economy" as part of the current version of Junior Achievement.  "JA" WAS (1970's) an organization that a kid joined for a school year. meeting multiple times to run a simulated business and make a product is no more.  Now we get ONE 1/2-day session a year.

As part of that session, I use "Jeans and Mustangs" as a tool.  First I ask all who own at least 4 pairs of jeans to raise their hands- almost every child in a class of 25 or so does (sometimes I have to clarify that "plain" blue jeans and decorated ones are ALL still jeans.)  

I tell them that- in 1967, there were ONLY USA-made jeans, and that Levi Brand cost $18 per pair. They ALL think of Levi's as higher quality than many others, and are amazed at the low $18 1967 price.  Their parents are paying as low as $ 7.50 to as much as $ 25 at WalMart - all made in the far east. 

I then tell them that I only had TWO pair- new for the beginning of the college year, one to wash and one to wear.  In spring- those became by "work jeans" for wearing on the township road crew.  But-today- two pair is not acceptable.

I tell them that in 1967, a base Ford Mustang cost $ 2400, and that today it is roughly 10X that.  Of course, there is NO comparison- it is a far better car- disc brakes, A/C, better fuel economy, galvanized steel, etc. etc.    As well, the Mustang is largely made in the USA, using American materials, and union labor. 

I for one also admire the fact that my PW Lionel products were high-quality "toys " that still run 65 years later, and were not only "Made in USA" but also made in one of the highest-cost of living areas OF the USA.   Our country COULD do that again... IF we were willing to pay the price.  Our people are just as skilled, although maybe our education system puts too much emphasis on "white collar" careers and too little on skilled trades.

My point:  IF we consumers were willing to buy quality, and pay more for "Made in USA", willing to pay more to have more US workers employed and IF we would be satisfied with "just two pair" (or just two engines?) ---then we could have more USA-made goods. 

It IS all up to us.  It is NOT "management", or "stockholders"-  it is the consumers.

Mike Wyatt posted:

In the USA, we have turned into (or been turned into) a bunch of "WalMart shoppers"- we want everything cheap.....but a LOT of it. 

I teach middle-school kids "Global Economy" as part of the current version of Junior Achievement.  "JA" WAS (1970's) an organization that a kid joined for a school year. meeting multiple times to run a simulated business and make a product is no more.  Now we get ONE 1/2-day session a year.

As part of that session, I use "Jeans and Mustangs" as a tool.  First I ask all who own at least 4 pairs of jeans to raise their hands- almost every child in a class of 25 or so does (sometimes I have to clarify that "plain" blue jeans and decorated ones are ALL still jeans.)  

I tell them that- in 1967, there were ONLY USA-made jeans, and that Levi Brand cost $18 per pair. They ALL think of Levi's as higher quality than many others, and are amazed at the low $18 1967 price.  Their parents are paying as low as $ 7.50 to as much as $ 25 at WalMart - all made in the far east. 

I then tell them that I only had TWO pair- new for the beginning of the college year, one to wash and one to wear.  In spring- those became by "work jeans" for wearing on the township road crew.  But-today- two pair is not acceptable.

I tell them that in 1967, a base Ford Mustang cost $ 2400, and that today it is roughly 10X that.  Of course, there is NO comparison- it is a far better car- disc brakes, A/C, better fuel economy, galvanized steel, etc. etc.    As well, the Mustang is largely made in the USA, using American materials, and union labor. 

I for one also admire the fact that my PW Lionel products were high-quality "toys " that still run 65 years later, and were not only "Made in USA" but also made in one of the highest-cost of living areas OF the USA.   Our country COULD do that again... IF we were willing to pay the price.  Our people are just as skilled, although maybe our education system puts too much emphasis on "white collar" careers and too little on skilled trades.

My point:  IF we consumers were willing to buy quality, and pay more for "Made in USA", willing to pay more to have more US workers employed and IF we would be satisfied with "just two pair" (or just two engines?) ---then we could have more USA-made goods. 

It IS all up to us.  It is NOT "management", or "stockholders"-  it is the consumers.

2nd and Hallelujah and amen to that!  

How many people on this forum think people who buy one or two higher end like Sunset are crazy when you can get 10 MTH which are "just as good 10 feet away".

When I taught JA about 10 years ago it was one hour a week for a semester. 

The situation might not be too bad for the modeler.  Those who like shiny new things (like a new automobile every year) might be disappointed, but this could be an opportunity for people to build kits, buy previously enjoyed models (OK, OK, used), or even revive the mostly forgotten art of scratchbuilding.  If supplies of brand-new O-Scale really do dry up for awhile, I believe we can weather the storm.  Model RR manufacturing has bounced around Asia for decades, starting in Japan, then migrating to Korea and China.  If we cannot stir ourselves to produce domestically, perhaps there is a country (not necessarily Asian) which would like to become a supplier of manufactured model RR goods.  Didn't Atlas originally import from Austria?  While there is no way to spin this as anything but bad news, those of us not commercially invested in the hobby may be just fine in the long run.  

When life hands you lemons, it's time to make lemonade.

Bill Chaplik posted:

The situation might not be too bad for the modeler.  Those who like shiny new things (like a new automobile every year) might be disappointed, but this could be an opportunity for people to build kits, buy previously enjoyed models (OK, OK, used), or even revive the mostly forgotten art of scratchbuilding.  If supplies of brand-new O-Scale really do dry up for awhile, I believe we can weather the storm.  Model RR manufacturing has bounced around Asia for decades, starting in Japan, then migrating to Korea and China.  If we cannot stir ourselves to produce domestically, perhaps there is a country (not necessarily Asian) which would like to become a supplier of manufactured model RR goods.  Didn't Atlas originally import from Austria?  While there is no way to spin this as anything but bad news, those of us not commercially invested in the hobby may be just fine in the long run.  

When life hands you lemons, it's time to make lemonade.

I have an Atlas Bridge made in Austria, so yes they did.

I suspect that O rolling stock and locomotive COULD return to the US, but we’d pay a lot more.

Once, after buying a British modeling magazine to steal ideas, I went and perused the ads for O scale locos, and saw a listing for a loco made by a certain well-known manufacturer who used to make stuff for Con Cor back in the day.

NOT CHEAP. You could get two or possibly 3 MTH locos for the price. But I think they are made in Europe, not China.

Atlas rebranded a lot of Kato Japan models up into the early to mid 2000’s I believe. Kato models are first rate and quite affordable for being manufactured in Japan. Eventually they moved production to China and basically copied the Kato drives. While the detail of the Chinese models is superior the quality of the drives is not. Atlas Chinese models are still more expensive than the Kato Japanese models 

Matt Makens posted:

Atlas rebranded a lot of Kato Japan models up into the early to mid 2000’s I believe. Kato models are first rate and quite affordable for being manufactured in Japan. Eventually they moved production to China and basically copied the Kato drives. While the detail of the Chinese models is superior the quality of the drives is not. Atlas Chinese models are still more expensive than the Kato Japanese models 

For N and HO, Atlas worked with Kato in Japan beginning in 1983 but switched to Chinese production based on Kato designs less than a decade later. It roughly coincided with Atlas’ move from American production of its N scale rolling stock line to Chinese production. I can’t recall the exact year, but it happened while I was working at Hub between 1988 and 1996. I’d say roughly 1992.

Will Ebbert posted:

If the difference in cost to make product in the states vs China is so small, then why are they all made in China. Clearly it's a fairly substantial difference or else nobody would've loved production over there. It's not rocket science. 

Actually it is, it isn't the simplistic idea people have. When production initially moved to China you were dealing with a country with a lot of people to employ and wanted to become a major player in the world economy, and they had a state run economy (which it still very much is, though a hybrid now), they had a government investing in the infrastructure needed to produce  things, rail, roads, airports, container ports, and they had a huge labor force willing to work for very low wages with no benefits (basically the workers kind of lived like day laborers do here in the US, lived in conditions with many people sharing a room, and so forth). And the gap was staggering, you were talking 50c  an hour wages and because of no labor laws, working 6,7 days a week, 15 hours a day, compared to a typical wage in the 20 bucks an hour range, plus benefits...and even with the difference in living standards, that wage rate in China is not middle class or even what we would consider working class. Other things help level the cost difference, but it was enough to make a significant difference  in cost.  The irony was a lot of the companies who went offshore were making money, but being able to slash labor costs that sharply and quickly was a big inducement. There were costs to doing this, quality went out the window in many cases, from what has been published things like the reject rate and doa off the lines is high, and when you have assembly like that your costs downfield go up, too, and that cost made building in China not as cheap as you might think...and this depends on the type of product being made, too, different for a cheap gee gaw and something like an Iphone.  

It is a different story these days, China is trying to move upscale and get away from the low wage manufacturing that put them on the map, they want to make their own products higher up the food chain, and the costs have risen there a lot all across the board (from what I have been told by friends who deal with vendors there, things like electric power were once heavily subsidized, these days is market rate, and the cost of materials to a certain extent was subsidized), plus they are having trouble finding people willing to work the kind of jobs we are talking about, so prices have risen, and significantly. It is still cheaper than the US, but for the really low margin items, Chinese factories have been interestingly enough automating, and they also are building factories in places like Vietnam and Africa to take advantage of low wages there, basically for the really low wage stuff the moving wheel is in action again, the same wheel that moved mill jobs from the northeast to the south in the US when labor rates went up, and then went offshore. 

The real cost is as others have pointed out, to move back to the US they likely would have to start from square one. It would require modern, heavily automated plants relying on things like CNC machines (in China, things done here on a CNC would be done via old fashined jig and manual cutting kind of thing), but more importantly probably recreating a lot of the tooling, which can be impossible to get out of China (one company decided to move its tooling out of China, they owned it, and mysteriously "it was lost in shipping" from an account I heard at a conference I was at), and that is costly. You can see the rise in costs with how much the trains we buy are going up, but given all the factors, especially for small companies like Lionel and Atlas, it still is cost effective for them given all the other factors. Eventually things like 3D printing, if it does what some think it will do, could bring back manufacturing here or other more efficient technologies, you could have contract manufacturers  here  building things for small companies, though likely wouldn't not involve a lot of jobs either. 

The real question (to me) is technology is taking jobs faster than outsourcing is, and no one has an answer to that one.....

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