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Having worked in heavy manufacturing for 45 years, the largest percentage of product cost is labor, both direct, (factory operators) and indirect ,(0ffice, engineering, sales, management). Since the Lionel plant was built in 1920 or so it would seem all the equipment was fully amortized and depreciated by then along with the building. Overhead (utilities, non-production supplies, insurance, etc.)  Is a small percentage of overall costs.

As an aside, in the late 50's and early 60's I lived within a long walk to the Hillside factory.

Last edited by CSXJOE

-I also worked in heavy industry for almost 40 years.  Although it's true that labor costs are typically at least 50% of total operating costs, I think it's incorrect to assume that Lionel's equipment/overhead costs for a facility that was 20+ years old were insignificant.   During WWII, they converted from manufacturing toy trains to making products to support the war effort.   After the war, they completely changed their product line from tinplate to postwar.  I'm sure that this required substantial re-tooling, capital, and depreciation costs.

-I have no idea who Frank Pettits is, and nobody is saying that $120K/year (in today's dollars) is peanuts, but for an executive salary in the NY/NJ area, his salary doesn't seem at all exorbitant (as a matter of fact, it seems a little low).    If Mr. Petitts  (whoever he was) had an impact on Lionel's postwar success, then he deserved every penny.  Also, I don't think that Joshua Cohen was ever accused of overpaying his employees.  

-During covid, I got back into the hobby which meant that I took a bunch of stuff out of boxes that had been sitting in an attic for 55+ years.  It all still worked.   Lionel was never a low cost supplier, but there's a lot to be said for building something that will run for decades.  Producing products that will last for generations isn't cheap.

Really surprising that some O-gauge folks haven't heard of him - he was one of the inventive geniuses at Lionel and had a huge impact on our hobby.  I was surprised that searching on his name didn't turn up more info (there's no Wikipedia entry), but here are a couple of links:

https://www.poconorecord.com/s...h-ideas/51090002007/

https://www.goodreads.com/book...it-comes-from-within

Another observation regarding his compensation... Remember that in his time, his wife probably didn't have paid employment, so his earnings entirely supported the family; while a family can live on $120k today, they certainly aren't rich.

In today's money for an engineer that isn't all that much (obviously depends on where you work and what kind of tech field you are in). 120k for an experienced engineer would be low in a lot of tech spaces these days, kids coming out of college with an engineering degree is getting close to 100k in major markets (depends on the type of engineering and location). And in todays world that isn't an executive salary, guarantee you that, far from it. Petit also wasn't a routine employee, he developed a lot of the accessories and I would assume was also involved with the trains themselves, he wasn't a staff engineer. Back then a staff engineer would prob make like 80 a week roughly in the NY area.

Frank Pettit deserved every penny he earned, and then some. His creative mind sure provided many thousands of us with a whole lot of fun.

Agree totally. Not to mention that the way he designed things was a clever use of materials that were relatively inexpensive to implement, his designs probably increased Lionel's margins on each product quite a bit by clever use/re-use of technology across the product family.

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