Where is the Tooling and who will make New Products from it?

[dlagrua]

In the years that many of us have been in the hobby, we have seen quite a few companies exit the model train business. They include Right of Way Industries, K-Line, KMT, Weaver, and most recently MTH. At this point there has to be tons of tooling scattered about China and Korea. My question is; does anyone believe that any model train company will locate it, and try to make new products on it?

[Flintlock76]

There's supposed to be a saying in the toy train industry:

"Tooling is forever."  Meaning of course that once it's built someone always ends up with it.

The question now is considering all the tooling that's migrated to China that belonged to the companies you mentioned, now what? Once the Chinese have their hands on imported tooling they never let it go, so the only option is to do business with the Chinese or make your own tooling if you want to pick up where the others left off. 

It's anyone's guess what going to happen, especially with the MTH tooling.  Considering current events how many want to do business with the Chinese? 

Do I think any model train company will try?  Not at the moment.  I wouldn't.  But who knows what the future holds? 

[ATLANTIC CENTRAL]

No question that good tooling is valuable and tends to live on a long time in this industry.

But, the cost of creating tooling has droped tremendiously in the last 20 years, so making new tooling is not the big deal it once was.

I worked in the retail side of this business many years ago, I can tell you all sorts of stories about hobby products, not just trains, that have been owned by and sold under a half dozen names in as many decades. And it is still going on.

I'm an HO guy, and I don't own any MTH products, so I will not miss them one bit.

The reasons I don't own any MTH products are many, but the primary reason is most are not really that good in terms of being "scale models" in my opinion. Not to mention high prices, crappy control system not fully compatable with the two established HO control systems, and a selection of products that generally don't fit my layout theme.

In HO & N, Athearn, Walthers, Rapido, Atlas, and others seem to have no problem controlling the ownership/location of their tooling in China. Recently (a few years ago) many of these companies had to find new factories, yet those same products are now rolling onto our shores and clearly appear to have poped out of the same dies......

The one company that has been known to have some problems is owned by a guy who came from LIONEL, Broadway Limited Imports. They have items in their line that have been made in three different countries, multiple factories, and partly retooled every time.

Maybe O gauge people think different and do business different?

Sheldon 

[emdmike]

Well, Kline's tooling went to Lionel I do believe.  As to where the MTH tooling ends up, your guess is as good as mine.  But it will remain in the PRC, once tooling ends up there, it never leaves.  Time will tell where MTH's stuff ends up if no one buyer is found.    Mikie

[dlagrua]

emdmike

Well, K-line's tooling went to Lionel I do believe.  As to where the MTH tooling ends up, your guess is as good as mine.  But it will remain in the PRC, once tooling ends up there, it never leaves.  Time will tell where MTH's stuff ends up if no one buyer is found.    Mikie

All of K-Lines tooling did end up with a Chinese sub-contractor that Lionel could use BUT a lot of that product also showed up as a new brand called "O-Line" and reboxed as such. I believe that RMT buys product made on this tooling. Such is life for the "agreement" that Lionel purchased it but we all know once tooling is made in China, it stays in China. As for MTH and the other brands; my guess is that Menard's may start importing product from the same sub-contractor that has old MTH tooling and expanding their line once this Covid event passes. The Chinese have been given and now own the model train market.

[emdmike]

Well said, they have been given the model train market, lock, stock and barrel.  But its also this that those of use with prewar Lionel OO wish could work in our favor.  Since the Chinese love to clone everything.  Us OO gaugers wish they would clone the Lionel 3 rail track and switches(and 2 rail)so we could build layouts without needing a millionares wallet.  Just use modern plastic instead of Bakelite for the roadbed!   Mike 

[pennytrains]

Take a close look at Menard's cabooses.  They're Marx.

[Flintlock76]

pennytrains

Take a close look at Menard's cabooses.  They're Marx.

 

Makes sense if those cabooses are coming out of China, they are Marxists after all.   

[smokey1]

emdmike

Well, Kline's tooling went to Lionel I do believe.  As to where the MTH tooling ends up, your guess is as good as mine.  But it will remain in the PRC, once tooling ends up there, it never leaves.  Time will tell where MTH's stuff ends up if no one buyer is found.    Mikie 

Actually, it went to Kal-Kan the manufacture of K-Line and Lionel at the time. As they actually obtain all rights to it with Lionel have the option to use it for a year and the option to continue to lease it after that but Lionel decided not to. So that's how it ended up in O-Line using it.

[ADCX Rob]

pennytrains

Take a close look at Menard's cabooses.  They're Marx.

Marx/K-Line clones... the boxcars are AMT/KMT/Kris/Williams clones, all from new tooling.

[brianel027]

There's a lot of skewed information here that warrants correction, along with some of my thoughts, which are based upon what I read about production in China, from the people who are directly involved.

• The name of the facility is not Kal-Kan. It's Sanda Kan, who at one time produced nearly all the model trains being manufactured in the world. Sanda Kan ended up having money problems, certainly not helped by the $3.8 million debt K-Line left them with, so Sanda Kan was purchased by Kader Industries, the parent company of Bachmann.
• K-Line's tooling did not go to Lionel. It remained with Sanda Kan, who struck a deal with Lionel to market and distribute K-Line products under the Lionel banner, no doubt to help recover some of the debt they were left with. Some K-Line product tooling, like the A5 steamer is now owned by Lionel. But the vast majority of K-Line tooling we can assume is still with Kader. Willliams by Bachmann (also owned by Kader) has brought out a select few of those trains.
• While tooling may be less costly than it once was, it is still expensive in terms of the model train market. One of the HO companies has said it costs a quarter of a million dollars in R&D and tooling, to bring a new locomotive to market. And they can expect to sell several thousand in an initital production run, not several hundred like Lionel or MTH. And if tooling was so cheap, why wasn't MTH doing more new tooling like Lionel, save for the scale 44 ton switcher? Seven or eight years ago, Mike Wolf said that they were in debt. I suspect that situation didn't improve much. Lionel has the benefit of making most their profits on the traditional line of starter sets, of which MTH never had anything close to the same market share.
• On the topic of the future of MTH products and someone else making them: Mike Wolf has siad that his tooling was high quality and made for extended production runs. But most it is now decades old and may require refurbishing. This would be an additional cost for any company that would consider purchasing MTH tooling, provided it is even for sale to that company. Truth is, no knows on this scenario yet. But Mike Wolf also said it was the Railking line that was his money maker. So why would any company want to buy the least profitable part of MTH: Just the Premiere line of tooling? I've read comments along this line, which shows some modelers don't have a real understanding of the industry itself.
• Lionel openly advertises high end products as "Built To Order." Truth is, everyone is operating on that principle including the HO companies, and have been doing it for years. Not one train company was to take a hit on having unsold inventory, and then having to lose money on it by reducing the cost in order to move it out to consumers. Even the HO companies have talked about this, most notably Jason Shron.
• After Kader took over Sanda Kan, many of their client trains companies were droppped from production around 2010. Lionel was one of the few companies not dropped. Aristo Craft was also kept on board. At that time, RMT was affiliated with Aristo Craft so they weren't dropped either.
• O-Line Reproductions was not a train company that had trains produced for them using the K-Line tooling. It was instead, just a product line name invented by Heartland Hobby, a train distributor. I strongly suspect it was situation where RMT couldn't pay Sanda Kan for products produced, so not wanting to lose money, somehow an arrangement was reached where Heartland would purchase and distrbute the unpaid for RMT inventory. It's worth noting that after the K-Line debacle, the rules changed and train products being produced in China have to be paid for in full before they ship to the mainland US. Even at the end of K-Line's existance as a company, they were unable to receive more products from China without having them paid for in advance and in full. I suspect this is why some of the last products cataloged by K-Line are harder now to find, as the production runs were smaller, so they could be paid for.
• From what I've read, the HO companies are not immune to problems with tooling being overseas in China. The general rule is tooling made in China, stays in China. It is not an easy process attempting to relocate tooling from China, and that is almost exclusively tooling that was originally made elsewhere and then taken to China. Notice that outiside of the former Weaver based cars, all of the current USA produced Lionel trains are ALL traditional based train cars that were all once made in the US. I was quite surprised to see the recent scale Lionel autorack cars were made in Vietnam. But my guess is that it is easier to move tooling from China to Vietnam than back to the US.
• As for Menards, I seriously doubt they themselves have invested any money in tooling. But that's just my opinion. I think they are using pre-existing tooling. Yes, in some of their ads, they do say new tooling, but that can be a little misleading. It may be new tooling for Menards, but still from existing molds. The Menards caboose is a clone of the more modern MPC style SP caboose. And the deep well car sold by Menards was reportedly from the Right of Way tooling. So it was "new" for Menards, but hardly from newly made tooling paid for by Menards. I doubt Menards could be retailing trains as low cost as they are, if they were putting hundreds of thousands of dollars into new tooling.
• Menards trains are reportedly being made by a company called Golden Wheel, which is a company noted for their production of die cast vehilcles. As far as model trains, there could also be duplicate tooling that Menards has gotten access to. Or maybe more accurately, the company that is making the trains for Menards. Case in point on the possibilty of duplicate tooling, look at the K-Line S-2 switcher. At some point, K-Line altered the sides of that model, so that the channels between the doors on the engine hood, were not nearly as deep, making painting and decoration much easier. You can clearly see this by looking over photos of all the various S-2's made by K-Line. BUT then when RMT introduced their version as the S-4, the channels between the hood doors were deep like the early original K-Line S-2. So that tells me that instead of making modifications to the original tooling, K-Line had another set made, and this is what was used as the basis for the RMT Bang. Also consider that instead of making new tooling for the BEEF F-3 and the shorty passenger cars, RMT used the original scale K-Line tooling for the F-3 and passenger cars, took those molded shells and then physically cut down and glued the pieces to make their shorter versions. Consider all the acutal labor into that process, and that was mostly likely more cost effective than investing money into totally new tooling. So new tooling is NOT cheap.
• There's not a public library of tooling in China. Just because the tooling might still exist, doesn't mean any company can gain access to it. Some have speculated about Menards reissuing some of the former K-Line trains, but the truth is Menards may not be able to gain access to that tooling.
• Furthermore, I wonder if the overall model train market can support a new company making trains... at least the 3-rail market. Look at all the companies that have folded for one reason or another in the last 20 years. They may announce it as a "retirement" but lack of sales could make that decision much easier to reach. People have moaned about Lionel now having no competition. But the truth is the other way around, at least in the market place. Lionel was no doubt inspired to improve by MTH, but in the market place, MTH was competing with Lionel, not the other way around. Or conisder Williams by Bachmann: Products introduced 4 or 5  years are still available from retailers. Unfortunately, this sends a negative signal to the importer, who needs to clear out inventory. Even Rapido owner Jason Shron checks out eBay before he decides to re-run a product. If he sees lots of them still available at reduced prices, that tells him it's not a good time yet to re-run that product.
• And before anyone jumps on the anti-China bandwagon, remember MTH was NEVER in the US. Their tooling was always overseas from the beginning. K-Line moved their tooling to China around 1990. And yet for some reason, Lionel takes most of the criticism for going to China. When Neil Young was part owner of Lionel, he said Lionel had 2 choices: To go out of business or go overseas, because at that time MTH was killing them in the market because they were doing lots of new tooling. Lionel didn't go to China to lower retail costs. They went so they could invest more profits into new expensive product tooling.

 

[ADCX Rob]

brianel027

• As for Menards, I seriously doubt they themselves have invested any money in tooling. But that's just my opinion. I think they are using pre-existing tooling.
  
• Menards trains are reportedly being made by a company called Golden Wheel...

For Menard's Williams/WBB clones(boxcars case in point), your theory is that Golden wheel has access to Bachmann tooling. That isn't likely at all. It's Golden Wheel's tooling, no investment by Menard's. Menard's doesn't have any interest in tooling, the contracts certainly are for finished goods, they don't care how the manufacturer accomplishes it.

[dlagrua]

There is some good info in this thread but the fact remains that there is now more model train tooling in China, than companies willing to buy products made from it If a company has money to spend you'll see how fast the tooling over there gets used no matter who "owns" it. The Chinese work like that. Over there money talks, nobody walks.

[ATLANTIC CENTRAL]

dlagrua

There is some good info in this thread but the fact remains that there is now more model train tooling in China, than companies willing to buy products made from it If a company has money to spend you'll see how fast the tooling over there gets used no matter who "owns" it. The Chinese work like that. Over there money talks, nobody walks.

 

Not arguing any of the points that have been made by anyone in this thread. But it sure seems like there have been more "questionable" situations with O gauge and large scale companies/tooling than with HO or N scale products.

Some HO companies are still doing their injection molding here and sending parts to China for assembly.

Atlas has been making stuff in China for a long time, but no HO scale knock off of Atlas Custom Line track has "turned up"?

There were "knockoffs" of Athearn freight cars by the Chinese 35 years ago when the tooling was still here, yet there does not seem to be a problem today?

The tooling for the original Revell HO scale buidings has been owned by a half dozen companies and been produced in nearly that many countries, and sold under a long list of brands, but I don't think in 65 years anyone ever used that tooling illegally.

Here is what I think, from what I have heard.

Companies in O gauge or large scale, like LIONEL, K-Line, MTH, Aristo, or even BLI in HO, made deals with the suppliers in China to share the cost of tooling, and these deals have bit them in the butt.

35 years ago LifeLike paid Brawa to reverse engineer the Athearn drive and tool up the Proto2000 line of HO engines. Then that tooling went to China where LifeLike already had strong supplier relationships and they made locos without any problems until they sold out to Walthers.

Walthers still has that line made over there with no problems of tooling ownership, despite factories closing, new ones opening, the giant Kader who owns Bachmann also doing work for many other lines, buying up much of the production capacity. 

Yet the HO market seems free of all these fears or realities of "tooling theft".

Four or five companies make HO BigBoys, they are all clearly separate tooling, dumb as that seems.....

I think if you have the money to really pay for your own tooling, even the Chinese have enough integrity to respect that. But if you ask them to go in half, they figure they can do what they want if you are not making them enough money.

Athearn, Atlas, Bachmann, Walthers, and likely even Bowser and Rapido, and LifeLike before them, seem to have enough money - none of them have ever filed for bankruptcy...

I worked in this business years ago, I sold trains of all scales and gauges, but O gauge has always seemed like a different kind of buyer, a different kind of product, and a different kind of mindset in the companies supplying the products.

Yes the HO companies have largely gone to "preorder" or "build to order" as someone called it in this thread. BUT, Walthers, Athearn, Bowser, Intermountain and others still build a reasonable percentage of product beyond that short term "pre requested" demand (nobody makes you pay in advance, you can always cancel).  

And Bachmann still just builds trains FIRST and then sells them. Well OK, they own the factories........

Here is the thing, I'm a scale modeler, not a collector. I don't care what is made "this year", I just want to buy things that apply to my modeling when I need, want and can afford them.

So to me, the "limited production", get it now thing, sucks big time.

So if you go out of business, or can't pay your way, then sure, maybe your tooling is up for grabs in China.

I could be wrong, but I think Mike Wolf decided to retire while he could because his misadventure into HO was a flop of epic proportion, and the O gauge market had cooled off some time ago from the dealers I talk to.

I 'm sure somebody buys MTH HO, but I swear to you, I have been in this hobby here in the Baltimore region all my life, and I know a lot of HO modelers, and I have not seen enough MTH HO on their layouts to fill a shopping cart, let alone a warehouse.....

I know I'm on the Classic Toy Trains forum, but maybe the Classic Toy Train manufacturers have brought this problem on themselves, and the Model Train companies have not......

But what do I know, I've just been in this hobby and around this industry for about 50 years now...... 

Sheldon

[brianel027]

ADCX Rob

brianel027

• As for Menards, I seriously doubt they themselves have invested any money in tooling. But that's just my opinion. I think they are using pre-existing tooling.
• Menards trains are reportedly being made by a company called Golden Wheel...

 

 

 

For Menard's Williams/WBB clones(boxcars case in point), your theory is that Golden wheel has access to Bachmann tooling. That isn't likely at all. It's Golden Wheel's tooling, no investment by Menard's. Menard's doesn't have any interest in tooling, the contracts certainly are for finished goods, they don't care how the manufacturer accomplishes it.

 

 

No Rob, I agree with you. I re-read what I wrote. No, it's not my theory that they have access to the Bachmann tooling. WBB has responded they have nothing to do with the Menards boxcar. It is most likely something akin to the scenario you wrote. Whether folks like it or not, the property rules in China are different.

[dlagrua]

ADCX Rob

 

 

brianel027

• As for Menards, I seriously doubt they themselves have invested any money in tooling. But that's just my opinion. I think they are using pre-existing tooling.
• Menards trains are reportedly being made by a company called Golden Wheel...

 

 For Menard's Williams/WBB clones(boxcars case in point), your theory is that Golden wheel has access to Bachmann tooling. That isn't likely at all. It's Golden Wheel's tooling, no investment by Menard's. Menard's doesn't have any interest in tooling, the contracts certainly are for finished goods, they don't care how the manufacturer accomplishes it.

I don't believe that anyone has mentioned where the KMT/Kris tooling ended up . The Menards boxcars look very similar to the KMT cars that I own that fall midway between O gauge and O scale. Golden Wheel may have acquired those molds and/or some Right of Way tooling as well.