NEWS FLASH! Lionel gives money to Gargraves, Ross, Atlas, MTH, and K-Line!!

[Anonymous]

That's right. These other companies exist because of Lionel's decidedly stupid business practice to not make every conceivable piece of track.

Do I sound harse? Gee. I hope so. I can't understand why they would let other companies fill a void that they could so easily tap.

If someone can explain this reluctance to fill a need and make even more money than they already do, I'd like to hear from you. To me, it's like Ford building a car in which only Chevy has the parts! [soapbox]

[spankybird]

I believe this is another example of Lionel sitting back and trying to live on its name only and not a better product or at a more competitive price.

Is this not what they did from the 60 thru the 90’s

tom

[Anonymous]

If LIONEL made everything train......

It is called a monopoly (and not the game); LNL would be hit with a charge of monopolizing from the Anti-Trust Division of the Justice Department.

I have often wondered why LNL hasn't been hit already. They control a huge share of the market. They can affect market prices. If they also made everything (think Microsoft) they could be charged with unfair competition and predatory trade practices that lead to monopolizing and that violates both the Sherman Anti-Trust and Clayton Anti-Trust laws. (triple damages plus attorneys fees to the competition as well as being prohibited from being in the market.)

That is why they wisely don’t delve into ALL elements of the train markets.

Alan

[brianel027]

Well so far, I agree with the sentiment expressed by Spankybird. I do think it would be nearly impossible for one single company to do absolutely everything. One small beauty of American capitalism is that other companies have the chance to answer the call or step up to the challenge of making either a better quality product or a better priced similar product.

Stop and think about this. The only things than Lionel has really taken the lead on is sound and control. I think that's it. On other issues, such as product selection or quality control or price point, it has taken the presence of other companies that have gained success and a foothold in the market to wake "the Lion" out of a deep sleep.

Correct me if I'm wrong, but I believe Gargraves track came first before Lionel Super 'O' track. Even during the so-called glory days, even the original Marx company was able to compete with Lionel with simple, well engineered, affordable entry level product. Years later, this is where K-Line got it's start... by making 027 track and then later with quality priced entry level trains. Compare K-Line starter sets to Lionel's during the early 1990's... K-Line's the winner. I think it was K-Line's presence in the market that caused Lionel to make the needed improvements to their starter sets.

How about Industrial Rail? Again, a company that made well engineered, above par quality rolling stock at prices Lionel could hardly match. And as a dealer you didn't have to sign your life away to be able to sell Industrial Rail product, not to mention an attractive wholesale price that blew Lionel product out of the picture.

Look at MTH and Railking. I don't doubt there was a element of revenge that prompted Mike to go out on his own. But no one today can ignore the contribution MTH has made to the industry. How many engines has Mike made that no one else has touched? Whether you like Mike Wolf or not, I don't think we'd be seeing some of what we are seeing in the hobby today if it were not for MTH.

Atlas, Weaver, Ross, Sunset (3rd Rail), Williams, American Models, S-Helper have all gained footholds into the market and established customers because they were doing things Lionel was not doing.

In many cases, these other companies have prospered by making product Lionel was not making. In other cases, it was simply a matter of making similar product at a quality level that Lionel had forgotten about, and at a price point Lionel wanted to ignore. Even some of the comments coming out of Lionel show me that Lionel is far far too concerned with 'collectibility" and after-market value rather than making affordable, quality trains.

Yes today, now that there are so many other established competitors, Lionel is putting attention into quality. But I think even the move towards quality is more due to the fact that Lionel product is now made in China where the production costs are substantially less. Since they are saving so much money, they can now afford to put a little more emphasis on quality. In my mind, there is still no excuse for some of the ridiculous suggested list prices on much Lionel product. $60 for a flatcar with a tractor on it is highway robbery. Even the so-called blowout price of $40 for the same car is still out of line.

Spanky is right. Lionel is still living off it's name. Sure, the Lionel name will always have a fond place in all of our hearts. And it is truly the name that stands for 3-rail trains. But when folks see my train layout and see my K-Line trains, they don't know... to them they're still Lionel's. Which is fine with me, because I didn't have to pay Lionel's outlandish prices to get trains which still have the magic of Lionel in them.

If I were at Lionel, I'd be truly embarrassed and ashamed that a company named Williams was making near-exact replicas of our product - with much better quality at a much more reasonable price. If anyone at Lionel is scratching their head wondering why more of us aren't buying Lionel product, all they need do is look in the mirror. For we can now all buy Lionel product without the Lionel name on the box, and get a better made product for much less money. The one thing I think Lionel today is doing right, is that they are offering the best selection of starter sets at the most varied range of prices (and of course quality points).

Oh, a final example... the R-M-T Beep! Seems to be doing real well. And when there was a problem with coupler swing on 027 track, R-M-T actually fixed the problem. I don't have one yet, but I know those that do have them, like them. Again, the quality level and price point of the Beep are at a place Lionel either can't match or even more sadly, just refuses to match.

[FJ and G]

Lionel is in the process of regaining some of the "carpet" track that MTH for so long enjoyed a monopoly on with its plastic roadbed.

However in 2 other areas it has failed MISERABLY.

1. For traditional toy train purists who love tubular track, they have not really put much effort into giving a greater selection or making technical improvements to existing turnouts.

2. For scale lovers, they have not even tried to compete with Gargraves; thusly, Atlas emerged to fill the void.

3. Super O was a great track and they dropped it

Trainwise, I find the prices of Lionel to be somewhat higher than K-Line and MTH on nearly all offerings.

On the plus side, they continue to make outstanding accessories and quality trains.

dav

[FJ and G]

Actually, "parasites" in every industry spring up.

For example, it is 3 times cheaper for me to purchase a jeep top from a company other than jeep and the quality is as good or better

For computers, I'm sure you have software that makes other software run better; put out by a different company. In graphic design, there are a number of such companies.

For trains, there is TAS, which specializes in parasitic activities and do them quite well

[Anonymous]

Amtrak Jack---Your analogy about cars unfortunately doesn't hold up. When I was in sales of trucks thirty years ago I sold Chevy Blazers. If it had an automatic transmission it had a Chrysler part that required (probably still does) royalties. The axles were made by Dana Corp, another Chrysler subsidiary, windshield wipers came from Trico, tires from Firestone etc. By licensing out equipment Lionel effectively keeps some control of their competitors. If Lionel put everybody else out of business how would we get the trains that Lionel doesn't make? I know that I wouldn't be satisfied with just Lionel trains. Lionel couldn't possibly make everything currently available. Mr. Maddox said that Lionel preferred to compete by making the best trains and making the best guesses as to what might sell best. I don't think you have thought this completely through. Odd-d

[spankybird]

I can give you a couple of other comparisons. It is true that Lionel first came out with command system (TMCC). When I re-entered the hobby in 1997, I wanted an engine with sound. I looked at Lionel first, but the only engines with sound was TMCC and at that time TMCC could not run conventional engines at the same time. MTH had PS1, which was sound with conventional controls. I could run my post war Lionel and PS1 engines at the same time. It took Lionel 4 years to provide a sound system without TMCC.

I also bought some passenger cars from K-line, which had detail interiors back in 1997, MTH also had passenger cars with detail interiors. How long did it take Lionel to do one.

Look what has happened from 1996 to 2001 and you can see that Lionel has been playing catch up and they still can’t or won’t match the price of others.

I also fell that the controls of DCS is above that of TMCC. Once again Lionel is faced with catching up.


tom

[ChiefEagles]

Now Spankybird is right about this. I have now been driven to look at other lines of trains and track. Not saying this is bad [in fact it has turned out good]. I use to think that there was only Lionel and Lionel only. Then as I'm preparing to build a new layout, I can not find all of the track and switches I want. "Some of this and some of that." "We're coming out with this in the future." FASTTRACK??? Why did they not have a full line of track and switches when they introduced it? Well, now I see quality trains at cheaper prices from other manufacters. Same with tracka nd switches. Some I do believe are even better than Lionel. So what has this done? I look only to Lionel products when I have to.

[3railguy]

When Lionel first introduced Fastrack, they introduced as a track system for starters sets. They were also leary of competing with track systems that are already out there such as MTH Realtrax, Atlas O, Gargraves, etc....

The response from many was "Oh no, not another track system!" Many dealers were not interested in carrying another line of track because it was too much to stock. For customers who already have a layout, a new track system is for the most part, nil. Not many people want to add on or expand their layouts with a different style of track.

These track systems take time to evolve. Getting people to adapt to these systems, or build a new layout takes time. These companies need their support to make the variety evolve. It took a few years for MTH's and Atlas's variety to grow because of this.

[ChiefEagles]

I think this needs more discussion. So, I'm moving it back up to the top. [;)]

[Anonymous]

All I am trying to say is that Lionel needs to make all different types of track pieces, that's all. Not saying they need to take over the industry. Don;t like my first car example, how about this one: YOu can only drive your Ford on FORD roads. If you want to turn only SLIGHTLY left, you have to buy the roadway made by ABC company.


[:-^]

[spankybird]

Good Morning All,



Maybe Jack, its just that Lionel is afraid to start a new produce line. Instead of
investing in new tooling only to have it become a flop, they will let there competition to the development and see if the market place will buy it. If so, then they ru***o catch up.

I work for a company that was considered a world leader in there product line, when in fact they very seldom develop new product, but instead let there competition do it and then they would do reverse engineering on it to make improvement and try to lower the cost of manufacturing it.


tom

[nblum]

Why reinvent the wheel? Lionel probably has spectacular profit margins on its widely used (but antiquated and sharp edged) tubular track, which is used by almost all "toy train" types for nostalgic reasons. They recognized they needed something better for their train sets and have come out with FasTrack, which some feel is the best beginner track now available for floor and rug layouts. It has met with astonishing (to Lionel) success/demand, and thus the line will be rapidly expanded. Since Lionel sets probably outsell the rest of the three rail industry by 4:1, if not more, this track will be the new standard for most beginners and intermediates in the hobby. Lionel probably sells and makes more track in a week or month than Gargraves sells in a year, dollar volume wise. I believe these estimates explain their marketing strategies.

[nblum]

"It took Lionel 4 years to provide a sound system without TMCC."

TMCC's Railsounds (except for coupler sounds, Towercom and Crew Talk) work fine in conventional mode, and have since they arrived in 1994-95. The capability to run both conventional and TMCC locos on the same layout has existed since the beginning of TMCC as well. Indeed the Powermaster was introduced before the Command Base.

From 1994-2002 Lionel was the acknowledged leader in sound features and quality, as well as overall electronics. No other company even offered command control and the quality of other sound systems was distinctly inferior from 1994-2000. Lionel locomotive sound quality and fidelity remains, in most people's opinions, the standard to which other companies aspire (excepting the long complained about chuff number issue).

There is, in my view, even ten years later, no system on the market that equals TMCC for its simplicity, reliability, ease of installation, inexpensive implementation and wide adoption by other manufacturers. There is no sound system with the prototypical variations and sound quality of Railsounds. So how anyone can say Lionel is playing catchup in these areas is beyond me. There wasn't even a reasonably competitive system until DCS was introduced two years ago, and initially it didn't operate TMCC nor some PS1 locos well at all. Lionel could not play catchup during 1994-2002 in electronics if there was effectively no competition until PS2 was introduced in 2000 :). No one was buying PS1 locos or K-Line or Atlas sounds from 1994-2000 for their superior electronics and acoustic beauty. Market penetration by these companies came because of pricing/value, variety, prototypical attention to detail, and other non-technical issues.

[ChiefEagles]

Sounds like a Lionel add to me. I really think DCS is better than TMCC. I will have both but went with DCS first. I have done a lot of product reviewing of both before I made up my mind. I use to think Lionel was IT. Have changed my mine though. I think all have their advantages. Williams for its traditional operations, MTH for modern performance, Lionel with operating accessories and where MTH does not provide that type or road name, K-line somewhere in there [I like their track selections better than any] and others [like Atlas] to fill in the rest of the gaps. My main gripe with Lionel is they make only part of a "thing". Then you wait for the rest to be done. FastTrack is a great example. DO NOT say it was introduced as a carpet track. They wanted to sell it as a layout track. I have emails from Lionel saying so [I contacted them early on in layout planning]. Did they have the switches???? Did they have all conpontents to do a layout???? NO! They said we are going the make them soon and gave me some projected dates. I'm sure in the past, some of the other companies have done the same. I'm just familiar with Lionel in the past 12 months or so [when I started getting back into this].

[nblum]

Sounds like an MTH ad to me. :)

If FasTrack was planned as a comprehensive system from the getgo, like Atlas's track system, why was it only introduced in sets first? I'm sure they had contingency plans, but it clearly is designed for the introductory and intermediate user, not for hirailers or experienced model railroaders.

Not having any switches available initially at release was a bad idea or bad execution to be sure, but how many years did it take Atlas to release their entire range of track? These are small companies with very limited financial resources and a tiny market.

Lionel has a hit on their hands with FasTrack and what I hear is a lot of complaining when they've actually come up with a market leading product in terms of quality and appearance. They may have misjudged the market, but what else is new?

For comparison, MTH diddled around for about six years before getting to work on a command control system, and took eight years to introduce it after TMCC's introduction, thus dropping significant market share and shooting themselves in the foot big time.

None of these companies has a crystal ball or extensive marketing research resources, just a best guess from the CEO and a few key players inside and outside the company. Indeed, Lionel could have caved in from the competition from MTH, Atlas, etc., but in fact has managed to maintain the leadership in the marketplace as it doubled in size and competition increased. Not too shabby, if far from perfect, for a company that is allegedly clueless and always playing catchup in everything (except selling trains :)).

[ChiefEagles]

More like a Williams, MTH, and K-Line add. Get it right.

[nblum]

"More like a Williams, MTH, and K-Line add. Get it right."

Here are the opening lines of your response to my comments:

"Sounds like a Lionel add to me. I really think DCS is better than TMCC. I will have both but went with DCS first. I have done a lot of product reviewing of both before I made up my mind."

I've used both systems moderately extensively, and my preferences are exactly the opposite of yours. If you want to dismiss my comments by calling my opinions an "ad," others may weigh our words differently. My ten years of recent experience in the hobby compares pretty well with your 12 months. My experience with both systems and both sets of products might be more informative in some people's eyes compared with your lack of experience with the TMCC system. Reading about something, however diligent, isn't the same as actually using it and implementing it on a layout.

[spankybird]

Well Neil,

I going to jump back in here. Unless your going to tell me that every train dealer in the Cleveland Area that I talked to, miss guided me. In 1997, TMCC sounds only worked in command mode and the engines only work in command mode. And by the way, how much did one of these Steam engines cost. MTH PS1 was only $400.00.

Also you could not run both Conventional and Command at the same time. That came later.

I am using 1997 as this was the time I re-entered the hobby and was looking for new engines.

If you check any of the review from either OGR or CTT, you will find how poor TMCC engines run at slow speed in conventional mode.

Let not get lost in MTH or Lionel. If we are looking at who the leader is, and are they really leading or following.

AS an example, Smoke units in cabooses. K-line was first and Lionel came out with them last year, 4 years after K-line. MTH still doesn’t have it. Maybe they never will.

Another example: Detail Refers. Atlas was the first to have one, MTH tried with there diecast, but it wasn’t the same, now K-line is coming out with supper detail refer at $20.00 less than Atlas. So is Lionel or MTH going to follow? Key word is follow.

Who is leading.

IF you want to know if DCS is hard to install. How hard is taking the two wires from you track and connecting it to the TIU and then adding two wires from the TIU to the track. All you have to do, is put the TIU between the transformer and the track. NOT hard or complicated.

I really think it is very hard to predict what the buying public is willing to buy in this recession. It is really tuff to put tons of money in new tooling only to have it not sell. Sometimes following is safer.

tom

[nblum]

" Unless your going to tell me that every train dealer in the Cleveland Area that I talked to, miss guided me. In 1997, TMCC sounds only worked in command mode and the engines only work in command mode. "

Well, sorry to appear argumentative, but you are misinformed on this point. All TMCC locos, from 1995 forward work just fine in conventional mode. The sounds, such as whistle, bell, horns, and diesel prime mover or steam loco sounds also operate without a hitch in conventional mode. Problems at low speeds in conventional mode are restricted to certain Odyssey equipped locos which did not arrive on the scene until quite a few years later. None of the initial locos in the mid-1990s had this problem and indeed they were the best performing locos at low speeds that had been produced to that time in three rail. That was precisely my point in contrast to your mistaken information. In the period 1994-2000 Lionel was the clear technology leader in three rail O gauge.

"Also you could not run both Conventional and Command at the same time. That came later. "

I'm sorry but this comment is also completely untrue. I was there, I own the stuff. The Powermaster and Command Base, which allow remote control conventional and command operation,respectively, appeared in 1994 and 1995, several years before any other manufacturer introduced remote control, much less command control. One could and can combine a layout of conventional and command locos (most easily performed on separate loops, just as with DCS) from the start in the mid-1990s.

[3railguy]

LOL.................We've gone from lack of fastrack wars to TMCC verses DCS wars.

[spankybird]

Well Neil,


If what you are saying is true and it most probably is, then Lionel did a horrible job of enlightening their dealers of what their produce can do. As I recall these engines were in the $700.00 to $800.00 range. Hard to pay that much more than an MTH at $400.00

The real point I have been trying to make is that Lionel is not the Leader any more.

I have pointed out several cases where they were not the first ones out with a new or change in a produce. And they are not leading on the price end of things.


tom

[nblum]

Judgements of who is the "leader" are quite subjective. Obviously the industry and hobby are very different now than they were even 5-10 years ago. Many more companies making many more products, vastly different technology for control and sound, etc. No one company can be the leader in all facets of the products in such an environment.

One could easily come to the conclusion that there are many leaders, as has been mentioned. Williams for value and cost control in conventional mode locos, Lionel in sets, brand recognition and total sales, sound technology, wireless tethers, accessories, toy operating features, MTH in variety of locomotives and rolling stock, and electronic train control features, Atlas in prototypical detail, K-Line in value and cost control for command locomotives, accessories and rolling stock, and so on. But the claim that Lionel isn't still innovating and effectively competing and leading in some areas in this new environment clearly doesn't jibe with the facts.

[spankybird]

So Neil,
I have show many fact as to where Lionel has become the follower, show us what facts they are leading in [?].


tom

[garyseven]

Neil
I respect your knowledge of TMCC and Lionel. You are first among few equals in this area.
One quick question: How do you use something "moderately extensively?!?"[:-,][:D]

[nblum]

"One quick question: How do you use something "moderately extensively?!?""

Somewhere between not quite as extensive and very extensive. I used the term because my experience with TMCC is very extensive and with DCS not quite as extensive.

Similar, conceptually, to the difference between almost sarcastic and very sarcastic.

In answer to Tom's question, I think a reasonable case can be made for Lionel being a leader in the hobby/industry in the following areas:

(1) Brand name recognition and, according, to most industry sources, including their leading competitor, total sales in dollars. Volume of sales of sets to novices and children.

(2) Dealer numbers and size and distribution of their service network.

(3) In the last ten years they have developed the first and/or best:
command control electronics (first by eight years), locomotive sound quality (still the best IMO), wireless locomotive tethers (first and only) integral roadbed track (not first by a long shot, but perhaps best), command control electrocouplers (first), speed control system (Odyssey was first, if not best in most people's opinion), solid state control of low speed conventional locos (first and best: the Powermaster). I'm sure I've left off a few bits and pieces, but from a technical innovation standpoint they are clearly one of the leaders if not the leader. Yes, the first new three rail O gauge coupler in several generations introduced recently, with no thumb tack :). My hope and guess is it won't take them another six to eight years to introduce some technical innovations to TMCC and Railsounds :).

(4) In the area of operating accessories and play value, whimsical toy train rolling stock, etc., they really have no serious competition in the industry, although MTH and K-Line have gotten into these areas to some extent.

That having been said, there are areas where they need to improve their stuff, such as better conventional control of TMCC features like eletrocouplers, making TMCC available throughout their locomotive line, including high end sets, support for standards throughout the industry, more value priced stuff beyond the sets, and more reliable smoke units for those who wi***o endanger their health and the health of their children.

In summary, they have been the industry leader in the areas of technical innovation and brand recognition/sales. That's one reason their prices have often been the highest, just like Sony, IBM and similar companies. Not always the best value, but without Lionel there would be no three rail hobby as we know it.

[spankybird]

See Neil,
I am glad that you finally agreed with me (and others) that Lionel is considering themselves as a leader because of name recognition. My first posting on this thread was that Lionel was living on their name.

And yes I agree that they have come out with some great operating accessories. I have many of them myself. The playground sets, the park set, the hobo water tower, the hobo freight depot, etc. K-line is closing in on some of this market in a different way. Do note, that K-line is not coping what Lionel is doing, but coming up with their own accessories. (again Lionel would be coping this if they produce it).

And with out a dugout, with over 100 years in business and leading the market share with sales of approximately $23 million a year, they are ahead of MTH or K-Line. On the other hand, MTH started O gauge in 93 and RailKing in 95, has them in the market place for only 19 years and now has sales of approximately $16 million. I don’t know what K-line is but I believe they started somewhere around 1973. To be very honest, none of them are a World Class Manufacture. In fact with Lionel case, $23 million with 350 employees, is very bad ratio of sales dollars to employees. ( I recall these numbers from when Lionel was closing it Michigan manufacturing.)

And yes agree that the wireless locomotive tethers is a first and is great. This is a real short coming on MTH engines.

I and many other here will disagree with FasTrack is best. There has been many posting on this, check them out. And that is what started this, that MTH started it track in 97, 7 years ago.

Odyssey came out after MTH PS2 which has speed control which runs at 2smph, better that Lionel.

Cost of command control engines has to go to MTH.

Many of the produces that have already been pointed out, shows that Lionel is happier to follow than lead

[garyseven]

Thanks for the clearification, Neil. For you kids keeping score at home, "moderately extensively" should always be used gramatically correctly.

[3railguy]

No single company is the leader in this hobby. Certainly not MTH, not Lionel, or K-Line. They all extrapulate from each other. Heck, Jerry Williams and Richard Kughn taught Mike Wolf how to make and market trains.

Lionel came out with command control before MTH. MTH improved on it. Except the MTH system is more costly and difficult to understand. Some people like the KISS principal and that's just what TMCC delivers.

MTH was the first to come out with carpet track and Lionel followed with their system and improved it. Fastrack is easier to assemble and less prone to bad contact.

Atlas O lead Lionel into their new line of scale cars, MTH followed suit with 36 woodside reefers that are knock offs of Atlas. Atlas annonces Erie Builts and MTH soon announced theirs.

Lionel milk cars were a dissapointment to me. I wanted 50 footers. MTH saved the day by announcing 50 footers.

To me, they are all a great variety of models to choose from that suit just about every budget and desire or lack of desire for technology. No one is really the best. I say this as one who buys Atlas, Lionel, and MTH products. They all give me pleasure along with a little grief now and then.

One who thinks the Lionel name sells their product is thinking inside some sort of purple box. I know this just isn't true.