I was surprised to see this old thread up on top of the discussion. Remember, Dick Maddox said at the time (smokescreen or not) that Lionel needed to move overseas in order to compete. Of course, what he meant was to develop new products, which Lionel did almost immediately.
It's important to remember that Lionel was subcontracting and outsourcing for parts and components long before the official move overseas. When I bought a Lionel set in 1992, the box said "Made in the USA" but inside the locomotive casting were the words "Made in Maccau." By 1996, Lionel had admitted in their catalog that all starter sets and many other similar items were being made overseas. Top end items would continue to be made in the US.
It is a challenge for all the companies when the factory is no longer across the parking lot, but across the Pacific. Differering companies have differing success levels with quality: Williams does better for example, but they stick with what is tried and true as far as products and features. And many dislike Williams for their lack of detail and features.
The adult consumers who want the higher detailed trains have spoken and unintentionally won. It isn't finacially for the train companies to put the millions into new products without doing it overseas. US production costs would be double if not tripled on many of these new items. If a new top end steam engine costs a million dollars to bring to market in China, well how much more would that have to retail for to do the work in the USA? MTH spent millions to develop DCS. How much more would it have cost if the work had been done totally in the USA?
I'm perfectly content with lower end products and comproses such as reusing truck sides from one loco model to another, regardless of prototype. This IS the way Lionel too, operated for years. Today it won't due with many modelers. Remember the brew-ha-ha on the OGR forum over the K-Line KCC SD90MAC fuel tank... it wasn't prototypical and many over on the OGR forum let their disdain be known for this. Gee, the engine was budget priced cheaper than many other non-scale lower end locos, and still it wasn't good enough. For $125 I wouldn't have griped about the fuel tank, but many did.
As far as quality, I'm not convinced that American quality (at least non-postwar) was that much better than what is being done now. The newest Lionel starter cars are far nicer than the ones being done in the US. What annoys me here is the price is doubled now, when Lionel's actual cost is SUBSTANTIALLY less for these cars.
The high end eletronics can potentially suffer as much from the long journey from China to the US as much as from manufacturing/assembly oversights. Lets see: loaded into a container, trucked in China to the shipping port, loaded on a freighter, the smooth non-temperature controlled journey across the Pacific, to be unloaded again, placed on a truck again to go to the distributor, where the container is unpacked and contents unloaded, only to be loaded on a truck again to go to retail outlets. Not including another smooth shipping trip if items are purchased mailorder as many are. It's no wonder to me that products arrive to the consumer with loose wires, loose screws, broken components, etc.
I've been to department stores and seen piles of opened returns on consumer electronics. Of course, these items are made in the millions and replacements are easily available. The consumer doesn't expect repairs, but a replacement. The retailer doesn't repair it... they ship it back where repairs are made in bulk and those items are sold again as re-packs. There are certainly liabilities with so much shipping and handling of products.
Had train consumers been more content with fewer new scale train items, and more extended runs of those items (as in the past), compromises in details and accuracy (as in the past) then maybe the train companies could still be in the US. But we know even from this more toy-train friendly forum, that wasn't going to fly with many folks. So many of you got the high end detailed trains you wanted, but they by necessity say made overseas on them.
Another example... I was totally content with the older K-Line products which were made in the US until 1991. When K-Line went overseas, they started building up the capital to make new tooling investments they probably couldn't have otherwise done. How many of you guys think the K-Line Alco non-scale S-2 was one of the best train locos ever made? I do. I prefer it over many others.
Tooling and engineering costs are a BIG factor in this hobby. A million dollars to develop a new scale steam engine that has very limited sales potential (and a limited production run due to the absolute prototypical insistance of many modelers) is a big chunk of change. MTH put out as many new products in ten years as Lionel had done in decades because MTH was doing everything overseas, and I don't hear too many MTH fans complaining they wish the stuff was made in the USA. They do complain they want more and more new prototypically accurate items.
I'd be happy with American made. But I'm happy without the electronics, without command features and happy with extended profitable production runs of prototpically inaccurate (or compromised products). Until more modelers agree with me, I think Chinese production is here to stay for the foreseeable future.