GOOD BYE K-LINE trains???

[CSXect]

Well I am Planning to make a purchase from RMT soon and will get four moterized units (Beef A&B Beep and a buddy)a set of peeps and a caboose for a little over $300 total Try to get a decent loco from the other guys for under $200

[cpsteamer]

Neil & Brian - Unlike some other forums contents it's a pleasure to read an intelligent well worded discussion such as yours. Just my 2 cents

[brianel027]

Neil, you do make some very good points. MTH certainly made a valuable contribution to the hobby, and their diversity of qulaity products certainly commanded attention and sales. Certainly if K-Line had stuck with their lower end products only, they wouldn't have seen the growth they otherwise did. There's little arguement that it was the vast amount of new products, combined with the expense of tooling that hurt K-Line. That and aiming the products at a segment of the market that already had more than enough choices. The talk of one company shutting their doors has been going on long before K-Line launched their all out effort in the scale direction. Nick Ladd made the comment that it was possible that one major player would not make it... little at that time did any know it would be the company he was speaking for.

But it certainly did K-Line no good to double or triple their prior total sales, by accumulating such a massive debt with their Chinese vendor. K-Line's earlier slower pace of new scale product introduction was less ambitious, but was certainly less risky. Especially given that by the time K-Line made their change in direction, MTH was already well established with a mountain of available tooling and Lionel was catching up with new product introductions.

RMT and Williams do have minimal staffs (as do other small train companies) but so long as they provide value, quality and service with an attractive price, then it doesn't matter. Williams may do smaller runs, but they do them more frequently and in a far far greater variety of road names. Same is true for RMT. And I'm sure the selection of roads has great appeal for many buyers.

It'd be wonderful if a company like RMT could offer new products from new tooling. But they probably wouldn't be at the current attractive price. Remember when the BEEP was introduced... there was quite a bit of commentary (esp. of the other forums) that it wasn't prototypical. There's certainly no shortage of prototypical items, but they're 6-10 times (and more) the price. Most folks that buy the BEEP and the other RMT products are buying foir the price first, the quality and then the road name selection. Same could be said for Williams Trains also. With all the initial negativity on the BEEP, the success it has had says to me that the non-vocal market that doesn't pipe in on the forums everyday or head off to YORK has found a product they can afford that is worth the price... prototypical or not. I truly believe most folks do not care about rivet counts and precise prototype as these forums would have you believe.

Even though we are in an uncertain economy, with rising fuel costs (and everything depending on that), people continue to spend, just more selectively. I think train guys will continue to buy trains, but will look for either blowouts, bargains or buy more affordably. This bodes well for the more affordable products made by Williams and RMT. And for that matter, the few from Lionel too.

I'm not so sure adults in general want something more sophisticated than K-Line's S2 or an RMT Beep. Certainly some do, but I know a lot of modelers/operators who run postwar and MPC and don't use digital command. The lesser expenisve products have appeal for these buyers.

One thing for certain: MTH, Lionel, Atlas 0, Weaver, 3rd Rail, Sunset Models and K-Line were all chasing the same exact high end dollars. With the minimal market growth along with the product saturation, something was bound to give. The lower end has been ignored for the better part of the past decade. Lionel needed the continual and predictable price hikes on the other non-scale products so they could invest in new scale tooling. Williams served those traditional buyers well and RMT saw a potential for success (and I wish Walter well), and now one of the premiere scale prototypical model producers is now also entering the ignored 027 market: Atlas 0.

I won't say that scale is better or worse than non-scale tradtional. But I will say in this limited growth market, it's probably advisable to be lean and mean, be as diverse with products as possible and give a lot of careful thought to new tooling before spending those BIG dollars that these days are not immediately made back.

[nblum]

You may be right, but you may also be wrong.  The tremendous growth in the number of O gauge three rail hobbiests occurred with MTH's introduction of value priced scale and near scale models in the mid-1990s, not with K-Line's S2's or other inexpensive models.  The same for the growth in CTT's and OGRR's circulation.  The reason Williams and RMT have had success is they've kept their volumes quite low and don't have dealers in any number or anyone stocking a product line, including themselves. 

This is just a very small hobby, and it's probably saturated with product of all sorts at the moment.  Even an inexpensive starter set is around $150 plus, which is a lot of money for a starter set compared with what you can do with a $100 or $200 or $300 video game.  That's reality from my experience with my own kids and other people's kids.  Adults in general want something more sophisticated than K-Line's S2 or an RMT Beep in my experience, if they can afford it.

K-Line could have remained successful, as you say, by staying small and making less ambitious, less expensive models, but their sales would have been a million or two or three a year at most, not 7 million dollars as they were when they went down the tubes.  It wasn't the scale models that did them in per se, it was the volume of product and expectations of continued growth to amortize their new investments, in my opinion.   If they had tried to sell 7 million dollars per year of their low end product they also would have had problems. You forget that what makes RMT and Williams work is low volumes, low overhead and no new tooling to speak of.  That's a one or two person operation and no ambition for the future. Maury had ambition and this is where it got him in this current era of no growth or contraction of the hobby.  A growing marketplace would have saved Maury's company.  A stagnant, declining market doomed his company.

[cr6479]

Will lionel/K-line make any more covered hoppers???? I have 15 covered hopper made by K-line when this all happened.

[brianel027]

But remember nblum, other companies have made it though lean times. Even today, saying that the hobby is in lean times right now, look at RMT: they're not pouring vast amounts of money into expensive new tooling, nor flooding the market with repititious arrays of offerings.

Based on Lionel's very own statements that starter sets and related starter items are the best and strongest area of sales, I want to propose that part of what has contributed to this so-called market slump is that the train importers are not responding to the actual market. Instead they have been in a do or die competition, trying to out do one another and looding the market with expensive high end trains of which there's the place where there are not enough buyers.

Now take K-Line for example: where's the presige in the 027 Alco S2 switcher? But there were kudos and prestige for their scale Hudson, which probably cost them dearly to develop. And for what? Good reviews? The hobby desparately needs the types of products that RMT is currently producing, and ironically RMT is getting good reviews. And I dare say sales of the BEEP probably dwarfed sales of the K-Line scale Hudson, as they probably dwarf many Lionel and MTH high end items too.

The train compaies need to respond to the actual market and not the vocal market minority. Yes, the minority complains more and can spend larger sums of money on train items. BUT they cannot support the multitude of product offerings. Fortuantely for Lionel, they still have their most valuable asset - their name. But their current catalog is still lopsided towards the expensive and the high end.

I don't think this so-called slump is actually customer created as it is manufacturer created. The train conpanies don't support their smaller dealers and give favoable wholesale prices to instead a select few (decline in advertising dollars in train mags). Lionel had it's best selling set in ages with the "Polar Express." When I talk with smaller dealers, they all say it's the starter set cars that sell out first! The train companies need to STOP going to YORK and stop patronizing the smallest segment of their market... that's the slump right there!

I've been and done too many train shows and I know there IS interest in this hobby and that KIDS STILL like trains. And that parents like the nostalgia of train sets and would like to buy them: but they have to find them and they have to be affordable. If you want to grow this market, right there are the two areas that need to be addressed. This hobby was at one time marketed at kids aged 8-12. Now it is aimed at kids aged 48-62, which is a dead end siding.

So long as the train importers continue their foolish investements in expensive technology and tooling for high end items, the "slump" that they have helped create will only get worse. Clyde Coil can rant and rave about Cherry Vanilla flavored TMCC... Lionel would have been wiser to put their money into making the basic CW80 transformer work correctly.

[nblum]

One factor not mentioned thus far in K-Line's demise is that the marketplace for three rail trains (and model railroad items in general) has dramatically dropped over the last five to six years.  Advertising revenues and pages in the magazines, particularly CTT, the premier three rail magazine, are  way down, perhaps as much as 20-30%,  as one important indicator of the health of the market.  The market has slumped after growing ferociously during the late 1990s.  K-Line's attempt to grow market share happened at a time when market went into a dive.  The growth in number of customers and their purchases was stagnant at best (Lionel), dropped by half (MTH) and there was little room for growth by K-Line to recover their investment.  IMO, that's probably the real story behind K-Line's demise.

[Poppa_Zit]

Lionel is telling dealers that it will no longer make any S gauge K-Line locos or cars.

However, it will begin manufacturing S gauge American Flyer-style high rail track in straights, long straights and the 27-inch radius curved tracks like K-Line produced. No 20-inch curves as the original Flyer.

Pop Z

[brianel027]

cr6479, here's the story in a nutshell: "Maury's Manifesto", Bob Grubba and the "Shared Technology Announcement."

Sometime around late 2000, early 2001, K-Line owner Maury Klein announced his intention to be the number one 3-rail train maker in 5 years. This 'manifesto' was royally trounced on the OGR Forum. Then came the announcement which much excitement that Lionel's Ken Silvestri and Bob Grubba had joined K-Line. Silvestri didn't last long (for whatever reason), but Grubba went on to lead K-Line's new scale direction.... for better or for worse... opinions differ.

Over the next few years, K-Line produced IMO an excessive amount of scale products based on totally new tooling which it now is obvious they could ill afford. This was a departure from K-Line's far more thoughtful and slower paced development of the prior decade. The scale passenger cars, the scale spine cars, the die-cast hoppers and the GP-38 had all been developed over the span of a decade. Rumours started that K-Line was having money problems. There were reported staff reductions and the toll-free 800 number was eliminated.

K-Line's strategy was to produced stellar better detailed scale models at prices undercutting the competition. But you don't need a college degree to see that when locos that are already competitively priced are being sold at blow out prices, this is not a good sign. But while K-Line was also gaining kudos for their quality, detail and their new technology, especially their new speed control, they had also dramatically cut back on the selection of the earlier less scale trains of which appealed to their early original customers. Many of the Train-19 offerings were reissues of previously released trains. The tradtional separate sale offerings were chopped back to a single Pacific, a single MP-15 and a pair of Alco FA's.

Last year Lionel realized one of their engineers had been providing Grubba with confidential engineering and technology information. Unlike the prior MTH/Lionel troubles, this time Lionel had emails and other incriminating evidence. By the evidence, it appeared that K-Line had intentionally taken the info. Grubba and Klein were personally named as liable as well as MDK (for the record, Grubba maintains his innocence). Lionel and K-Line reached an agreement that restricted K-Line's use of this technology and what could be sold/produced in the near future.

In one of the bigger mistakes (IMO) ever made in the 3-rail train business, K-Line announced instead that they had reached a shared technology agreement with Lionel, which utterly sounded nothing like the statement Lionel had issued over this legal matter... they were two totally different statements.  Lionel was furious and the agreement, which had been favorable for K-Line (in at least that K-Line could continue in business) was pulled in favor of more harsh action. K-Line declared bankruptcy for protection and in vain, sought a new buyer for the company. Their Chinese supplier, Sanda Kan was owed somewhere in the neighborhood of $6 million dollars by K-Line. The K-Line staff (there were some very loyal, decent folks in tech, parts and service... some had been with K-Line a long time) gradually went down to just a shoestring until finally the doors closed.

Sanda Kan (who also makes Lionel's products) and Lionel reached an agreement which would allow Lionel to have produced and to market at least a minimum set number of products from the former K-Line tooling, so that Sanda Kan can hopefully recoup some of their outstanding debt with K-Line.

And that's where it stands now. Time will tell what Lionel does with the K-Line product line, though opinions do differ on this. The one and only thing we can be sure of is that there will be substantial price increases in the new old K-Lionel products.

[GregM]

Dennis,

Are you referring to the engines K-line first offered on their web site?

I hope to find  a K-Line Lackawanna F3 set with the 4 motors.

What is the product number for the engines you want?  I saw an ad for Lackawanna "F7's" but don't know if they are what you are looking for.

[Bob Keller]

Well, there you go. Info from the source.

[cr6479]

Hi cr, You might want to check our October and November 2005 issues, and February and May 2006 issues for information on this. I believe this info is also archived in our on-line news section as well.

I have lionel 2006 train catalog volume 2.

[phillyreading]

Had to go to lots-trains.org,  my internet server must be differant than yours!

Lee

[Bob Keller]

Works for me.

[phillyreading]

BOB;

That does not work!!

Lee

[Bob Keller]

Uh, lionel.com

[phillyreading]

What is Lionel's website?

Lee

[dwiemer]

Dennis, Are you a Lackawanna fan, or do you just like this loco.  I was fortunate to get one of these and managed to buy a set of 18" cars to go with it during the last warehouse sale.  I have not seen any for sale in a long time.  It would be nice if Lionel produced some buy I don't think they will.  Would outclass their own offerings.

John,  Both, I do like the Lackawanna and have a few of their items, but really like the F3 set and with the passenger cars, would be a great set to have.  If anyone has info on one, I am in the market.

Lee, as to your order, I would contact Lionel, but I don't think you will have any luck since they did not actually charge you yet.  I believe the Lionel letter said that they were honoring orders, and that they were doing it at their cost, so you might get lucky since you actually have a order number.

Dennis

[Bob Keller]

You might try Lionel.

[phillyreading]

Where can I go to get info on a K-Line order?  Ordered something in January and have no idea if it is coming or not, item has an order number but has not been charged to my credit card.  Do I contact Lionel??

Lee F.

[Bob Keller]

Hi cr,

You might want to check our October and November 2005 issues, and February and May 2006 issues for information on this. I believe this info is also archived in our on-line news section as well.

[jefelectric]

Dennis, Are you a Lackawanna fan, or do you just like this loco.  I was fortunate to get one of these and managed to buy a set of 18" cars to go with it during the last warehouse sale.  I have not seen any for sale in a long time.  It would be nice if Lionel produced some buy I don't think they will.  Would outclass their own offerings.

[Anonymous]

Alas, long gone!  Lionel (which obtained the license to market K-Line items) is going to release a portion of the former K-Line product line, but I don't think you can expect to see much--and probably nothing for at least a few months.

Lots of stuff still floating around ut there though, so if there's something special you're looking for, now is the time to conduct your search.

 

[dwiemer]

In a word, YEP.  If you go to the Lionel web site, you can find the notice from Jerry Calabrese with information on the tentative plans with Lionel's share of the business.  Shame as they had some nice stuff.  I hope to find  a K-Line Lackawanna F3 set with the 4 motors.  I have most other items that I would have wanted.

Dennis

[cr6479]

Did K-LINE trains go bankedruped???? That is what i am hering from my train hobby store. I put this thread in the other forum by mistake. Here is the post on the other forum that i posted any answer would help http://www.trains.com /trccs/forums/3/show Forum.aspx