No Longer Loyal To Lionel

[Algonquin]

Hi Joe,

Quality control is becoming a bigger issue these days in light of all the problems manufacturers are having with their products. Lionel has had problems with the new ZW-180 as you indicated as well as the SC-1 which, cannot handle the amperage demands of all of Lionels accessories and the newest odyssey engines which appearently were not assembled well at the factory causing operational problems. MTH has had recent problems with their starter sets over the Christmas season with a 7% failure rate on those sets and their recall of the E-8s for decoration, wiring and sound problems.

In purchasing Lionel over the last 15 years, it seems to me that quality problems show up most of the time with new or revised products. A lot of the quality problems we see, I believe, are due to new technologies or other changes in the engineering and manufacturing process.

As with any business, change is always difficult to manage and effectively change your organization to properly implement the changed processes.

Mike Wolf recently stated the main reason for the problems with the starter sets was that MTH tried to do to much to fast. This was a change in the way they had been doing business and the company did not adjust adequately to these changes.

Lionel may go through similar challanges as they move the last 50% of their total train production overseas. We will see how well Lionel's management adapts to these new changes.

Knowing that these "new" techologies can be initially released with some problems, I try to wait until the market has tested them before I jump in. I waited five years before buying a TMCC control system and will wait for PS-2 to shake out before I dive in. I am currently waiting to replace my postwar ZW's with new power. I am glad I did not pre-order the ZW-180's.

On the other hand, new locomotives are my downfall. I will pre-order a new locomotive because I am afraid that if I don't, it will be sold out and I will miss it. There is no rush for me to by transformers and control systems, they will always be there (except for maybe the Z-4000, which I believe is currently out of stock), but those trains (I got hit on the Odyssey Mikado, other thread).

Just my opinions.

Tim P.

[JFermani]

I would hope that Lionel could improve the engineering of their products. 180 power supplies with the cords attached backwards, T1's with fat wheels that short out on other manufacture's track etc.... If their product improves, and I expect it will, they will be a serious threat to the well being of some of the other manufactures. Not that I am looking to see the competition go away but it will be hard for others to compete. I still think Lionel makes the best accessories that provide good interaction between train and accessory. Their new scale engines look great and until DCS comes out, TMCC is the best O gauge has to offer for command control. Even when DCS comes out, Railsounds 5 is right around the corner. Its going to be interesting to watch as time goes on. But to get back to your original idea Tim, I agree and I think the products they produce will vastly improve.

Joe Fermani

[jsanchez]

I think they should go ahead and move all the white collar jobs over seas, think all of the money they'll save in benefits, wages,etc.,no human rights, religious freedom, or environmental controls, and best of all folks can have cheaper trains....though at the rate U.S. Manufacturing is laying off and dying that won't be a whole lot of folks.
Can you imagine having a U.S. Goverment that promoted manufacturing, instead of killing it GATT, NAFTA, and to think both of our mainstream political parties have found a way to come together on this, at the expense of millions of families. Amazing.


James

[Anonymous]

It is not Lionel's or fault it is all the people who spend their money on products made in other countries.Everyone I know wants to make top dollar when they work but aren't willing to pay higher prices for "Made In The U.S.A." products so we can keep AMERICANS working.I sent an e-mail to Lionel expessing my concerns and I couldn't beieve the response,"Thank you for the comment".Just as I said in the e-mail my all Lionel layout probably won't be all Lionel now.

[Anonymous]

I think the one thing to remember here is why the company lasted 100 years and price wasn’t the case. American Flyer, Marx and many others where less expensive and provided a wide range of quality for the price and at least at one time were all make in the US.
Innovation and quality is what comes to mind the most when you talk to anyone about the (old) Lionel Company. Bringing back 50-year-old accessories, cars and locos again and again with perhaps a different color roof on the latest offering isn’t the last word in innovation. Even when they bring them back they don’t bother to improve them, FMs with chrome hand railings, EP5s with incorrect trucks but thank God we have a chance to buy a Virginian rectifier (incase you missed it the 1st three times it was offered!) wrong trucks 3 inches too short but it has numbers in the number boards and only cost 4 time what it did in 1957!!
If Lionel management would have remembered what created the loyal following it once had and implemented it throughout its product line customers would have been willing to pay more and stay loyal. The prices on pre 1969 Lionel did not get as high as they are because they were made for collectors. MTH while being a good competitor is not to blame; He started a company and is trying to make it grow from a startup. Lionel management was in trusted with generations of development and dropped the ball big time. The US government could probably save a lot of money by having our coins minted in China (under our control) I just don’t know how good I’d feel pulling that change out of my pocket.

[Algonquin]

Some other positive aspects of this move we may not have thought of:

This won't help the 350 or so relatively low wage Lionel factory workers losing their jobs, but in addition to reducing prices with the money saved by manufacturing overseas, I expect Lionel will be able to increase staffing of the higher white collar jobs to support areas of increased new product developing and research and project management of the overseas work. I would expect the current 150 white collar staff to increase to maybe 175-200.

Just an opinion. What do you guys think?

Tim P.

[Anonymous]

Joe, Tim, Jim...

All points well-taken. Don't get me wrong, I will still buy Lionel, probably a lot. I just won't feel as bad about buying from other manufacturers. Actually, it's kind of liberating. I agree that it will make Lionel much more competitive and drive prices down, thus benefiting the consumer. I guess we should just be thankful that there are so many quality items available from so many manufacturers.

Paul.

[Anonymous]

Joe, Tim, Jim...

All points well-taken. Don't get me wrong, I will still buy Lionel, probably a lot. I just won't feel as bad about buying from other manufacturers. Actually, it's kind of liberating. I agree that it will make Lionel much more competitive and drive prices down, thus benefiting the consumer. I guess we should just be thankful that there are so many quality items available from so many manufacturers.

Paul.

[Anonymous]

Joe, Tim, Jim...

All points well-taken. Don't get me wrong, I will still buy Lionel, probably a lot. I just won't feel as bad about buying from other manufacturers. Actually, it's kind of liberating. I agree that it will make Lionel much more competitive and drive prices down, thus benefiting the consumer. I guess we should just be thankful that there are so many quality items available from so many manufacturers.

Paul.

[Anonymous]

Joe, Tim, Jim...

All points well-taken. Don't get me wrong, I will still buy Lionel, probably a lot. I just won't feel as bad about buying from other manufacturers. Actually, it's kind of liberating. I agree that it will make Lionel much more competitive and drive prices down, thus benefiting the consumer. I guess we should just be thankful that there are so many quality items available from so many manufacturers.

Paul.

[Anonymous]

Joe, Tim, Jim...

All points well-taken. Don't get me wrong, I will still buy Lionel, probably a lot. I just won't feel as bad about buying from other manufacturers. Actually, it's kind of liberating. I agree that it will make Lionel much more competitive and drive prices down, thus benefiting the consumer. I guess we should just be thankful that there are so many quality items available from so many manufacturers.

Paul.

[JFermani]

Paul,

I too am sad that Lionel is moving off-shore but I took a look at my most recent purchases from Lionel. The new engines which I "love" so much and think I got some value for my dollar were all made overseas. I spent over 600 for the streamlined K4 when in came out a few years ago and it was made in the US. I only spent 450 for the PA E6 from Lionel and is has more features and better detail. The PA camelback is the same story. I agree that its a shame that Lionel has to make this move but I for one can not offord to spend over 600 dollars for motive power with half the features. Just look at the new catalogue and you can see most engines are packed with features and more competive prices. All that said and done, I can also understand your point as well and you must do what you think is right. Thats why they make vanilla/chocolate/Strawberry ice cream. Just be happy with what you buy.

Joe Fermani

[Algonquin]

Hi Paul,

I to am disappointed Lionel will no longer manufacturer in the US. However, it has been clear for some time that Lionel could not match prices with companies like MTH, K-Line, Weaver and Williams who have always and continue to manufacture all of their trains in Korea and China.

I can't completely blame Lionel for moving their manufacturing. Before MTH mounted a major challange to Lionel, Lionel could afford to charge what it cost to produce in the US. As Mr. Maddox of Lionel and Mr. Edelman of MTH have stated this week,"MTH was able to eat Lionel's shorts" by manufacturing overseas.

We as buyers of trains shifted our money to these cheaper imported engines. Last year MTH sold over 50 million dollars of trains, all imported. Lionel sold over 100 million, half of which were imported. We, based on our purchases of these cheaper imported trains are just as much to blame for this loss of US manufacturing than Lionel or MTH.

Some people tell me it is MTH's fault, forcing Lionel to match its imported prices. However Mike Wolf did what any good businessman would do. Mike worked for Weaver and forged a relationship with Samonsa in Korea importing tinplate reproductions of tin plate trains. Mike formed his own company and began importing tinplate trains under the MTH brand. In the early 90's Mike worked with Lionel to import the Lionel tinplate series of trains and they also stated importing dicast trains for Lionel such as the S-2 turbine. Mike was fully aware that trains could be made much cheaper in Asia that in the US. That is why he left Lionel and moved aggressively to import in direct competion with Lionel. Lionel has been forced to manufacture overseas to remain competitively priced with MTH. I don't blame Mike Wolf for Lionel having to close their US manufacturing, if Mike had not started importing agressively when he did someone else would have seen the opportunity and done it. The move was ultimately inevitable.

We have to try to remember that this will be good for the hobby in that Lionel will be able to lower its priced on a lot of products that have been high relative to similar MTH imports like the F-3s.

Just my opinion.

Tim P.

[Anonymous]

Paul,

In our conference call yesterday with Lionel I asked Maddox if any thought was put into keeping some kind of minimal production in MI at least for P.R. purposes. Perhaps a commemorative boxcar could be produced from time to time. I was told that there was just no profitable way to do any manufacturing at the MI factory.

Bottom line: Lionel is a business. If "Made in the U.S.A." doesn't make money and "Made in China" does, then manufacturing is going to take a boat ride.

You've probably found out that many people are happy about the move because it might mean lower priced products. When asked if prices would go down because of the move, Maddox said Lionel has had and will continue to have "competitive prices".

Jim Schulz
Associate Editor, Trains.com

[Anonymous]

My loyalty to Lionel ended today after I heard the news that they decided to move all their manufacturing to China. What a pity...another American institution gone. Believe me, I understand the competitive nature of big business, as I work for a large corporation myself. However, one would think they could have maintained a small work force here, at least for the sake of partly claiming "Made in the USA". I wonder if management plans on downsizing as well. I'm sure they could trim a lot of fat there...or, better yet, move that to China as well! MTH, here I come...