We are not alone/ An editorial

[BigJim]

As model railroad hobbyists, we are not alone. I picked up the June 2005 issue of “Hot Rod” magazine the other day. The one with the red and white Shelby GT500 on the cover. What an eye opening experience that was to be. I will suggest that you take the time to read the Editor’s Letter by David Freiburger on page 10, “The New Imports: Speed Parts“. It is only a page long and it may open your mind as it did mine, in more ways than one.

You may ask what does hot rodding have in common with my model trains. According to Mr. Freiburger the parts industry is facing an onslaught of imports from foreign countries making it hard for U.S. companies to compete. This is going on while we model railroaders are seeing companies moving their manufacturing overseas. Obviously, the same is happening in other areas as well.

Two things Mr. Freiburger mentions stand out. The first, in relation to recent shenanigans in the 3 rail community. I quote from column 2, paragraph 2, “ Then there’s China. The current joke around the industry is, “You know what R&D means in China? Receive and Duplicate.” That’s exactly what’s been happening, and there’s hardly an intake manifold that Edelbrock makes for a Chevy or Ford that hasn’t been duped overseas.” End quote.

Now where have we seen this before? Did you read the Pecos Brass saga in O Scale Magazine? Did you read the book written about the Wall Streeter that went to China to open markets? It must be more than obvious that China and other countries don’t work under the same ethics that we seem to be schooled under. Once the U.S. manufacturers decided to move operations overseas, they should have realized that they opening themselves up to unscrupulous business tactics. As I have said before, you have made your bed, now you have to lie in it. Unfortunately for our hobby, Mike either knowingly or unknowingly set himself up for what happened.

The second item Mr. Freiburger mentions is so scary that the previous paragraph pales in comparison. Again I quote, “ China became the biggest user of steel in 1994 and its consumption has grown steadily ever since. This year, iron-ore prices have increased up to 70 percent as a result. Soon, you’ll hardly be able to get anything cast or forged in America.” End quote.

Read that last sentence again. Now suppose we take out the “cast or forged” and replace it with “made”. And again suppose that since nothing is being made in the USA, they decide to quit selling to us. What kind of a fix will we be in then? Does Japan just before WWII come to mind? As much as the fighting spirit of our troops during WWII help to win the war, just as much or more important was our industrial ability to out-produce our adversaries.

After the so-called end of the cold war, our submarine force has been drastically reduced. Not as many submarines are deemed to be needed to keep the peace, so production grew almost to a close. Someone did decide that we needed to keep production of some submarines if only to keep the work force in place. Can you imagine today trying to build and successfully run a fleet steam locomotives? Look at what the lull in export coal has done to that industry. After years of layoffs due to cheap overseas coal and lesser demands on domestic export coal, now the coal industry is trying to make a comeback. Demand is up but, now the bloodlines have been broken and nobody wants to go down in the mines again.

Let me finish by quoting the last paragraph in the editorial;
“This isn’t about racism. It’s about disappointment in watching America become a servant nation whose most marketable commodity is its culture. Hot rods are a big part of that culture, yet the flag-waving hot-rodding marketplace cannot be counted on to actually pay more for products made in America. Will our hobby succumb to the world economy, or will we keep our American-made speed merchants in business? Only you can decide.” End quote.

May God bless America
Big Jim

[brianel027]

Big Jim, very good. I've read several articles by former government/military people who have concern over China's long stated intentions to have Taiwan as part of mainland China... by force if needed. China has been reported recently as to be in the market for new weapons systems. Why?

To China, Taiwan not being part of the mainland is an insult of the greatest magnitude. The Chinese have never been happy about that situation since 1949. Right now, more cilvil minds prevail in the Chinese government: they want American dollars and American technology. They've gotten the dollars and they are learning greatly from our manufacturing being located there.

But any change in the composition of the Chinese governement could change that viewpoint. Seems there are some people who are greatly concerned that it is only a matter of time until China feels confident enough to make a military move. One article I read stated that Americans on September 10th didn't believe that the US was so vulnerable to an attack until Spetermber 11th. I know articles like these can be written to drum up fear. But many I have read make very valid points.

Which is all interesting to me since the US has a defense treaty with Taiwan. The US has stated we would react with military force against China should they take action against Taiwan. How could we though? What would the US be able to do? We are and probably will be tied up in Iraq for sometime to come. And so much of our manufacturing now comes from China... would we actually bomb China? It would be somewhat akin to bombing ourselves. I'm sure it would take years for the US to rebuild our manufacturing capacity, especially if hostilities were to arise to such a point that all the American tooling, machines, dies, etc. remained in China.

Kind of funny that the desire for higher profits and more inexpensive cheap consumer goods may actually backfire.

I know there are many on the Forum who wi***hat Lionel (and others) had kept their manufacturing in the US. But the vast amounts of new scale high tech product development and new tooling that 3-rail buyers today demand from the companies, wouldn't have been possible had the companies remained in the US. Tooling costs here in the US are just prohibiitive to making so many totally new and different train items in such a short span of time. Does any one here really think MTH for example, could have tooled up so many new engines in such a short time span had the work been done in the mainland US? Another irony, at least to me.

Hey, everyone needs jobs, be it in the US or in China. But FREE trade needs to be FAIR trade. There's no way American workers can compete with the cheaper labor cost overseas. But without uniform prosperity in American, were going to need more cheaper goods.... and taxes, utilites, rent, fuel, healthcare, food, etc.

Come to think of it, all those other things have to be paid first before one can acutally buy the cheaper Chinese made consumer goods. Hmmm, what goes around, comes around.

[1688torpedo]

Hello Big Jim ! Thank you for the eye opening post. This is another reason why the U.S. should not be sending Jobs over to China at all ! It almost sounds like one of these days when the Chinese get enough confidence that they will provoke some type of military confrontation with the U.S. We send Jobs & Money all over this ungratful World and get no Goodwill for it and it just boils my blood.What did our ancestors come over here for anyway to build a Great Nation and then have our current generation of Politicians give it all away.? The Great Washington fought for Liberty. Now we are fighting shadows or so it seems. Toy Trains & other consumer goods can and should be made on our own soil,Unfortunately, Due to Regulations,High Taxes,and other Red Tape, this is almost Impossible in today's economy. Will it ever change,Who knows.? We need politicians who actually care for the American People more than they do their own interests and beliefs,And until this happens.only more of the same nonsense will happen[V][banghead][:(!]........Keith

[FJ and G]

I think Brian hit the nail on the head again.

[Anonymous]

Ok, I'm going to be slightly contrary to some of the other posts.... but before I do, let me give you some background and some things to consider.

1. I've been to China many times
2. I've been in a Chinese factory that made HO trains.
3. I've been to Taiwan many times,
4. I'd rather be poor in America than middle class in either.

American businesses are far, far, far more efficient and productive than Chinese. The only thing they have going for them is labor. And that is drying up. There are actual labor shortages in China in areas like Shenzhen and Shanghai. That is driving the cost of labor up, which in turn will raise prices, which will lower demand, and so forth. Soon goods from China may be cheaper, but the new markets are Vietnam, Korea, and the Philippines, and of course India.

Now, regarding the article on hot rods, it was said " It must be more than obvious that China and other countries don’t work under the same ethics that we seem to be schooled under. Once the U.S. manufacturers decided to move operations overseas, they should have realized that they opening themselves up to unscrupulous business tactics." What exactly is unscrupulous about taking something that is NOT trademarked, copy righted, or patented, and making it cheaper? Isn't that called progress? If you had a machine that could build something better, and there was a market for it, wouldn't you build it and sell it? It's the AMERICAN WAY.

The autoworker, train maker, parts supplier, widget builder who blames the Chinese for being more American is severely misguided. The person in New York who looses their job to someone in China would be just as upset if they lost their job to someone in Georgia, wouldn't they? Regarding the price of steel, well we haven't opened a new steel refinery in the country since the 80s. That's not China's fault is it? If you want to ask why we're not competitive or why prices are expensive in this country, look at the regulations and red tape we have allowed. Oil prices are the same way. We haven't built refineries, we haven't allowed drilling, and we haven't even explored all the oil fields because of regulations.

This is the exact same argument from the early 1980s and the auto industry. They were upset at these cheap Japanese imports.

The answer lies with us, the consumer. If we DEMAND better quality, we'll get it. If we ONLY buy things made in the US, there will be a market for it. If we stop shopping at WALMART then maybe the demand will go down. The problem with China is not that they do anything unscrupulously, EVERYBODY DOES. I don't think Enron was a Chinese company. The situation with Lionel and Korean Brass, etc. was someone BREAKING THE LAW (in this country and Korea). There are protections, there are patents, there are trademarks.


Yes the Chinese government helps it's companies, yes there has been dumping, but so has our Country. We pay farmers subsidies don't we. Why not manufacturers? We've had tarifs on things like steel up until recently, but we haven't worked on the productivity side of the equation. The US can compete with China, if we make the necessary infrastructure investments to do it.

The other thing to ask is.....with China growing and gaining more disposable income why doesn't Lionel or MTH open a Hong Kong or Beijing sales office? If they are going to be producing in China, how about opening it up as a market?

We need to stop acting like victims in this country. Stop blaming other people, and start taking responsibility for ourselves. Buy American, demand better Quality, write your Congressman about reducing regulations and barriers to competition. But don’t be a victim and don’t be a spectator.

[Anonymous]

QUOTE: Originally posted by brianel027


I know there are many on the Forum who wi***hat Lionel (and others) had kept their manufacturing in the US. But the vast amounts of new scale high tech product development and new tooling that 3-rail buyers today demand from the companies, wouldn't have been possible had the companies remained in the US. Tooling costs here in the US are just prohibiitive to making so many totally new and different train items in such a short span of time. Does any one here really think MTH for example, could have tooled up so many new engines in such a short time span had the work been done in the mainland US? Another irony, at least to me.

Brianel027 made some great points, but one thing about manufacturing is that plastic injection made parts are not much cheaper in China than the US. It's the assembly that is expensive. Most of the machines used to make those parts in China are either made in the US, JAPAN or now Taiwan. Dies and steel tools are made cheaper in Asia than the US, but the plastic costs are about the same. We buy several plastic parts in the US at a cheaper cost than from China or Taiwan. It's when you have to sit down and hand paint, or glue those parts that you look to the far east. MTH could have gotten the steel tools made in China and had them imported and produced the parts in the US. It's the fact that the Baltimore DC subburbs are not exactly a manufacturing hub that prevented them from doing so.

It's also interesting to see more manufacturers selling products direct. If you think about it, there is at least a 4 step distribution process:

1. Sub contractor makes raw materials (takes markup)
2. Contractor in China, Korea, etc manufactures product (takes markup)
3. MTH, KLine, Atlas, Lionel market, design, sell product (takes markup)
4. Dealer sells products to enduser (takes markup)

and of course
5. collector keeps for 20 years then sells on Ebay in like new condition (takes markup)

[FJ and G]

Lizard,

I was in mainland China in 1985 when Mao clothing was the norm and cars were rare. I recently heard that one of the reasons the Chinese and S. Koreans are not putting more pressure on the N. Koreans to end their nuclear program is because both countries see N.Korean workers (nearly everyone) as a new pool of cheap labor for them.

Who knows if soon our trains will be labeled made in China, after being outsourced to workers in N. Korea, in order to support their nuclear program against us and Japan?

[Frank53]

I buy Made In America whenever I can. I guess I have watched way too much History Channel.

[Anonymous]

Dave, your're absolutly right. But should we then stop supporting South Korea for the same reason? Are all the people driving Hyundai's un-American?

But that is the responsibility of the manufacturer, to know where the raw materials come from. China may import workers, but they don't import product from North Korea. So products made in N Korea won't end up in the US. At least not yet.

[nblum]

"It’s about disappointment in watching America become a servant nation whose most marketable commodity is its culture. Hot rods are a big part of that culture, yet the flag-waving hot-rodding marketplace cannot be counted on to actually pay more for products made in America. Will our hobby succumb to the world economy, or will we keep our American-made speed merchants in business? Only you can decide.” End quote."

With all due respect, manufacture of toy trains, hot rod parts, dolls, toys and consumer electronic goods in China are not indicative of the end of American technologic expertise or compromising our national security. I've checked out a bunch of the high tech medical equipment we have in our imaging (formerly Radiology) and laboratory departments and none of it is made in China. Same with the figher jets, airliners, freighters, software, automobiles, weather satellites, etc. that are stil made stateside, in Europe or other democratic developed nations like Japan, Singapore, etc.

The reason we are so materially well off is we are too darn rich to bother making cheap stuff locally, and people want our ideas and products and dollars at a nice exchange rate in exchange for their low tech products. So anyone, even someone on public assistance, in this country can afford to buy a TV set, a telephone, an HO train set, or any other consumer low tech device. You want a house, a car, health care, legal services, an aircraft carrier, Dreamliner or education that requires developed nation skills and labor, it's going to cost you, because we're not about to work for the modest compensation someone in China, India or Thailand is willing and loves working for.

This is how trade has enriched us, the opposite of imprisoned us. Do you really want your children working in a coal mine? Not because it's "beneath us" but because it is dang hard, dangerous, dirty work. Much nicer to work in a clean room assembling photovoltaic cells or as a respiratory therapist or aircraft mechanic, no?Sure it's hard on the guy or gal whose hot rod parts business is cratering because of low wage country competition. Do you want to pay more for your hot rod parts through taxes, direct or indirect, to keep him in business for a while? How about doubling or tripling the cost of a TV so that we can make it over here rather than Singapore or Korea? Tariffs and such are nothing other than taxes on the consumer to support a particular manufacturer or industry. Consider that, and whether you want your children or grandchildren to train for the jobs of the future or the past. Who wanted to tax the automobile manufacturers of the beginning of the 20th century to keep the farriers and blacksmiths, and horse tack manufacturers comfortably employed? In the long run it all falls apart and none of us are guaranteed that our jobs will not disappear through technical change or social evolution, IMO.

[Anonymous]

Well said Neil.

[Anonymous]

Dear Torpedo,

I want to say that I respect what you and Big Jim are saying…I used to feel the same way. But as a greedy American Capitalist who believes in free markets, I’ve got to challenge some of your points on a case by case basis. So please, this is not a personal attack at all, I think the points you make are shared by many who long for the “good old days”


“This is another reason why the U.S. should not be sending Jobs over to China at all !”--the US is not sending jobs oversees, we are importing products made cheaply.

“It almost sounds like one of these days when the Chinese get enough confidence that they will provoke some type of military confrontation with the U.S.”--this is unlikely to happen for many years. The Chinese need us as a customer much more so than we need them as a supplier. Believe it or not, we can all live for a couple years without toy trains, and cheap plastic toys (even if we don’t really want to).

“We send Jobs & Money all over this ungrateful World and get no Goodwill for it and it just boils my blood.”
--Mine too.

“What did our ancestors come over here for anyway to build a Great Nation and then have our current generation of Politicians give it all away?”--If your ancestors were like mine and did not come over on the mayflower, they were probably hated and attacked like most immegrents. The Germans and Irish came over to work in the mines and the factories, but they were hated, murdered and persecuted by the English and Dutch who were here first. The Poles, Slavs, Lithuanians, Italians and others came over later and were labeled as trash by the Germans and Irish who were now integrated into society. After the civil rights movements, “Good hard working Americans” were loosing jobs to those who had recently regained their rights as citizens. Recently you can’t turn on the news without hearing about “all the illegals” crossing the border to work in sweatshops and on fields…..do you want to work in a sweatshop or picking turnips? I don’t.

“The Toy Trains & other consumer goods can and should be made on our own soil,
Unfortunately, Due to Regulations, High Taxes, and other Red Tape, this is almost Impossible in today's economy”.
--What regulations are on the toy train industry? What taxes or import tariffs are there on toys? I haven’t heard of any. The problem is we as consumers don’t want to pay more for the products. Shareholders in the companies want a good return on their investments.

“Will it ever change, Who knows.?”
--The only thing constant is change.

“We need politicians who actually care for the American People more than they do their own interests and beliefs, And until this happens, only more of the same nonsense will happen”
--I couldn’t agree more.


Let's really look at the toy train manufacturers for a minute let’s see who IS employed by them. If it wasn’t for the “cheap” Chinese and Asian prices, this hobby would be DEAD except as a collectors hobby. Then the following AMERICANS would also be out of a job.

--the graphics designer who designs the logos on the boxcars and packaging who makes about $90K a year.
--The electrical engineers who create all the cool whiz-bang controls like TMCC who makes $110K a year
--The quality manager who travels to Korea and China to make sure we get high quality locos who makes $80K a year.
--The quality inspector who checks the locos when they arrive at the warehouse and tests them to see if they are in spec and makes $30K a year.
--The marketing manager who researches what we want and what products to launch next year that makes $140K a year.
--And of course Neil Young who would have to make some new albums if it wasn’t for his TMCC licensing.


Again, I’m not trying to say that everyone is “wrong”. I just want people to stop blaming other people and other countries for things that we as Americans have done to ourselves.

As they said in that movie once…

“God Bless America, and no place else”

[fievel]

During WW2, right after Pearl Harbor, America wasn't prepared for a huge conflict.
In order to gain the necessary manufacturing capacity, plants that normally
produced civilian goods were converted to war materials. This took time.
Initially, we were way behind the Germans and Japanese. So the automotive
sector built weapons. I've actually fired an M1 carbine made by General Motors.
(circa 1984, not during WW2 !)
I'm confident that we can build up again.

That said, I sure do hate to see history repeat itself. Red China is rattling it's
sabre. They might not be ready to challenge us militarily yet, but they gain
strength every year. It's no secret that they want Taiwan. But will enough
Americans care if there is a war when Red China asserts it's claims on
Taiwanese soil. I don't know. I most certainly do !!!
I'm not an economist, so I don't know how to fix this situation the world is in.
This is a very interesting thread. Each poster has made some good points,
at least with me.[soapbox]

Alright ! I'm stepping down, now. Next, please ![:)]

[BigJim]

I would like to thank all of you for your many points of view and for, up to this point, making it an intelligent, educational (at least on my part) discussion and not turning it into a "my trains are better than your trains" type of flame war. I would also like to thank CTT for not deleteing it in less than the blink of an eye.

[02camaro]

I'm not sure how this fits in to the discussion, but I've noticed something interesting over the last few weeks. I've been shopping for a new car and have been looking at where they're made. The Hondas and Toyotas I've looked at are built entirely in the US, while GMs usually have big portions made in China or Mexico. While I'd like to buy an American-brand car I'd rather support the American assembly line workers and buy a Japanese car. Just thought I'd mention that you can buy American where you'd least expect it...

[espeefoamer]

My mom's Honda Civic was built in Ohio[:)].

[spankybird]

My employer is a supplier to the Big 3 as well as to others, such as Mercedes (in the US asbly plant) and Honda (US asbly plants). You would be surprised how much of the “American Cars” are made outside of the US and how much is made by “Joint Venture Company” . A “Joint Venture Company” is a partnership of two or more of different auto companies, such as Chrysler and GM.

Other things is GM or one of its divisions, make parts (sub-assemblies) for Ford or Chrysler. Or that Chrysler (now Mercedes) owns 60% of a Japanese auto company.

[brianel027]

This is a very interesting discussion, and I respect the opinions of those who have been overseas and have insights that the rest of us may not have. I wouldn't argue for a moment that it is better to be poor here in America than in other countries around the world.

Though I will say that I know that tooling costs in China are 1/2 or more of what they would be in the US. That's a big chunck of change when one considers the large numbers of completely new train items that have been introduced in the past decade. Consider that before production of our trains went overseas, how many new and different train items were introduced in the previous 50 years? After the glory days of the postwar era, Lionel MPC did more new tooling in a short period of time than had been done before.

My only bone of contention plasticlizard is with the salaries you listed for various positions with train companies. Again, from my own personal knowledge, those salaries are much higher than people actually make that are working for some of the train companies. I wish I knew a graphic designer with a train company making $90K. Even by US government guidelines and studies, $90K is a lot of money for a graphic designer. Even in NYC, the world headquarters of graphic design, you need to be someone very special to command the kind of money for a "logo/packaging designer." Salaries average more than 1/2 less of that figure... and that's provided you have a minimum of an BFA (Master's preferred), a commanding portfolio and some work experience to boot. Again, I don't know everyone in the train business, but those who I have know were making substantially less than those figures given.

Anyways, interesting reading for sure.

[Anonymous]

Mercedes is one of the big three. Dalmer-Crysler is the name. Mercedes is Crysler.

Ford and GM are reporting huge losses in the last few days. Several of their less expensive cars are made by the Korean compny KIA as well. They hedged thier bets on everyone wanting SUV's and now the people aren't buying as many based on the price at the pump. If they don't change fast the employee pensions are going to go the way Delta Airlines did this last week.

[nblum]

Lately people have been bemoaning that we've become a service economy. As if that were a bad thing. Would it be better as it was in the early 19th century when virtually the entire population was involved in providing food? Or the late 19th century when 50% of job were railroad related? Or mid-20th century when 50% of jobs were automobile related? Productivity increases and transportation improvements now mean that 1% of the population produces 100% of the food, next to no one works in the railroad industry and the auto industry is fading as a source of employment. Wouldn't you like to have the disposable income to hire someone to fix your child's scoliosis, or treat your prostate cancer, or even mundane things like doing your laundry commercially? Is working in a steel mill really more desirable than working as a CPA or IT trouble shooter? Right now, the job opportunities and security are probably better as an auto repair guru than as an auto assembler, and the future has much of the same. Robots or the poorer nation's laborers will do the harder, less skilled, more dangerous work, and more and more of the rest of us will have white collar jobs. After all, in 1950 about 1-2% of the population went to college, now it's 60% or some such number. And these changes, in the long run, for most, but not all of us, are good. A rising tide lifts most boats IMO.

[spankybird]

QUOTE: Originally posted by emmaandy

Mercedes is one of the big three. Dalmer-Crysler is the name. Mercedes is Crysler. ...

Actually it is the other way around. Mercedes-Bens merged with Chrysler (US) and it was really a buyout of Chrysler. The new corporation is called DailmerChrysler. The Mercedes part is know as DC-AG and the Detroit (Chrysler) is known as DCX. We supply both.


Revised: After thinking about it last night, Mercedes-Bens was owned by DailmerBens, thus the new name DailerChrysler. BTW, they also own Freightline trucks.

[Anonymous]

Brianel, Agent 027, you may be right. A couple of the train companies are headquartered around Baltimore and DC, Kline is in NC where the cost of living is lower and the big L is in Michigan. I may be off on the specifics of some of these salary ranges. But these weren't meant to be exact quotes, just examples of the type of white collar jobs that were saved by listening to the market demands of this hobby and moving some of the production oversees.

Again my main point is that we have all discussed the rise, fall, and rise again of this hobby. What would have happened if this hobby was 100% American made? The answer is all of our electronics, all of our plastic figures, all of our plastic trees, all of our trains, all of our boxcars would all be more expensive. Would the hobby survive? Maybe amoung the high end collectors, but many more people would have gone the way of HO and N scale or RC cars.

All of the jobs I talked about, not to mention the Americans running train and hobby stores have jobs because of the availability of lower priced imports that have improved, not reduced, this hobby.

the title says it all....."We are not alone"

[brianel027]

Actually the cost of living is pretty high in the area of K-Line is located. Not only are there a couple of big universities, but the Raliegh-Durham area is home to many of America's leading pharmaceutical companies. A few years ago when I had a job offer down that way, more than several realtors laughed at me and the salary offer I had.

More than one apartment complex told me the job offer I had was excessively low for the cost of living in the area and that I simply wasn't being offered enough money to be considered. They suggested if I really wanted the job that I consider living in student dormatory housing. One guy had lived in Ithaca, NY where I lived at the time. Ithaca is a pretty costly area to live. But this guy laughed and said "The Chapel Hill area makes Ithaca look like a real bargain." Unfortunately he was right. I won't say where the job was.

[cnw1995]

Boy, this is about the most civil discussion of this topic I've seen on any forum...
I confess to being worried about some of these trends a bit - from my perspective sitting at the very very bottom of an ivory tower in academia, I continue to see the growth in marketplace efficiencies driven by technology and this weird global 'leveling of the playing field' that allows back-office and assembly processes to be based in the lower-cost / lower-salaried countries of the world. And as others have cogently pointed out - these different parts of the world have their own problems - including corruption and lack of infrastructure in Africa and South America, and some of the fractionalism in Asia (for example, rampart coastal / urban growth vs. rural stagnation in China, and the effects of a growning nationalism). I'm curious about the continuing trend of these producing nations (esp. China) becoming our debt-holders - funding our continued consumerism as it were - it has the unintended consequence of tieing us all closer together. Recently, I am intrigued by the growth of the idea or service industry or knowledge-based economy overseas - driven to large extent by American-educated, relatively westernized 'locals' - over the next dozen years or so, this'll be interesting to watch - apart from the regulation (driven by politics), there's nothing to stop these groups from being outsourcing partners of accounting and legal and design processes.

What does all this have to do with toy trains? Well, it is interesting to see the local effects of this consolidation in retailing - for example, our local hobby stores have gradually closed - to be replaced by Hobby Lobby, Hobby Towne USa and the like - each of which still carries train stuff but far less stock - at a pretty reduced price - compared to their predecessors. Unlike in the 70s, in many market segments - there's little choice to buy American...

[Anonymous]

Doug,
One of the things that I find most interesting about my trips to China is the difference in the haves and have nots at the factories I visit.

The workers will work for 10 hours a day 6 days a week for about 11 months a year, They usually go home for a month around Chinese new year. Most are between 17 and 22. They live in dormatories, they eat in cafaterias, and on their day off they go shopping. And each and every one of them has a cell phone. Their primary purpose is to make enough money to save so that they can go back to their home province and get married. They can usually save enough for a dowry or enough to start a small farm.

The owners on the other hand are usually educated in the west, and are usually from Hong Kong or Taiwan. Sometimes there is a Chinese person who owns the factory, but usually not. One of the reasons the Chinese want Taiwan is because of the wealth that is not staying in China.

There is a growing middle and service class. The people in the hotels and resturants are all very friendly, and want to talk about and visit the US. They are the middle class who live in apartments, are waiting longer to marry, and want to make money for the sake of getting richer.

Now, what country does that sound like..... working poor who want to just start and feed a family, absentee landlords that run companies from afar, and a middle class who wants to get ahead and move up....sounds like us.

poor man wants to be rich, rich man wants to be king, the king ain't satisfied until he rules everything.......Bruce Springsteen.

[cnw1995]

Well said, Lizard. I'm more familiar with the professional people who work in Hong Kong, who still see themselves as a breed apart. They work extraordinary hours, are also very acquisitive, and pretty articulate about being torn between developing their connection to the West (improved English skills and knowledge of western biz practices) or to the mainland (improved language and personal contacts). The economic ties with Taiwan are also interesting - there's a growing amount of overt Taiwanese investment in HK businesses. One of the unknowns is what the mainland will do (if anything) with the rural poor and those (unskilled) laborers migrating to the coastal cities as their post-revolution 'social net' unravels (also quite similar to the US). I've also seen research postulating China will overtake the US in production of greenhouse gases by 2007...

I guess I should shut up about this and go run some trains.

[Anonymous]

There's no fixing this. It's all about labor & can't be reversed. Did anyone catch the 60 min. that was on last month about how americans are going overseas, southeast asia, India for surgical operations because the cost is 1/3 what it is here. You go to a hospital over there,it's like checking into a hotel in Vegas. Ofcourse,when all of us are gone,it will be no big deal for our grand kids,because that's the environment they will be raised in.Your pension funds will all be coming from the goverment because of all the "bailouts" for delta & G.M. oh Social Security, what's that????? Easter

[BigJim]

I was reminded this past week,by an article in the paper, about all of the pirating of CD's, DVD's, etc. that is going on in the Far East. How can anyone expect to keep trade secrets in an enviroment like that?

[dk99358]

torpedo and plasticlizard wrote:

“The Toy Trains & other consumer goods can and should be made on our own soil, Unfortunately, Due to Regulations, High Taxes, and other Red Tape, this is almost Impossible in today's economy”.
--What regulations are on the toy train industry?

Clean Air Act, disposal regulations on materials like paint and oil that are deemed hazardous, OSHA, and EPA are few that spring quickly to mind. Oh yeah don't forget the local codes like how many parking spaces are required.

Used to be, a farmer who wanted to add more animals to his operation built a building and bought more critters. Now, he has to get permits, do site evaluations, storm water management, etc. and all that costs money and time. He also may have to deal with neighbors who have moved out from the city and don't have a clue about ag except what Norman Rockwell painted.

I read an article that claimed gov't regs. cost the average farm family over $6,000 a year.

Locally, they tried to build a gas fired power plant on the grounds of a nuclear power plant. The suburbanites rose up and cried NIMBY (not in my back yard). The company jumped thru hoops, was dragged to hearing boards, appeal boards and I think court before they gave up.

I don't want to see the likes of smoky Pittsburgh again but we need to keep a closer eye on the cost/benefit ratio of regulations and permit processing.

Dale

[Anonymous]

Sorry Dale, I'm not buying it.

You are absolutly right about industries like gas, steel, oil, and even farming. But it doesn't work for the toy train hobby. Let's take an example.

Let's say for the sake of argument, that a Lionel Mikado has $5 of paint on it. Now let's say that because of massive regulations it costs twice as much to throw away the excess paint as the price of the paint (a pretty ridiculus notion). Let's also assume that there is 100% waste in the painting process, that is, you spray as much on the collection table as you do on the product (pretty inefficient).

That would mean that instead of a $5 cost for paint it's a $15 cost of paint. Let's also assume that markup on toy trains is as high as 75%.

So the "regulations" on painting raise the price about $26.25. Now on that Mikado, do you think it's the 26 bucks keeping people from buying it? Nope, don't buy it.

Also, if it was the clean air/water/tree frog/ soil regulations that kept this industry in China, then why not buy the parts in China and assemble and test in the US? Again, it's the labor costs, plain and simple. Has anyone looked inside their engines lately? It's a rat's nest of wires and connections. Lot's of soldering, many little screws, lot's of "hand applied details".

We need to stop worrying about where toy trains are made and demand HOW they are made. Demand Quality and we might get it one day.