My thoughts about the big 4, your thoughts and comments.

[mackb4]

I'm not trying to beat [B)] a dead horse or anything,but with all the talk in the magizines and here on this forum sight about the concerns and complaints about the "Big 4 " of trains ,has it come across any of you that one ,some more than the others,may fall out of business [xx(] ?Remember when we used to have four auto makers here in the U.S. until AMC got bought out by Chrysler.AMC just like some of the train manufacturers ,bought parts from the competiton.And AMC spent more money on a few new ideas that did'nt pan out (the Matador for one )that eventually led to their exit of the auto industry.Any thoughts or comments?[:)]

[spankybird]

Chrysler is now owned by Mercedes. GM spun off Delphi. Delphi filed Chapter 11 this past week and some say GM will follow.

[Buckeye Riveter]

Who Moved My Cheese? by Spencer Johnson.

[Blueberryhill RR]

I'VE GOT THAT BOOK, BUCKEYE
Anyone ever read... " On A Clear Day, You Can See General Motors " ??
by John DeLorean

GM has sold many divisions. Inland, Frigidaire, Electromotive, got rid
of Oldsmobile.

Saturn, Chevrolet, Pontiac, Buick are losing money.

Cadillac, Corvette are making big money. Like GMAC.
Next one to go.... Watch out , Buick.

Chuck

[cnw1995]

Steering the conversation back to toy trains a bit, I'm not concerned. Even the manufacturers' think they're pumping out a bit too much new product that ends up chasing not enough buyers. I'd add a fifth and sixth company to your presumed four - Lionel, MTH, K-Line, Williams - Atlas O and Weaver. There's bound to be a sort of market correction, adjustment, shakeout - whatever you want to call it - as a large group of hobbyists (the 'boomers') age and slow down on their buying. And the legal battles - like in any commercial setting - just suck up resources that might be better used to market or improve the products. Using the analogy of the automotive industry might not be accurate - by some metrics, there are more nameplates as well as manufacturers (like Toyota, Hyundais, etc) building in the US than ever...

[laz 57]

I agree with you DOUG.
Why do you suppose Lionel , MTH, K-line, Williams,have a yearly blowout sale?
Lots of people in t he hobby can't afford the high prices that they set, so instead of sitting on these prices they begin to reduce the prices and still make some money.
I wi***hey would set a relatively affordable price so more people could afford to get into running and collecting trains. I think we might be in a resession so to speak in our hobby, especially with the price of fuel and the unknown winter approaching.
Just my 2 cents.
laz57

[Big_Boy_4005]

I just wi***hey would shrink the catalogs and quit stomping on each other's feet.

[FJ and G]

Williams used to have a lot lower prices but even their prices have climbed since the advent of the Golden Oldies stuff. Glad I got my diesels from them at bargain basement prices. I've got enough trains now never to be concerned about prices and purchases again.

I've just got to get out to the backyard and start surveying some routes. I may put in a large loop of Atlas track before starting the pond and waterfalls project.

As to cars, I'm happy with my Toyota Tacoma pickup truck and Jeep Wrangler (94). Have been driving jeeps ever since I drove my 1st in the USMC in 75. My fiancee has a Mercedes, which she picked up for $18K at CarMax. A real bargain all 3 vehicles. No problems at all.

[1688torpedo]

I think that sales will be flat and may even fall this Holiday Season due High Fuel prices,excess inventory of Trains. And, overall poor economy due to layoffs,Low wage jobs and cost of living.

[cnw1995]

I'll tell you guys, wait'll you hear the screams from those who heat with natural gas (myself included) probably right before Christmas, as the first breathtakingly large bills come in... hope for a warm winter... But there's a danger in assuming everyone in the hobby is like ourselves - there appear to be plenty of guys who complain about the price of gas, but are still capable of dropping $1K on a toy (wish I were one of 'em!)

[marxalot]

I'm thinking of airlines instead of car makers but the original question applies. I have to wonder if it wouldn't be better to just kill one of those companies flat out instead of letting them drag down others for years. Hey, if there are not enough passengers to fill the planes we must have too many planes. So please let ATA or some company go away. The others may actually be able to make a profit then. And the same for the train makers................. the market can only bear so much product in a price range..........

but what do I know!

Jim

[:)]

[Blueberryhill RR]

QUOTE: Originally posted by cnw1995

I'll tell you guys, wait'll you hear the screams from those who heat with natural gas (myself included) probably right before Christmas, as the first breathtakingly large bills come in... hope for a warm winter

I agree with you, Doug. As high as 70 % increase in Midwest.
Back to trains, I, personally think that William's is doing better than the others.
And, yes, they all have blow out sales. Look at what GM started with the
" Employee discount for everyone". The fact is that the employee discount is
nothing now as compared to what it was 20 years ago. We used to get
a flat 40 % of off list price.
I bought a Southern Pacific Budd set from Williams for $ 137.00. New.
Chuck

[Warburton]

I've been complaining about the glut of new product on the toy train market for years. Ever since MTH jumped with both feet (and then some) into the market. The toy train market is relatively small and cannot absorb the product which has been made in the past ten years. It has to end badly, in my opinion. The only question is who will fall first. I'd bet on the most leveraged firm, as they are always most vulnerable. Using that criterion, it would be (from news reports) K-Line that's on shakiest ground. Perhaps some mergers will eventually occur, and there's where the legal maneuvering is most interesting. It will be interesting watching it all go down, anyway, but it really didn't have to be this way if they hadn't all gotten so greedy.

[Anonymous]

Do you think they maybe "got greedy" to capitalize on the fact that the baby boomers ie the biggest group in this hobby are about to retire and be forced cut back on spending? There are many 60 something and 50 somethings fewer 40 somethings and relatively few 30 and 20 somethings in this hobby. It seems the numbers in this hobby are going down across the board from the toy people to the scale people. The companies seem to be trying to make the most now before the customer levels drop. When the money is gone so will the companies.

Look what happend to O scale since the 50's it dropped and dropped and now it is hard to find detail and scratchbuilding parts. The things that are available mostly are three rail converts. There has been a bit of a rebirth based on the desire for scale 3 rail but it is not like the days when Walthers made O scale car kits. It will be interesting to see what the toy section of the hobby looks like in 10 years. How much will be around in 15 years not as much I imagine.

I was born in 1975 and to me it seems that I am in the last age group that could find 3 rail toy train sets at the toy stores with the short exception of the Lionel Safari and Consruction sets at Toy's are Us in 1999/2000.

[marxalot]

Ooops,something I meant to include before regarding heating with natural gas. Consider using good quality electric space heaters to supplement your natural gas systems. In the past electric heat was always the higher cost of the two but that will not be the case this winter. I do not think the electric utilties can just raise their rates; I sure of it for Indiana. Anyhow, there will be a point where maybe having the gas set back and a space heater in a room would be the best economically..... but safety is the most important consideration. Old house, old wiring, don't mess with it. New house, new wiring, be careful.

Now trains.................. I think there are too many mfgrs. making too high priced a product. They will go away eventually and the products of today will be even more a collector item.

Jim

[Anonymous]

I've never considered that there is/was a Big Four in O gauge toy trains. I still see it as a "Big Three," with everyone else falling somewhat lower in the rankings. That may change, or perhaps already has changed, but I would have to see reliable evidence of that. Truth is, I suppose it's more accurate to refer to a "Big Two" these days, since I imagine that's where the bulk of the sales are found. The others--Atlas, Williams, Weaver, etc.--all make some great products, but aside from Atlas (the overall firm with N, HO, and O products included), I can't imagine that anyone comes close to the current Big Two.

[prewardude]

When all is said and done, I think there will be three left: Lionel, MTH, and Williams. Out of those three, MTH is my current favorite manufacturer (thanks to their Tinplate Traditions line), but Williams is the one that I most respect. From everything I have read, Jerry Williams is a class individual, and he runs his company the same way: no lawsuits, no BS - just quality trains at reasonable prices. His protege (Mr. Wolf) would do well to learn a few more lessons from his former boss, IMHO.

'Nuff said.

Regards,
Clint [|(]

[Warburton]

My point about the manufacturers "getting greedy" is this: think back to the 1970s and 1980s. How much new tinplate product was offered each year? MTH didn't exist. Williams was a niche player and K-Line offered a few simple starter sets and a handful of 027 freight cars. That was it, period.

Contrast that scenario to the present one with huge numbers of product offering from each of the aforenamed makers each year, year after year. How many more toy train enthusiasts are out there now than back in the 70s and 80s? From what I can tell, although the TCA added many new members in the 25 or so years since, they are now seeing a drop in their membership (over the past several years). So, it looks like interest in the hobby has peaked (probably around the late 90s) and is slowly falling, yet the makers have (until this year) been pumping out a big volume of new offerings unabated. Something has to give!

[Blueberryhill RR]

AS I MENTIONED ON ANOTHER THREAD....
Did anyone ever wonder what would have happened to the
toy train companies, if all their operations were in the USA ???

Were there any law suits before they went to China??

Why did they?? To make more profits and sell for less ??

Who forced that decision??

Chuck

[Anonymous]

QUOTE: Originally posted by Warburton

Something has to give!

Something already has. That's why, with the apparent exception of MTH, you're seeing thinner catalogs, fewer new products (as opposed to new livery on current products), hobby shops going out of business, fewer manufacturer ads in the magazines, consolidation of the major train shows, expansion of the TCA York Meet by an extra day, and various other signs that point to a realignment of the existing--and formerly robust--toy train market. It was bound to happen, because even though the industry fell all over itself in an attempt to produce a treasure trove of product over the past decade or so, that same industry did precious little to help to grow its market. And even when it did--the Lionel "Polar Express" situation of last year being a good example--they pretty much blew it by failing to recognize and really exploit the full market potential.

And responsibility also squarely rests on the shoulders of all of us--the hobbyists. We demanded more--more new product, more detail, more accuracy, more features--and we wanted it all at the cheapest price. No manufacturer can keep meeting that kind of demand indefinitely, and the end result is what we're beginning to see now.

[Blueberryhill RR]

QUOTE: Originally posted by Allan Miller

QUOTE: Originally posted by Warburton

Something has to give!

And responsibility also squarely rests on the shoulders of all of us--the hobbyists. We demanded more--more new product, more detail, more accuracy, more features--and we wanted it all at the cheapest price. No manufacturer can keep meeting that kind of demand indefinitely, and the end result is what we're beginning to see now.

Very well put, Alan.
And that goes for every other industry.
Chuck

[brianel027]

Not all of us demanded more scale detail, more realism, more elaborate electronic digital control systyems. Less is more, and simplier is better. Watercolor paintings can be every bit as good as a beautiful photograph. But no expects a watercolor artist to actually paint the sky... he/she gives an "impression" or "representation" of it.

Just like art, the "representational" train products may not have appeal to everyone, but they still have beauty.

Well, at least speaking for myself. I would have been long happy had the train companies recognized that modern road names on beginner products creates a connection between the "toy" and the real thing. I'd been happy had the K-Line S-2 stayed in production with some contemporary roadnames. And as much as I would have liked to see at least one other new "027" car tooled up in the past 15 years, I do really like the Lionel Waffle Box Car and it is my favorite box car of anyones.

Well, MTH may still have the biggest catalogs. But they also have the longest yearly list of cancellations. And despite improvements, reports are that they still have a problem getting products out even closely to being on announced time.

And I fully expect the vast majority of these model trains to never again have the financial collectible values they once did. In any collector market, there needs to be a broad general knowledge and appreciation of the products. The train companies have blown their best opportunity for long term growth for the train market with youth in favor of catering to the short term adult market. The high prices commanded by trains were driven by a vast appreciation of the product, buyers with disposable income, and a desire to own premium condition train. Lionel trains during the 1940's - 1950's were made and sold in the millions. Despite today's improved variety in products, production runs are smaller and the trains have far far less public visability than they did in the past.

I don't see how trains can possibly have the values in the future that nearly all did during the 1980's early 1990's when even Lionel MPC box cars very typically went for $40-$60 or more. Put that price on one of those box cars on eBay as a reserve and see what happens.

[hugoroundhouse]

I don't care qbout the Big Four as long as Gilbert keeps producing those Postwar Flyer beauties right here in the good ol' USA.!! Oh, wait a minute.....

Jim E.

[Anonymous]

I agree with every point you made, Brian. And I imagine that the records (if they were available) would show that the kinds of toy trains you, I, and many others perfer still account for the largest sales volume and they are certainly the trains that bring new faces to the hobby.

But so much of the manufacturers' resources are being devoted to catering to the high-end crowd--where the largest profits-per-item are being made--that I'm afraid the more modest traditional lines are being somewhat neglected. Not in all cases, of course, but to the extent that little real focus--especially marketing emphasis--is being given to those more traditional toy trains. The trains are there in some number, but who, outside of those of us actively immersed in the hobby, hears about or sees them?

The end result, of course, is that the overall market will continue to shrink as novices shy away from what they preceive as a too-costly hobby devoted to intricate, high-end items that are beyond not only their means, but also beyond their level of interest.

[Jumijo]

The high end stuff is here to stay. But how much of it we see in the future is any one's guess. I think there is a trend in the industry towards the entry level, less expensive products. I think it's slowly dawning on the powers that be that there are more low-end users than high end. The high-end stuff might have a higher per-unit profit margin, but it isn't selling. Blowout sales illustrate that fact clearly.

Jim

[FJ and G]

Toy train companies don't release their profit statements. However, I think that they all are charging too much $$$ and not just on those 1K++++ locomotives. Even the so called bargain items.

Not to pick on K-line but their $99 Porter is considered a real bargain.

Well, I'm reading my latest Garden RR magazine (Oct05) and on page 33, there are Porters for $78 and those are much more massive than the 3-rail variety and Heislers for $349.

[Jumijo]

I agree with you 100%, David. MTH Railking boxcars sell for ~ $35.00 a pop. Lionel's are ~ $25.00. No way on Earth do either of those cost more than $5.00 to produce. I guess the thinking toward the hobbyist is "if they want to play, they have to pay".

Jim

[palallin]

QUOTE: Originally posted by emmaandy



Look what happend to O scale since the 50's it dropped and dropped and now it is hard to find detail and scratchbuilding parts. The things that are available mostly are three rail converts. There has been a bit of a rebirth based on the desire for scale 3 rail but it is not like the days when Walthers made O scale car kits.

2 rail O scale is in better shape now tha it has been for decades, possibly forever. Kits abound, though more are in plastic than wood, and RTR is awash in new diesels (I will grant you that the steam situation isn't quite as good as it was in the '70s). Track, electronics, and bulding kits are all over the place. In fact, I'd say that, as the 3-rail market shakes out, many of those scale-oriented folks are going to make the plunge into 2-rail scale. What companies like Atlas are doing are sure encouraging that trend.

I'm going about halfway, myself. My new layout will accomodate both, and I am just about done purchasing in 3 rail. I need to fill in a few pieces, but most of my future buying is trending toward 2 rail. I am frankly sick and tired of what passes for 3-rail manufacturing today.

It may seem strange, but I much prefer MPC days to the "horse power" wars today. If I can't have what I want from whom I want it, I'll start looking elsewhere. All model railroading is a series of compromises, and I'm adjusting the kinds of compromises I want to live with.

[cnw1995]

You know, when I first saw this thread - I thought it had to do with the Big Four - what was that line's name - the Chicago, Cinncinati, I can't remember- they were absorbed into the NYC, no?

[spankybird]

The Big Four was Clevealnd, Chicago, Cinninati and St. Louis. I am not sure if if became part of B & O. I have it at home.