The following is the body of an email I just received. I think it is worth your attention:Industry UpdateThe hobby is in a manufacturing turmoil, due to a lack of production capacity now. There is no question; you have seen the delays from virtually all manufacturers. Pick any manufacturer’s name and their products are delayed. Why you ask? There are several reasons. The primary one is that the largest factory which produced models for a wide variety of manufacturers has shut its doors to those manufacturers. After it had been bought and sold several times, it was bought out by the Bachmann group and now produces models solely for Bachmann. This was a huge production facility, about 10 times the normal size of a typical Chinese factory. Or think of it as 10 factories operating under one name.There is no other "big" factory, equivalent in size. As a result, many manufacturers have been forced to scramble and find another factory that can produce their models. However, there is no other "A" size factory, the next size is "B" size, 1/10th of the "A" size. If you can imagine the size of China’s manufacturing sector, you might well say to yourself there should be lots of factories. There is, they produce lots of electronics, such as games, toys, appliances, telecommunications, etc. However, model trains are way down at the bottom of the list, as it is such a small market. Believe it or not, there are very few companies capable of model train production. There are about three "B" size main factories and some smaller "C" size factories. Then you have the issue of complexity. Our hobby products involve tool and die making, electronics, motors, plastic extrusion, assembly, and painting. All of this has to be done with fine tolerances. All of these areas require dedicated areas and skilled employees. Compare all of that to an example, a “Barbie doll”, with much greater tolerance for error. The result to you the modeler is that your promised future models have been delayed. As dealers, we and all other dealers are the recipient of modelers’ frustrations, as we are their direct contact. I can certainly understand and empathize with modelers’ frustrations. We have the same frustration, except it is multiplied a hundred times or more. We, as dealers and distributors, plan on models delivered in future months for our cash flow planning, staffing and other commitments. Every store, distributor and manufacturer is experiencing the same problems. There is no immediate fix or date when “normalcy” will return to the hobby.Another issue affecting production is working capital, or more specifically, the lack of working capital, both in North America and in Asia. The financial crisis of 2008 has hammered businesses around the globe. Working capital has dried up for many manufacturers. In foreign countries, a number of manufacturers may be taking funds from one customer and applying them to another, they are “robbing Peter to pay Paul” to stay in business. I know of a number of our North American importers, with manufacturers overseas, who are in this position of waiting, and waiting, and waiting. They have supplied funds to their overseas manufacturers for research and development, tooling, raw materials and production costs, and are waiting on receiving a pre-production sample. They may even have approved the sample and are waiting for production to occur, but they are still waiting. It is out of their control. Now is not the time to berate manufacturers for not delivering products to you. It is a global issue.
As one of the major dealers in North America, we have a large number of reservations. We are also a distributor and a manufacturer (with our own Pointe St. Charles caboose project). We like you are experiencing the frustrations of delays.The only thing we can say to you is to be patient. Take care.All the best,Tom Tomblin, President,Canadian Model Trains Inc.
Here we go...
https://tstage9.wixsite.com/nyc-modeling
Time...It marches on...without ever turning around to see if anyone is even keeping in step.
I don't agree that this is a can of worms. It's needed!
I saw this on one of the Canadian model railroad Yahoo Forums and was going to post it here and on the Atlas Rescue Forum.
IMHO, that letter provides an excellent perspective from the side of the manufacturers. I'm one of those modelers that was a bit frustrated because certain models took a very long time to arrive on the market, or models that were being considered for production were cancelled. So this letter helps to explain things from "the other side of the desk". It's respectfully well thought out and stated.
Will it make us any happier? Of course not. I knew what was happening, but reading it from the manufacturer's side helps me to appreciate their position more profoundly. So for me, it means that the liklihood of seeing another Athearn RTR run of FRISCO SD45s has diminished considerably. These are tough times and everyone is feeling the effects all the way around.
"I like my Pullman Standards & Budds in Stainless Steel flavors, thank you!"
So it appears that, for the immediate future, it's Bachmann or nothing.
(In my case it's Bachmann, or Kato, or Tenshodo, or Katsumi, or (fillintheblank,) plus money exchange fees, international shipping, customs (if any)...
Thanks for the insight, Tom. Now we know what happens when one manufacturer/distributor achieves a monopoly. It isn't pretty.
Chuck (Modeling Central Japan in September, 1964)
The only thing that this all tells me is that once you surrender the means of production to a foreign country, you are thereafter held hostage.
The solution is to return to our roots and bring production back to the United States and employ American workers once again.
Rich
Alton Junction
richhotrain The only thing that this all tells me is that once you surrender the means of production to a foreign country, you are thereafter held hostage. The solution is to return to our roots and bring production back to the United States and employ American workers once again. Rich
But how much of a price hike do we get with that? Or maybe we go back to our scratch building roots.
I'm glad that I have enough stuff to keep me going for years.
Paul
Interesting read and very significant!
We can support US production, very simply by buying from Accurail, Bowser and other kit manufacturers! Learn that it isn't hard at all to build model kits as opposed to buying RTR!
NP 2626 "Northern Pacific, really terrific"
Northern Pacific Railway Historical Association: http://www.nprha.org/
After many years, in which outsourcing a production to foreign (mainly Asian9 countries was the name of the game, we will have to learn, that "back-sourcing" is the way to stay in a market. I know of a number of companies in Germany, who already went this way, not only for reasons of quality, but availability. People here are not prepared to wait for months and years for what finally is a toy (even if we don´t like that name)!
NP2626 Interesting read and very significant! We can support US production, very simply by buying from Accurail, Bowser and other kit manufacturers! Learn that it isn't hard at all to build model kits as opposed to buying RTR!
I beleive Bowser's latest diesel offerings were made in China too.
Bob Boudreau
CANADA
Visit my model railroad photography website: http://sites.google.com/site/railphotog/
IRONROOSTER richhotrain: The only thing that this all tells me is that once you surrender the means of production to a foreign country, you are thereafter held hostage. The solution is to return to our roots and bring production back to the United States and employ American workers once again. Rich But how much of a price hike do we get with that? Or maybe we go back to our scratch building roots.
richhotrain: The only thing that this all tells me is that once you surrender the means of production to a foreign country, you are thereafter held hostage. The solution is to return to our roots and bring production back to the United States and employ American workers once again. Rich
Acoording to that letter, product won't even be available for some period of time into the indefinite future. So, the real question is whether we will be paying anything at all.
If it were made in the U.S. at least it would be available even if we had to pay more.
And, I am not convinced that we would have to pay more.
The original reasons for shipping the means of production overseas are long gone now and forgotten.
Hi!
Where are today's "Irv Athearns"???
There is a lot to be said in having a US made loco or car. The folks putting them together will know at least something about American (and Canadian) railroads, and be able to read the signage and recognize errors that have escaped the non English speaking folks.
And the other issue is the acquisition of after sale service and parts........... For decades you could write Athearn in California and get pretty much whatever you needed - and they knew what you were talking about. In example, think of Rapido's production of "Central Illinois" baggage cars..................
Will American models cost more? Well sure they will. But if they produce a quality product, we will buy more, and with higher production, prices can and likely will fall.
I would much rather pay a premium for something made in the USA (North America) than for something made on another continent...........
For what its worth..................
ENJOY !
Mobilman44
Living in southeast Texas, formerly modeling the "postwar" Santa Fe and Illinois Central
Capitalism at work, the guys who own Bachmann suck everyone into their production facility.Then tell the competitors to find somewhere else to make their competitive product.Ahh, capitalism, Darwinism at it's best. Survival of the fittest.Harold
Railphotog NP2626: Interesting read and very significant! We can support US production, very simply by buying from Accurail, Bowser and other kit manufacturers! Learn that it isn't hard at all to build model kits as opposed to buying RTR! I beleive Bowser's latest diesel offerings were made in China too.
NP2626: Interesting read and very significant! We can support US production, very simply by buying from Accurail, Bowser and other kit manufacturers! Learn that it isn't hard at all to build model kits as opposed to buying RTR!
Bowser diesels are made in China. Bowser cars are made in the US.
Where are they going to manufacture anything in the US?The US manufacturing base was gutted in the '90's by "vulture" capitalism, all the "moneychangers in the Temple".I was in the injection molding business in the '90's when it was leaving, that is all gone now.Harold
hminky Where are they going to manufacture anything in the US?
Where are they going to manufacture anything in the US?
Where?
Or, when?
It says "Made in China" on the box of my Bowser Executive Line ARR F7A.
I too have run into the new order on my layout. I use a lot of grain cars, modeling Oklahoma and the Santa Fe in the late 1980's. Two brands (cars) have dominated my purchasing, ExactRail and Intermountain. I purchased over a period of time the ExactRail covered hoppers I wanted, then recently started on Intermountain. I had some of their cars but wanted more. I was able to pick up a few here and there but in time I have cleaned out the best two sources I knew of for those cars and in emailing and calling around, cannot find any more of the IM cars I was buying execept for 4 which I grabbed immediately.
Now I can operate and get by with what I already have, but it disturbs me to see the source of the cars dried up. In an email to them, they told me no plans to offer another run of the cars. So another really fine car will become extinct, maybe for a short time, maybe never.
But I have been in the hobby long enough to have aquired a large inventory of what I wanted (needed) so the operating sessions will continue and life will be good, at least for now.
Bob
I for one would like to know from whom CMT recieved the purported E-Mail spelling out all of the doom and gloom.
It is very conusing after reading the OP's post that Bachmann has sewed up for all intents and purpose all of model train production when CMT (the OP) released this news bulletin on their very own web site.
NEWSFLASH - July 10/12 CMT is changing from a dealer of many manufacturers into a supplier/manufacturer of its own products. This is an exciting time for us. As a result, we are making many changes to our operations. Due to the time commitment to do this, we are running behind in answering emails. Do not be alarmed.
Perhaps the OP would explain this.
Don't Ever Give Up
Bachmann trains have generally been quite available, even if not directly "in stock" at a supplier and only "available". Others have had the production troubles, promising then nto delivering or delivering years late. Perhaps now we know why. BAchamnn does tend to manufacture to put on the shelves.
The underdog is emerging ahead of the leaders of the pack and succeeding?.
I personally have no problems with my Bachmann locos {14 of them} and have yet to need to resort to the "great Bachmann Service Departement" I hear tell good things about. Bachamnn DOESN't necesssarily have to "build the better mousetrap", it just has to put all others out of business!
If you don't like Bachmann, then you may be stuck. Maybe you shoud try a Bachmann?
The auto industry ate itself up time after time to a few manufacturers for US Automobiles. Then came the foreigners and now the US auto industry fights to hold on.
I will happily continue to aquire Bachmann DCC OnBoard locos as funds and wants/needs allow.
If you all think bringing model RRing manufacturing BACK TO THE USA would help, perhaps you can all get together and pool your money and build a bigger/better plant to manufacture all the locos you desire! Put your money where your mouth is, so to speak. If you don't, you have no reason to complain about lateness, non-production, or "Bachmann taking over".
"Try a Kia, Buy a Kia" was a slogan for the Kia dealers. Maybe "try a Bachmann, Buy a Bachmann" will work too!
-G .
Just my thoughts, ideas, opinions and experiences. Others may vary.
HO and N Scale.
After long and careful thought, they have convinced me. I have come to the conclusion that they are right. The aliens did it.
I started stockpiling three years ago, saw this coming. Didn't take much to connect the dots.
I even bought a bundle of code55 n scale track as an investment, has went up $50 bucks October 2010.
Harold
Harold drives home an important point. The injection molding industry was the first to be set to Mexico and Asia. There is still a lot of equipment available, but very little available capital to fund a new production facility. Compound that problem with few "craftsmen" able to build new tooling at any cost. Many of the Asian manufacturers own the tooling that produces the models. I've been in the tool & die business since 1965, and it ain't what it used to be! Can it come back? I certainly hope so. .
galaxy If you don't like Bachmann, then you may be stuck. Maybe you shoud try a Bachmann? Maybe "try a Bachmann, Buy a Bachmann" will work too!
Maybe "try a Bachmann, Buy a Bachmann" will work too!
Sheldon?
superbe I for one would like to know from whom CMT recieved the purported E-Mail spelling out all of the doom and gloom. It is very conusing after reading the OP's post that Bachmann has sewed up for all intents and purpose all of model train production when CMT (the OP) released this news bulletin on their very own web site. NEWSFLASH - July 10/12 CMT is changing from a dealer of many manufacturers into a supplier/manufacturer of its own products. This is an exciting time for us. As a result, we are making many changes to our operations. Due to the time commitment to do this, we are running behind in answering emails. Do not be alarmed. Perhaps the OP would explain this. Bob
Bob, I am the OP. CMT (Canadian Model Trains) did not receive the email. They wrote it. They sent it to me and I posted it here for you.
The CMT News Flash should not confuse you.Their email laid out the problem: a competitor has tied up the Chinese manufacturing for themselves. The News Flash is CMT's response to the situation. They are going to manufacture their own products.
We should applaud CMT and hope for their success. Who knows, maybe one day CMT will be the supplier for other brands and we will find our models made in Canada (or wherever CMT builds its factory).
Tim
Milepost 266.2 Railphotog: NP2626: Interesting read and very significant! We can support US production, very simply by buying from Accurail, Bowser and other kit manufacturers! Learn that it isn't hard at all to build model kits as opposed to buying RTR! I beleive Bowser's latest diesel offerings were made in China too. Bowser diesels are made in China. Bowser cars are made in the US.
Railphotog: NP2626: Interesting read and very significant! We can support US production, very simply by buying from Accurail, Bowser and other kit manufacturers! Learn that it isn't hard at all to build model kits as opposed to buying RTR! I beleive Bowser's latest diesel offerings were made in China too.
Everything from Bowser is made in China now, even the Cal-Scale parts, I just received another RS-32/36 detail set made in China and the price jumped from 14.95 to 19.95.
Botchmann is still Botchmann!
Stop calling Athearn, Atlas, Bowser , Walthers and others manufacturer's they are importers and most of the time due to the new order policies they don't even have anything in their warehouses (if they even have one). Accurail is a manufacturer they make everything here in the USA.
Most of ExactRail and Intermountain's stuff is molded in the USA and shipped to China for assembly.
Rick J
Rule 1: This is my railroad.
Rule 2: I make the rules.
Rule 3: Illuminating discussion of prototype history, equipment and operating practices is always welcome, but in the event of visitor-perceived anacronisms, detail descrepancies or operating errors, consult RULE 1!
If it were just the assembly line or the injection molding machinery, moving production back would be fairly easy. Chinese business practice and loss of the supporting infrastructure in the US make the reality of moving production back to the US very difficult.
Notice that the letter addressed that model train manufacturing - especially locomotives - is a complex undertaking. The original reason for production moving overseas was the cost of cutting dies. The difference in assembly costs alone didn't push production out. But a difference in die costs of $20+ per locomotive on a run of 5,000 units is significant. Then add the sourcing of supporting parts that have to be ordered - motors, gears, shafts, flywheels, wheels, and so on. These are generally not produced in the US anymore, either - especially in numbers that are not large scale production but beyond basement manufacturing.
Getting paint masks made and spearately applied metal or plastic detail partes is another infrastructure issue. I know the basement manufacturers here in the US struggle to locate sources of supply for trucks, detail castings, and decals for their kits (not every basement manufacturer wants to produce his own AB brake system or windows or trucks)
Bottom line is that returning production to the US involves reviving a whole infrastructure of specialty suppliers who can produce economically in the desired quantities - not just opening an assembly factory.
just my thoughts
Fred W
I was suggesting Bowser Kits, in which case their website clearly states they are made in the USA! If this is a false statement on Bowser's part, I have no way of knowing and until someone proves otherwise, I will take Bowser's word for it.
I'm curious about the math. If, in fact, there is only one "A" factory and it's 10 x larger than the three "B" factories, does this mean that Bachmann is going to use all of the capacity of the sole "A" factory?
It also seems odd to me that in the manufacturing capacity of China there is only one "A" size factory.
[quote user="tpatrick"]
superbe: Bob, I am the OP. CMT (Canadian Model Trains) did not receive the email. They wrote it. They sent it to me and I posted it here for you.
tpatrick,
I'm have a hard time believing that Bachmann was able to tie up all of the production capabilities in China and has a monopoly on new train production.
No disrespect to CMT but I'd be more impressed if this information came from the likes of Walthers, Horizon, and Model Train Stuff. In fact if this is true I would have expected for MR Magazine to have commented.
I hope CMT can get a production facility up and running. It would be good for model railroading and I wish them all the luck they can get.
superbe I'm have a hard time believing that Bachmann was able to tie up all of the production capabilities in China and has a monopoly on new train production. No disrespect to CMT but I'd be more impressed if this information came from the likes of Walthers, Horizon, and Model Train Stuff. In fact if this is true I would have expected for MR Magazine to have commented.
If you pull together all the information out there, the picture becomes a little clearer. CMT was avoiding naming names in the e-mail. Bachmann is owned by Kader, which also owns the largest mr manufacturing plant in China. Sanda Kan (spelling?) was the second biggest manufacturer, and was the contract shop for many of the bigger importers. Sanda Kan over-committed their facilities, causing many delivery delays, and had other problems. Sanda Kan was bought by Kader. Kader sent letters to many importers - not all, but most of the smaller ones - that had been using Sanda Kan telling them to find another source for their production. And so the scramble for production facilities and supplier infrastructure has been on for the past year or two.
So Bachmann has a lock for Chinese production time. Blackstone/Soundtraxx appears to be pretty high on the list for Kader facilities due to being the supplier of Tsunami decoders, as well as buying Blackstone production. Being in HOn3 with little competition, Blackstone can get and pay higher prices. Atlas is trying to set up alternatives to Kader, as witnessed by their track production issues earlier this year.
Like it or not, it takes experience and practice to get model locomotive production up to reasonable quality standards (cracked gears, over-oiled models, anyone?). Model train production is not generally first on the list of investors looking for decent returns - it's not known for high profits or low risks. If it was easy any of us could do it. But it sure sounds easy listening to the forums.
Bachmann purchased the factory well over 2 years ago.
But don't blame Bachmann for the shortage. You don't buy a large factory and then idle a very large percentage of it. That cost you way too much money.
I heard what the real problem is, and it's not really Bachmann's fault. I would say more, but it's 2nd hand hearsay from an insider and that would irresponsible for me to repeat it as it could affect the company's business.
Don - Specializing in layout DC->DCC conversions
Modeling C&O transition era and steel industries There's Nothing Like Big Steam!