Well, with the tariff situation, this thread could get political. I hope it doesn't go ther.
Any thought Atlas might relocate to USA, or is the closure specific to that one particular factory?
- Douglas
We don't know if it's political, only coincidental. Shinohara closed before the tariffs. Do we know if everyone uses the same factory, Rapido, Bachman Intermountain and all the rest?
Average factory wage in China is $850/mo, that works out to less than 5.50 an hour, assuming they only work 40/week. I don't see a move to the US happening.
Henry
COB Potomac & Northern
Shenandoah Valley
Average factory wage. Do you think train assembly is more or less skilled than average? In some sense, I could see it being more skilled with the tedious nature of the parts and paint being applied these days.
One article I read was the factory closure was collateral damage from the current environmental rampage China is on to clean up their situation and to meet global agreements.
Rapido opened their own factory.
Brent
"All of the world's problems are the result of the difference between how we think and how the world works."
Doughless Average factory wage. Do you think train assembly is more or less skilled than average? In some sense, I could see it being more skilled with the tedious nature of the parts and paint being applied these days.
Rapido has videos showing the manufacturing process in their factories. Definitely an unskilled labour operation.
Funny this thread appears. A few weeks ago, MB Klein told me that their supplier for turnouts is delaying shipment. Perhaps the two issues are related.
Pls avoid the political discussion to avoid this thread getting blocked.
It was being discussed for a few days in the MRH forums but it got off track and locked. Kind of typical for some of the male species.
Not sure the discussion is still there.
Rich
If you ever fall over in public, pick yourself up and say “sorry it’s been a while since I inhabited a body.” And just walk away.
I wonder if Jason/Rapido could see this as an oppourtunity to pick up some of the manufacturing slack. This is done in industry all the time with a company manufacturing parts/products for a competitor.
Jason certainly has the knowledge as far as the MRR industry goes and if he could manage plant expansion without incurring a lot of cost in the process, he could do well.
richg1998 It was being discussed for a few days in the MRH forums but it got off track and locked. Kind of typical for some of the male species. Not sure the discussion is still there. Rich
It did not take long. Another discussion stared up. lol
BATMANAverage factory wage.
BATMANRapido has videos showing the manufacturing process in their factories. Definitely an unskilled labour operation.
The figure I quotes was from a google search for the average wage for an Apple phone factory worker. They assemble very small parts into an Iphone or MAC or Ipad.
I saw the same Rapido video. It may not require a high level of education, but it does require craftsman-like dexterity. David Popp and I wouldn't make it one day, gluing grab irons on HO boxcars in China.
kasskaboosepolitical discussion to avoid this thread getting blocked
Russell
Well, technically I think political editorializing is what should be avoided.
I'm sure politics here and in China are at least partially driving the closure, I at least hope so. If not for politics, then its the market that's driving it.
I'm hopeful that we can get to some idea about what the possible impact of the politics has on the situation, how it will be resolved and when, etc. without commenting on the merits of the politics themselves.
The problem is purely environmental - has nothing to do with politics / tariffs ....
linkhttps://www.smartchinasourcing.com/chinas-new-environmental-regulations-can-impact-procurement-program/
So far, it has been announced by Atlas, Intermountain, Fox Valley Models and Bowser that they are affected. There are others, but I will let them announce it themselves.
Those not affected are Athearn, Walthers, Scale Trains, Bachmann and Rapido. Jason from Rapido has already posted that he apparently is willing to help where he can.
Mark.
¡ uʍop ǝpısdn sı ǝɹnʇɐuƃıs ʎɯ 'dlǝɥ
DoughlessI'm sure politics here and in China are at least partially driving the closure, I at least hope so. If not for politics, then its the market that's driving it.
I don't see that China not buying soybeans begins to be on a par with not selling model trains to the US. It they shut down the Iphone and HP, and Apple, Dell computer factories, that would be a statement.
At any rate we aren't going to know that, unless someone writes an news story to that effect. News isn't what it used to be, so we still won't know.
Mark R.The problem is purely environmental - has nothing to do with politics / tariffs .... linkhttps://www.smartchinasourcing.com/chinas-new-environmental-regulations-can-impact-procurement-program/
Now that makes sense. I watch CNBC World and they have reports from China and the air there and in Hong Kong is filthy.
Mark R. The problem is purely environmental - has nothing to do with politics / tariffs .... linkhttps://www.smartchinasourcing.com/chinas-new-environmental-regulations-can-impact-procurement-program/ So far, it has been announced by Atlas, Intermountain, Fox Valley Models and Bowser that they are affected. There are others, but I will let them announce it themselves. Those not affected are Athearn, Walthers, Scale Trains, Bachmann and Rapido. Jason from Rapido has already posted that he apparently is willing to help where he can. Mark.
Ok. So some of the factors that made China attractive from a manufacturing standpoint might begin to wane. Hopefully any plant that meets the current regulations in China is new and efficient and can hold prices down.
The Chinese government has taken a rather vigorous stand on environmental issues in the past two years and I am not at all surprized by the closure of a manufacturing resource. It won´t be the last one.
I visited China in 2008 and was shocked by the amount of pollution. The air was almost too thick to breathe and I developed respiratory problems which made me leave ahead of schedule.
DoughlessHopefully any plant that meets the current regulations in China is new and efficient and can hold prices down.
That´s wishful thinking, but I doubt that this will be the case. China is finally "growing up" to western standards, both in wages and environmental protection issues. The goldrush days are over and there are European manufacturers who already have transfered their production back to Europe.
Happy times!
Ulrich (aka The Tin Man)
"You´re never too old for a happy childhood!"
DoughlessOk. So some of the factors that made China attractive from a manufacturing standpoint might begin to wane. Hopefully any plant that meets the current regulations in China is new and efficient and can hold prices down.
My cousin is one of the top dogs at one of the worlds major pharmaceutical companies. A lot of their products have been manufactured in China for years, worth billions to the Chinese economy. China stood to lose this business due to not meeting global environmental agreements. The writing was/is on the wall. Clean up or your customers will clear out.
This info has been discussed in financial publications since the Paris accord was signed. Very significant to those that have retirement or other portfolios.
Maybe some financial magazines along with Model Railroader should be put in the reading room.
After reading posts on several forums concerning this situation, the cause appears to be stricter environmental standards being enforced by the China's government on factories and not due to tarriffs, or trade wars. China has horrible problems with pollution and their people are beginning to have all types of health issues.
This situation has affected several companies as noted and will defintely impact the hobby for the coming years. I honestly rather have limited items available that are produced in facilities safe for the workers and areas surrounding the factory. Let's face it, we love to proclaim that we all support fair wages and working conditions until it impacts something we want at a cheap price. The US had some factories with horrible conditions a little over 100 years ago such as the Triangle Shirt Factory where hundreds died in a fire. China is finally trying to protect their people and environment.
Lets just enjoy what we have and be patient waiting for new items.
Tinplate ToddlerChina is finally "growing up" to western standards, both in wages and environmental protection issues. The goldrush days are over and there are European manufacturers who already have transfered their production back to Europe.
China has arrived and it is only because of the great wealth they have gained over a relatively short few decades that affords them the ability to change their environmental policies. And so it should go for other countries around the globe as more countries are included in trade agreements.
If anyone has a sub on TrainOrders, apparently Jason had commented on the cause of the closure. My sub expired so I am unable to read what he said but it may have nothing to do with environmental concerns. The truth is out there.
Rio Grande. The Action Road - Focus 1977-1983
I think it is also on Rapidos Facebook page.
ExactRail products were also being made at the factory which closed; but they seem to handling it with a good sense of humor (the faux-image of Chris Brimley throwing his desk and punching a wall as he humorously described is pretty funny in my mind). Their tongue is firmly planted in cheek here: https://exactrail.com/blogs/announcements/now-for-some-bad-newsIf anything... it sounds like most of the companies will just be experiencing a hiccup while they transfer the molds and tooling from the closed factory to new ones. Then buisness as usual!
The FB page says that a major model train factory in China has closed and it has affected many model train companies in North America and Europe.
It also says the Rapido plant will expand in anticipation of getting many new customers.
xboxtravis7992 ExactRail products were also being made at the factory which closed; but they seem to handling it with a good sense of humor (the faux-image of Chris Brimley throwing his desk and punching a wall as he humorously described is pretty funny in my mind). Their tongue is firmly planted in cheek here: https://exactrail.com/blogs/announcements/now-for-some-bad-newsIf anything... it sounds like most of the companies will just be experiencing a hiccup while they transfer the molds and tooling from the closed factory to new ones. Then buisness as usual!
This "hiccup" could last anywhere from six months to a year. Those molds are not accessible by the companies that own them. When the Chinese government closes a plant, EVERYthing in that plant is considered to be an asset of that company. Nobody can remove anything.
At least Atlas and Bowser are still in business...
BATMANI think it is also on Rapidos Facebook page.
"As many of you have heard, a major model train factory in China just closed. This has affected many model train companies in North America and Europe. Thankfully, it has not affected Rapido.
"Rapido's two factories are still very much in business, and they are expanding to meet the expected influx of new customers. NP boxcars and N scale 8600 coaches are leaving the factory next week, and TurboTrains will follow at the end of August."
Bowser has a line of RS-3's that were supposed to be out at the end of 2017 and then the end of 2018. If their molds are really locked up in a factory, that is a big hurt on them.
BigDaddyBowser has a line of RS-3's that were supposed to be out at the end of 2017 and then the end of 2018. If their molds are really locked up in a factory, that is a big hurt on them.
It is my understanding that the tooling, molding and development work on the RS-3 is being done in Pennsylvania. Assembly and painting may be another issue.
http://www.bowser-trains.com/docs/RS/Bowser%20RS3%20Project%20PRR%20Historical%20Society.pdf
Cheers! Ed
Tinplate Toddler there are European manufacturers who already have transfered their production back to Europe.
.
I heard Games Workshop was one of the first to move their Chinese manufacturing back to the UK.
-Kevin
Living the dream.
It might be possible for some types of businesses to move back from China. Jason Schron of Rapido has discussed a number of times how he envisions model train manufacturing brought back to north America. In a nut shell, be prepared to pay around two to three times the price for trains. Of course people almost always bring up Kadee and Jason has explanations for that as well from his perspective as a model train company.
We will survive! It would take years for LHS or online sellers to be totally depleted of goods! Let's take one day at a time. Right now, I have two thirds of my collection in boxes and over 100 BB kits not even built. If I would rotate all of my freight cars every quarter, it would take me two years to do a rotation!
Breathe, grab your throttle and run your trains. Let the factories do what they have to do and then they will tell us and let's not become train stock brokers and specualte on things we don't have 1000% knowledge on.
Now, anyone have any PS-2 covered hoppers in Cemex they want to get rid of?
Neal
Oh yeah, it isn't like there is a shortage of trains out there. It would more be a matter of getting specific items that fit a modeling focus that could be more challenging. But if you don't care what you are running, lots of trains.
Exactrail already commented that they are in the process of moving forward with another factory and Jason may be expanding capacity of his factories to help accomodate. Apparently Intermountain was the biggest producer at the closed factory so they may take longer to get caught up than some with smaller production.
Would love to grab my throttle and run trains but I'm between layouts but am making cunning plans to get the basement finished toward that end. Forty sheets of drywall were delivered last Saturday - 1st need to get outlets installed and then get a contractor to do the dry wall which will be painted sky blue.
riogrande5761In a nut shell, be prepared to pay around two to three times the price for trains.
I think this is not only slightly exaggerated. Chinese manufacturers have been asking good money lately, in fact, the their prices made it feasible for some manufacturers in Europe to relocate their production into the European Union and cxountries, in which the average wage is not that much higher, but the cost of quality control, communication and logistics are actually lower.
Tinplate Toddler riogrande5761 In a nut shell, be prepared to pay around two to three times the price for trains. I think this is not only slightly exaggerated. Chinese manufacturers have been asking good money lately, in fact, the their prices made it feasible for some manufacturers in Europe to relocate their production into the European Union and cxountries, in which the average wage is not that much higher, but the cost of quality control, communication and logistics are actually lower.
In a nut shell, be prepared to pay around two to three times the price for trains.
Ulrich, Don't shoot the messenger, these kinds of figures are what Rapido has mentioned on a number of occasions. It has also been reported that the iPhone would be similarly 2 to 3 x more expensive if made in the US.
Anyway, if what you say is true, why aren't all the model train companies moving back over to the US what with all the issues they have been experiencing over the past 10 years? If it weren't so costly and affect product prices, it woudl be a no brainer right? But it isn't happening probably because they know the prices they would be charging would be beyond what most would be willing to pay. People already complain about the high cost of model train products. I've read quotes putting iPhones made in north America at $2k or more, which is 2x the current cost made in China.
There is a 3 year old article which may be an interesting read:
https://thebusinessofmodels.wordpress.com/2015/03/27/hornby-paid-0-5m-to-end-its-chinese-supplier-misery/
"Our industry is currently tied to Chinese production, as southern China has developed the special skill set required to produce model trains. Bringing the manufacturing back to North America would cost even more due to very high start up costs and higher overhead"
My well-placed source says Wheels of Time, Con Cor "and several others" are also affected - to what degree I do not know. He also said don't look for many new product announcements to come out of this November's Trainfest.
Dave Nelson
I wonder if this is actually "factories" or just one factory? It's not unusual for several US/western companies to all have products made by the same company in Asia. My understanding is there are several US musical instrument manufacturers who all use the same company in South Korea to make their guitars and basses for example, even though the end products are sold under competing brand names.
riogrande5761 Tinplate Toddler riogrande5761 In a nut shell, be prepared to pay around two to three times the price for trains. I think this is not only slightly exaggerated. Chinese manufacturers have been asking good money lately, in fact, the their prices made it feasible for some manufacturers in Europe to relocate their production into the European Union and cxountries, in which the average wage is not that much higher, but the cost of quality control, communication and logistics are actually lower. Ulrich, Don't shoot the messenger, these kinds of figures are what Rapido has mentioned on a number of occasions. It has also been reported that the iPhone would be similarly 2 to 3 x more expensive if made in the US. Anyway, if what you say is true, why aren't all the model train companies moving back over to the US what with all the issues they have been experiencing over the past 10 years?
Anyway, if what you say is true, why aren't all the model train companies moving back over to the US what with all the issues they have been experiencing over the past 10 years?
What Ulrich said is true for Europe as we have some lower wage countries like Rumania, Hungary and a few more eastern European countries nearby.Regards, Volker
I went through the initial US tarrif list when it was first published and concluded that it did not include model trains. And remember that a tarrif is paid by the buyer, not the seller, so a factory would only close after sales volumes had dropped below economic volumes, which would be some way downstream, unless US brands were cancelling orders in anticipation. The language from Atlas and Bowser is about delay, not cancellation. Here's hoping that the InterMountain GP10 + 16 are not affected, as i am waiting for a couple of those that have been promised for a while!!!!!
Bill.
riogrande5761Anyway, if what you say is true, why aren't all the model train companies moving back over to the US what with all the issues they have been experiencing over the past 10 years?
Well, as a matter of fact, it is true. For instance, Piko´s Hobby line of products was made in China and has been moved back to Germany. Piko still manufactures their G scale range of products, but in a factory owned and run by them. Other than than the US brands, Roco, Fleischmann, Marklin, Trix, Bemo and others never gave up manufacturing in Europe, although wages are much higher than in the US or China.
VOLKER LANDWEHRWhat Ulrich said is true for Europe as we have some lower wage countries like Rumania, Hungary and a few more eastern European countries nearby. Regards, Volker
Model trains are still being manufactured in high wage countries like Austria, Germany and even Norway and Sweden.
wjstix I wonder if this is actually "factories" or just one factory? It's not unusual for several US/western companies to all have products made by the same company in Asia. My understanding is there are several US musical instrument manufacturers who all use the same company in South Korea to make their guitars and basses for example, even though the end products are sold under competing brand names.
IIRC, a few years ago Bachmann bought a big factory where a lot of companies were building their trains. Then they all had to scramble to find new factories, or factory.
I wonder if this factory in question is the one that received a lot of the Bachmann expulsions.
You can add Intermountain to that list.
https://www.intermountain-railway.com/
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
Tinplate Toddler Other than than the US brands, Roco, Fleischmann, Marklin, Trix, Bemo and others never gave up manufacturing in Europe, although wages are much higher than in the US or China.
Well, higher than China anyway. I don't think European wages are higher than US wages for the same type of job....particularly if you look at take-home pay, since our taxes are lower.
Tinplate Toddler riogrande5761 Anyway, if what you say is true, why aren't all the model train companies moving back over to the US what with all the issues they have been experiencing over the past 10 years? Well, as a matter of fact, it is true. For instance, Piko´s Hobby line of products was made in China and has been moved back to Germany. Piko still manufactures their G scale range of products, but in a factory owned and run by them. Other than than the US brands, Roco, Fleischmann, Marklin, Trix, Bemo and others never gave up manufacturing in Europe, although wages are much higher than in the US or China.
riogrande5761 Anyway, if what you say is true, why aren't all the model train companies moving back over to the US what with all the issues they have been experiencing over the past 10 years?
Ulrich, I'm talking about IMRC, ExactRail, Wheels of Time, Trainworks, Atlas etc. - US brands. Those other brands (Jedi hand-wave) those are not my droids. That's all fine and dandy but no good to me.
So again, why aren't they moving back to north America to manufacture trains here in the good ol US of A or Canada?
riogrande5761So again, why aren't they moving back to north America to manufacture trains here in the good ol US of A or Canada?
Costs? Here is an interview Jason Shron gave in August 2012: http://cprailmmsub.blogspot.com/2012/08/china-and-model-railroad-manufacturing.html
Summery: A Rapido VIA Park car would have cost the customer about CAN $400 calculated with non-union wages at that time. Today it would cost even more but the difference to the Made in Chine price would be smaller. China's wages are rising faster than in the USA or Canada.
Would you be willing to pay CAN $400+ for a plastic passenger car? It might be an extreme example but the direction is right.Regards, Volker
If Jason were correct, then any manufacturing in the US or Canada would not make any sense at all.
Compared to Germany, US or Canadian wages are bargains, but how can a business like Bemo design a passenger car, make the tooling, manufacture and assemble it and sell it for Euro 80 and still make a profit on it?
There is not an easy answer to that, but effective design and efficiency are possible answers.
wjstix.particularly if you look at take-home pay, since our taxes are lower.
https://tradingeconomics.com/country-list/personal-income-tax-rate
Plus most if not all of these countries have excellent free health care, education and a long list of safetynet/compassionate benefits that make for a relatively stress free quality of life.
So take all that into account when chewing on the numbers.
Tinplate Toddler VOLKER LANDWEHR What Ulrich said is true for Europe as we have some lower wage countries like Rumania, Hungary and a few more eastern European countries nearby. Regards, Volker Model trains are still being manufactured in high wage countries like Austria, Germany and even Norway and Sweden.
VOLKER LANDWEHR What Ulrich said is true for Europe as we have some lower wage countries like Rumania, Hungary and a few more eastern European countries nearby. Regards, Volker
It has always been a mix for the German companies, Germany and China.
Now Roco/Fleischmann have 100 people in production in Germany, 240 in Slovakia, 220 in Romania. The last two are European low wage countries.
Marklin/Trix still have 150 people in production in Germany, but 650 in Hungary with much lower wages than Germany.
With outsourcing into these countries they can avoid China but the work is not back in Germany.Regards, Volker
wjstixI don't think European wages are higher than US wages for the same type of job....particularly if you look at take-home pay, since our taxes are lower.
I agree when we talk about Romania, Bulgaria, but not Germany, Austria, The Netherlands, France, Italy etc. Wages are about $20/hr,, but you have to add the same amount for the employer´s contribution to SS and NHS.
Tinplate Toddler If Jason were correct, then any manufacturing in the US or Canada would not make any sense at all.
Yes. I am basing my earlier comments on Jason who knows the model train industry from the inside out. I didn't have any links or quotes handy so Volker stepped with the goods. Thanks.
So was I slightly exaggerating earlier then about the increase in cost? No. CAN $400 for a plastic passenger car probably is 2 x or possibly more than manufacturing it in China. I stand by my original statement.
Perhaps Jason could explain the differences in US/Canada vs. Europe.
Personally, this topic affects me as a US or north American hobbyist and my favorite companies are affected by this closure. Suggestions by some that these companies (ExactRail, IMRC, Tangent, Trainworx, Fox Valley, Atlas, etc.) bring their manufacture back to the US are simply uninformed.
Europe, that must be a different beast and I have no idea if any model train companies which serve that market (European trains that is) were affected. If not, then it's kind of out-of-scope to this topic isn't it?
VOLKER LANDWEHRIt has always been a mix for the German companies, Germany and China.
I don´t think this statement is quite correct. Some manufaturers like Brawa (one of the most expensive brands) relies completely on Chinese manufacturing and assembling. Others like Roco/Fleischmann have moved resources to Vietnam and/or have factories within the EU.
Well, discussing European issues does not lead in the right direction. The question is what can be done to fill the gap the closure of that particular Chinese factory has created. Bringing the production back into the US is an option which should not easily be dismissed.
A corporation is a piece of paper in a drawer in some Government office somewhere. A corporation does not have a soul, nor does emotion come into play, nor should it when making decisions on the soundness of the corporation.
Corporate law dictates that the President/CEO/Top Dog/Big Banana, base his decisions on what will best benefit the shareholder(s) or the company. Now, the board of directors or shareholder(s) can steer the corporation in a particular direction as it sees fit. You will often see a corporation put on its social conscience hat and all of a sudden become let's say "environmentally conscious", don't be fooled they only do it as it is fiscally sound to do so. By law, the head cheese must make his decisions based on the mighty dollar. Of course, if that person is the only shareholder, they can do as they wish.
There are many third world countries left on the planet to pick up the slack as other countries price themselves out of the market. Eventually (not in my lifetime) all boats will float and sending aid around the world in the form of bags of grain will end as economies develop.
Tinplate Toddler The question is what can be done to fill the gap the closure of that particular Chinese factory has created.
What can be done? 1) do exactly what Jason has done, open your own factory that is yours. AFAIK, he has two. From what I understand, Athearn did something similar after being burned about 9 years ago. 2) find space in another factory already going - Athearn did that when their factory shut down - moved the RTR stuff to the factory making Genesis products. Jason may be able to expand capacity at one or both of his factories to fill the gap for some of these companies.
Bringing the production back into the US is an option which should not easily be dismissed.
I think Jason would have a strong financial argument against that which Volker already commented on. But again, you'll have to take that up with Jason. *shrugs* The take-away is that the cost US hobbyists would have to pay would be so excessive, it would be a deal breaker for 90% of us. Thats why it is easily dismissed.
Will somebody explain to me how the Chinese Government can "hold the tooling" and point me in the direction of somewhere I can read about it?
Somebody owns the tooling and there have to be agreements in place regarding that. My eyes are bleeding from trying to find out about this. I tend to read business publications so I can maintain my standard of living and I have not seen anything about tooling being held hostage.
Speculation is not fact.
Tinplate ToddlerI don´t think this statement is quite correct. Some manufaturers like Brawa (one of the most expensive brands) relies completely on Chinese manufacturing and assembling.
I didn't strive 100% correctness. I just wanted to put into perspective your statement that some European companies never gave up production in Europe.
Tinplate Toddler Bringing the production back into the US is an option which should not easily be dismissed.
You are right if you are willing to pay twice to three times the current price or content with less detailed product kits, e.g. Accurail.
High detailed assembled locomotives, cars are waiting for roboters able to assemble them before returning.Regards, Volker
How does Kadee do it in Oregon, yet offer the same quality level as the stuff from China at almost the same price?
Tinplate ToddlerCompared to Germany, US or Canadian wages are bargains
When I was in Logistics for the Feds, we had my counterparts come from many countries all over the world to see how we did things. I had people from Switzerland, Germany and many other countries partnered with me for two weeks.
The Europeans made twice as much as I did, however, their housing cost were four times mine and I had a 5000 SQFT home and they lived in a 1500 SQFT apartment.
It is hard enough to argue apples and oranges but when neither has heard of a pear or a pineapple. Time go traveling.
azrail How does Kadee do it in Oregon, yet offer the same quality level as the stuff from China at almost the same price?
The was a thread about kit manufacturers on MR forums in September 2017:http://cs.trains.com/mrr/f/88/t/264946.aspx
riogrande5761 cited Jason Shron from another forum:
It's quite simple how they do it. Kadee sells thousands of couplers at a wonderful markup - we all dream of markups like that. They are able to subsidize their gorgeous freight cars with that coupler markup. (And Kadee freight cars really are gorgeous.) Same goes for Micro-Trains. That's why those two companies can do production in North America. If Rapido was selling millions of widgets for $1 each that only cost us $0.05 to make, we could use that extra profit to subsidize North American production or to bring down the prices of overseas-produced models enormously. If there is a company that can either do RTR production in North America or they can produce RTR models in China at a hugely lower price than everyone else, then there is always a real economic reason behind it, such as cross subsidization (discussed above) or selling a loss leader for the purpose of market penetration. That means "I want my model in every store so I will not make any money on the project but at the end I will be in every store." Seeing a handful of companies producing models onshore or cheaply does not mean that all of the other companies are gouging the customer or that we could really make models much cheaper if we wanted to. There are even projects Rapido has cancelled after they were fully designed because we realized that in order for them to make profit we would price ourselves out of the market. We have one freight car that would have retailed for $60 in 2013, which was way too high for a car that small. It had about a million extra parts. We had to shelve it. Maybe when other, similar freight cars get up to that price we can finally make it, because we can probably still make it for $60. -Jason
On the Kadee website https://kadee.com/htmbord/answer15-17.htmIs a short article (#118) “The Costs of Doing Business as a Manufacturer” Kadee complains about the ever rising minimum wages:In Oregon we have to deal with the mistaken politically correct mandatory minimum wage increases that seem to be the trend with politicians without any foresight looking for support and votes without any regard for the employer as to how they are going to pay a higher wage without an increase in income.
So I assume that they pay just minimum wages.Regards, Volker
BATMAN Will somebody explain to me how the Chinese Government can "hold the tooling" and point me in the direction of somewhere I can read about it? Somebody owns the tooling and there have to be agreements in place regarding that. My eyes are bleeding from trying to find out about this. I tend to read business publications so I can maintain my standard of living and I have not seen anything about tooling being held hostage. Speculation is not fact.
China is a communist country. The government owns everything.
Got this from Hogtrainz:
"URGENT NEWS!!! We have been informed that the factory producing trains for the following Manufacturers has closed. Although manufacturers are scrambling to set up shop in a new facility - massive delays and cancelations will be forthcoming."
SouthPennThe government owns everything.
Never been to China, but there are as many Chinese as US residents plus a billion more. If you consider how many barber shops, grocery stores, bars, restaurants, clothing stores and factories, how would any government manage that number of businesses?
Suprised it took so long for Kadee to be trotted out.
Jason has addressed Kadee as well here and on TO. Thanks Volker for reposting. This comes up pretty often and has to be re-addressed for the skeptics.
Most manufacturing is not coming back to the U.S. As near as I can tell, most model railroad companies manufacturing in the U.S. are more automated and require less human labor. Those products with lots of separate parts to install take more labor, cast on detail takes less. So Accrail produces here and others overseas. Accurail also paints their cars for a large variety of roads - this helps spread out tooling and other costs.
Prices in China are rising and will continue to rise as their standard of living goes up. This is part of the long term trend that started after WWII with cheap labor in Japan that disappeared as their standard of living went up, then it was Korea and Tawain, then China. Some stuff has already moved from China to Vietnam. But countries with cheap labor and stable governments/politics are dwindling. I think we should be prepared to see rising prices as a norm in the future, especially for the highly detailed products.
Paul
SouthPennChina is a communist country. The government owns everything.
The firm that closed was Affa Technology Ltd, a Hong Kong based company that supplied a variety of products to European and North American markets, including model trains. For the most part its products were outsourced to various factories located in coastal,mainland China. But Affa was a private, family-run company without any close ties to the Beijing government. Its closing was not due to the rising costs of production in China. Its principal owner and director, Kwok-Kit Ku, simply decided to retire, and given that none of his family were in a position to take over its leadership, he opted to shut it down. In other words, this closing was analogous to what happened here in the US with Jordan and Grandtline. Personal circumstances rather than politics (or economics) led to a shut down.
Nor was this closing in anyway similar to that of Sanda Kan, another Hong Kong supplier of model trains, back in 2008. That case arose through the efforts of a rival Hong Kong family firm named Kader to become a major global supplier of model trains. Kader's business model was to expand into the European and North American markets by buying up well known companies there to provide a cover under which it could penetrate without seeming to be Chinese owned. Bachmann Brothers of Philadelphia, which Kadar bought in 1984 (when Hong Kong was still a British colony), served as its principal cover under which it went on to acquire European firms like Liliput and Graham Farish.
Though its models were originally made in Hong Kong, as Kadar expanded its exports, it relocated production to the mainland Chinese city of Dongquan where it also began to produce toys for US firms like Hasbro and Mattel as well as electronic goods for Panasonic. Kadar's purchase of Sanda Kan was undertaken to eliminate not only a local rival, but to hinder US and UK firms supplied by Sanda Kan with which it was competing as Bachmann. So this prior closing was part of a concentration within the industry by a rival to reduce competition, not one due to non-profitability.
That is not to say that rising Chinese wages and environmental costs are not going to be a factor in the model industry in coming years. In Kadar's case, however, a more immediate problem is that it was purchased by J. P. Morgan, a global equity firm that has left it with high debt service as well as demands for bigger profits. So it is likely that we will see steep increases for detailed, high quality models made in China for a variety of reasons. And I suspect their production will follow the same trajectory as the brass models once produced in Japan: they will rise in price over the next decade until they cost more than the mass market will bear and—if still produced--become luxury goods only a few can afford. Efforts to slow the process may see production shifted elsewhere, as brass was to Korea; indeed, already Kadar has begun to develop factories in Thailand. But that will probably not halt the general trend. Of course, the perfection of 3D printing by then may totally revolutionize how models are produced and who produces them. All in all, we are probably entering a very new stage of the hobby.
Frank
Wonder if we all here will live without new model trains.
This just posted on their Facebook page:
Dear Caboose Customers,
As you may have recently heard, Affa Technology, the Chinese manufacturer for about a quarter of the US model railroad rolling stock market, ceased operations last Friday. What this means is that the manufacturers affected will be scrambling to find new production capacity for its current and future orders. These manufacturers include:
American Z Lines
Atlas (N scale rolling stock)
Bluford Shops
Bowser
ExactRail
Fox Valley
Intermountain Railway
Lionel
Wheels of Time
And perhaps others.
As of the current moment, these manufacturers intend to continue to honor existing pre-orders, although the delivery schedules will undoubtedly be lengthened. As specifics become available from these individual manufacturers, we will let you know.
We wish the absolute very best to our manufacturing partners as they seek to address this critical issue, and have the utmost confidence that they will do so successfully.
Thank you for your continued loyalty, our friends!
Kevin Ruble, Managing Member
Caboose Ltd.
"Uhh...I didn’t know it was 'impossible' I just made it work...sorry"
VOLKER LANDWEHRSo I assume that they pay just minimum wages.
Thanks for posting Jason's comments, I missed your post and went looking for it and couldn't find it.
You would be assuming a lot if you think a minimum wage increase only affects those making a minimum wage. A state raises the minimum wage from $7.25 to 10.25. The guy just hired, pushing a broom is now making the same a guy who has been there a couple years doing a more skilled job. He now wants $3 more an hour. Then the next guy who has been there longer, making $13 wants $16/hr. And so it goes, on up the chain. The business, whatever it is, now has a 40% increase in salary costs and no increase in sales.
Voyager The firm that closed was Affa Technology Ltd, a Hong Kong based company that supplied a variety of products to European and North American markets, including model trains. .... .... All in all, we are probably entering a very new stage of the hobby. Frank
The firm that closed was Affa Technology Ltd, a Hong Kong based company that supplied a variety of products to European and North American markets, including model trains. ....
.... All in all, we are probably entering a very new stage of the hobby.
Frank - Sent you a private message ....
deleted
Also affected is Spring Mills Depot.
It will be interesting to see where this whole thing goes.........
My opinions, I will keep to myself.
Sheldon
ATLANTIC CENTRALIt will be interesting to see where this whoke thing goes.........
Yes... this will be interesting to watch.
I hope few people have purchase plans disrupted too badly.
SeeYou190 ATLANTIC CENTRAL It will be interesting to see where this whoke thing goes......... . Yes... this will be interesting to watch. . I hope few people have purchase plans disrupted too badly. . -Kevin .
ATLANTIC CENTRAL It will be interesting to see where this whoke thing goes.........
I have most everything I want, and the few things left are generally already "out there".
But as someone who once worked in the industry, I am always watching where it is going.
BigDaddyYou would be assuming a lot if you think a minimum wage increase only affects those making a minimum wage. A state raises the minimum wage from $7.25 to 10.25. The guy just hired, pushing a broom is now making the same a guy who has been there a couple years doing a more skilled job. He now wants $3 more an hour.
I can't judge the American situation but as far as I know it hasn't happened in Germany. Why should the other guy get more when his productivity hasn't increased?
The minimum wage is a political wage uncoupled from any productivity considerations. Normal wages are coupled to productivity. Looks like our unions accepted the difference.Regards, Volker
I'm moving right now and my layout is in storage, so I'm not in the market for anything, although I worry about another disruptive track shortage once I start reconfiguring the layout.
Is this a permanent shutdown requiring everyone to make new arrangements? Or, will things return to normal in a few months?
It takes an iron man to play with a toy iron horse.
VOLKER LANDWEHR BigDaddy You would be assuming a lot if you think a minimum wage increase only affects those making a minimum wage. A state raises the minimum wage from $7.25 to 10.25. The guy just hired, pushing a broom is now making the same a guy who has been there a couple years doing a more skilled job. He now wants $3 more an hour. I can't judge the American situation but as far as I know it hasn't happened in Germany. Why should the other guy get more when his productivity hasn't increased? The minimum wage is a political wage uncoupled from any productivity considerations. Normal wages are coupled to productivity. Looks like our unions accepted the difference.Regards, Volker
BigDaddy You would be assuming a lot if you think a minimum wage increase only affects those making a minimum wage. A state raises the minimum wage from $7.25 to 10.25. The guy just hired, pushing a broom is now making the same a guy who has been there a couple years doing a more skilled job. He now wants $3 more an hour.
The argument made is that the guy at the low end didn't increase his either, so what did he do to get an increase?
Just some observations about the comments on speculation about where this hobby is headed.
It seems like labor, where ever it might be, could price itself out of the model train assembly market, since I don't know how many modelers will want to buy products that are three times current prices (if that would actually happen)
And that 3D printing will displace those workers. Whatever details can be made through the printing process might have to be the direction of the hobby. (if the hobby is driven by the desires of the volume buyer and not the "high-end" collector)
Is 3D printing good enough to make grab irons and stirrups and ladders as fine as are the separately applied pieces now? If not, we all may be settling for less detail in the future.
NittanyLionThe argument made is that the guy at the low end didn't increase his either, so what did he do to get an increase?
Here (Germany) are labor agreements with fixed terms. Negotiations of a new agreement will lead to increases of inflation rate +X, but not to a plus of 3 dollars.
If the employer doesn't honor labor agreements the worker is on his own and has to negotiate for himself. The results are usually worse than union wage increases.
A guy can ask for $3.00 per hour more because of the minimum wage increase, but will he get it? An employer might price himself out of the market if the wage increase isn't covered by a productivity increase or go bankrupt if he keeps his prices.Regards, Volker
Volker, there are different levels of minimum wages in Germany, depending on the trade. The absolute minimum wage, however, is € 8,84 per hour and this is legally binding to each employer. Any offense is subject to penal action, usually a fine.
Tinplate Toddler Volker, there are different levels of minimum wages in Germany, depending on the trade. The absolute minimum wage, however, is € 8,84 per hour and this is legally binding to each employer. Any offense is subject to penal action, usually a fine.
When I talked of minimum wage I meant the legally binding of €8.84 per hour. I thought it was clear in context of the discussion.
The other , trade depending wages, I would call the lowest wage group in a labor agreement.Regards, Volker
VOLKER LANDWEHRThe other , trade depending wages, I would call the lowest wage group in a labor agreement. Regards, Volker
Not correct Volker, these minum wages are outside of any labor agreement. But let´s stop that here, it is not contributing to the issue.
ACME Treni, an Italian manufacturer is also affected by the closure of Affa.
VOLKER LANDWEHR Tinplate Toddler Volker, there are different levels of minimum wages in Germany, depending on the trade. The absolute minimum wage, however, is € 8,84 per hour and this is legally binding to each employer. Any offense is subject to penal action, usually a fine. When I talked of minimum wage I meant the legally binding of €8.84 per hour. I thought it was clear in context of the discussion. The other , trade depending wages, I would call the lowest wage group in a labor agreement.Regards, Volker
At the risk of getting in trouble here:
In his book "The Wealth of Nations", in 1776, Adam Smith argued against any kind of wage or price controls suggesting they discourage productivity and competition......I suspect he was right.
In the big picture of the history of the United States, labor unions and poor government policy have done twice the damage to the working class as any greedy business ever has.
Those businesses provide jobs, unions and government suck money out of the workers pockets.
You want to fix world economy and save all the poor people from themselves?
Look up a guy named Henry George. We should adopt his ideas on taxes and government spending. Adam Smith had similar ideas.
Tax the landholders, not people's income.
Deregulate as much as possible.
Eliminate the low bid government procurment system, and replace it with government employed workers to build the roads, bridges and schools.
This will save the tax payers, give the goverment control over those jobs.......and the wages paid. That will drive the competition for workers in the private sector, raising wages.
The government will save the "contractor markup" - everybody wins, except the contractors who make a fortune manipulating the "low bid" system.
Fact is today, most Americans do not work under the protection of a union.......
Manufacturers who do not own their means of production put themselves at whatever exposure the market is subject to. It is what it is.
I already have plenty of model trains......
Sorry, some of you are panicking and speculating for no reason to the point of turning off people from the hobby. Any manuafacturer, who want's to stay in business, model trains or not, will find other sources. It will take time. Unless you're a manufacturer (like I am), then please stop predicting the future and scaring away others!
Going back to my office to get my kevlar jacket...
Tinplate ToddlerNot correct Volker, these minum wages are outside of any labor agreement. But let´s stop that here, it is not contributing to the issue.
You are right, I overlooked them.From the DGB (Confederation of German Trade Unions):
In addition to the legal minimum wage, there are several industry minimum wages. These are negotiated by unions and employers in a labor agreement and declared by the policy to be universally binding.You are right, it doesn't help here.
Regards, Volker
ATLANTIC CENTRALMy opinions, I will jeep to myself. Sheldon
Ok what'd did you do with OUR Sheldon
ATLANTIC CENTRALManufacturers who do not own their means of production put themselves at whatever exposure the market is subject to. It is what it is.
He's baaaak
Moving the topic away from the Seatle minimum wage increase and the effect on the local restaurant industry, and back to trains.
If a MR manufacturer loses their locomotive source, what percentage of their sales does that make up vs rolling stock sales? I know it's going to vary a lot, but surely they sell more box cars than sd-40's and there is more absolute profit in the locos.
BigDaddy ATLANTIC CENTRAL My opinions, I will keep to myself. Sheldon Ok what'd did you do with OUR Sheldon
Did the world stop turning?
csxns Wonder if we all here will live without new model trains.
I don't know, could be touch and go!
SeeYou190 I hope few people have purchase plans disrupted too badly. -Kevin
Yes, those purchase plans have been disrupted but I can tell you my wallet is doing a happy dance!
nealknowsGoing back to my office to get my kevlar jacket...
Did you manage to find it?
So does anybody know?
Could current 3D printing technology produce locomotives with "molded on" details as fine and independent looking as the wire details found in modern hand-assembled locomotives? Or would the details be coarser?
It might not be long before some company takes the plunge into full high tech production methods to steer away from the sourcing/labor issue. Not to mention mold makers.
Mike Bude is a regular on Ken Patterson's videos and he is as much a car guy as a model railroader. The cars he gets from Shapeways have a rough texture and need sanding so I would say no unless there are better printers than what Shapeways uses.
There are 3D printers capable of the finish and detail, but I don't think anyone is going to buy an SD40-2 for prices that rival a cheap used car.
MR has joined the discussion.
http://mrr.trains.com/news-reviews/new-products/2018/08/factory-closure-impacts-several-model-railroad-manufacturers
3D printing may never have a chance to equal what can be doone with automated punch and die machines to make wire grabs. You have machines that can take in raw material at one end and spit out hundreds of grabs per hour. 4 such machine can be easily tended by one operator, who does NOT need to be any sort of master machinist. A plant full of these machines, with one or two actual experts who can fix them/correct the program/etc plus a few operators to tend them can produce more grabs and ladders in various forms and in scale sizes far more effectively than any sort of 3D printer setup. You probbaly don;t even need that many machines to keep up with the demands - production is so fast yoou cna run one type for a week and have more than a year's supply, switch dies to a different style, crank out those, etc. If suddenly every modeler wanted to use only scale size wire grabs on every piece of rolling stock, suppliers could easily keep pace. For things like this, it's possible to make them in a higher wage country because in the course of a day's pay, the worker makes literally thousands of them, so labor cost per grab is so exceedingly low it doesn't make enough of a dent to move the entire factory to another country just to pay the workers less. ANd since we're not talking about any high precision requirements (and there are PLENTY of US-based machine shops always busy with the real precision stuff - we DO still make things here), QC on the grabs and ladders is basically picking out any deformed looking ones because the material didn't sit in the die properly. Compared to the stuff I did - micrometer readings, go/no go gauge tests, etc down to a few tenths for jet engine parts - model railroad parts are nothing.
--Randy
Modeling the Reading Railroad in the 1950's
Visit my web site at www.readingeastpenn.com for construction updates, DCC Info, and more.
To more directly answer your question, yes, you could print an HO scale diesel shell with all sorts of detail as part of one print, but it wouldn't necessarily be the best way to do it.
An interesting early use for 3-D printed model parts was a detail part for a commercial jet engine intake turbine. The full-size part is an assembly of tightly fitting curved blades that would be impossible to mold in plastic due to the interlocking nature of the shapes, but a 3-D printer building up the layers of the parts could make a model in 1:144 scale that accurately duplicated the shapes.
To apply that to model railroading, you could design a print that would have all of the radiator detail printed in place as far back as you wanted to go, down to about .1mm for raised or embossed details, or wall thicknesses from .3mm to .6mm.
Eric
This morning I got a list of affacted and not affected companies from a German dealer. Thanks to All American Trains.
Affected are:
Athearn (Official Announcement)Bachmann/Kader - Kader owns their factoriesRapido (Official Announcement)Scale Trains (Official Announcement)Walthers (Official Announcement)Not buying from China:Accurail (Illinois based with in house production)MTL (Oregon based with in house production)Kadee (Oregon based with in house production)Kato (Japanese company with production based in Japan)Shinohara (Japanese based, but shutting down due to retirement)
With Shinohara shutting down due to retirement, has anyone heard anything about a possible buyer?
Shinohara makes a lot of Code 83 specialty track for Walthers including curved turnouts, 3-ways, wyes, double crossovers, and bridge track.
Alton Junction
Doughless Could current 3D printing technology produce locomotives with "molded on" details as fine and independent looking as the wire details found in modern hand-assembled locomotives? Or would the details be coarser?
3D-quality will remain inferior to injection molding until they can improve the resolution. While it has improved some over the years, it's still too grainy and rough for smooth exterior work.
There's also the time factor. Once the metal molds are machined, injection molding is much quicker than 3D printing in churning out parts; the latter usually done one piece at a time.
And good injection molding also yields little-to-no flash. IIRC, more intricate 3D printing requires some clean up work (with water) at the end of the process to remove the built-in support system.
Tom
https://tstage9.wixsite.com/nyc-modeling
Time...It marches on...without ever turning around to see if anyone is even keeping in step.
tstage 3D-quality will remain inferior to injection molding until they can improve the resolution. While it has improved some over the years, it's still too grainy and rough for smooth exterior work. There's also the time factor. Once the metal molds are machined, injection molding is much quicker than 3D printing in churning out parts; the latter usually done one piece at a time. And good injection molding also yields little-to-no flash. IIRC, more intricate 3D printing requires some clean up work (with water) at the end of the process to remove the built-in support system. Tom
Seems like we are a long ways off from not needing labor for assembly. Even if 3D printing becomes economical for printing parts, those parts still need to be assembled.
Anyway, it doesn't sound like labor issues have created this specific closure. Sounds more like a retirement issue.
The truth is out there.
tstageDoughless Could current 3D printing technology produce locomotives with "molded on" details as fine and independent looking as the wire details found in modern hand-assembled locomotives? Or would the details be coarser? 3D-quality will remain inferior to injection molding until they can improve the resolution. While it has improved some over the years, it's still too grainy and rough for smooth exterior work. There's also the time factor. Once the metal molds are machined, injection molding is much quicker than 3D printing in churning out parts; the latter usually done one piece at a time. And good injection molding also yields little-to-no flash. IIRC, more intricate 3D printing requires some clean up work (with water) at the end of the process to remove the built-in support system. Tom
[/quote]
Tom is correct. 3D quality is years away from (if ever) doing what injection molding can do. Detail, finish, time... all of these things are not something that 3D can compete on. Currently 3D printing is great for design stages of trains, but not really a lot more. (At least if you are thinking of manufacturing in decent quantity.)Injection molding is far faster and far cleaner. If folks are worried factory shutdowns in China will kill the industry, dont be. "Manufacturers" (I say in quotes because few of the train makers actually manufactur the products anymore) will find other factories and start the cycle again. The most likely thing in the future is that details come in a package and you apply them yourself. That is one of the few ways to save labor cost. Much of the North American market dislikes that idea, so you will eventually have to pay more for your trains... that is just how it is.Truth be told, many Chinese factories produce for train manufacturers at a loss to get the business and keep employees working. That eventually catches up with the business and it folds. It tends to happen every few years in China. (I am in the industry... we see this all the time.)The few manufacturers that actually produce products themselves are companies people should cherish a bit. (Piko is the biggest I know, but Micro-Trains and smaller shops come to mind) Those companies are likely going to cost a little bit more, but they have control of tooling so they do not have China factory closing issues. These places are usually better at quality control as well. And since the tooling isnt being shipped all over the world and damaged, the tooling will last longer and produce better models over the years.
riogrande5761The truth is out there
riogrande5761 The truth is out there.
What does that mean?
Doughless riogrande5761 The truth is out there. What does that mean?
Amtrak America, 1971-Present.
Doughless tstage 3D-quality will remain inferior to injection molding until they can improve the resolution. While it has improved some over the years, it's still too grainy and rough for smooth exterior work. There's also the time factor. Once the metal molds are machined, injection molding is much quicker than 3D printing in churning out parts; the latter usually done one piece at a time. And good injection molding also yields little-to-no flash. IIRC, more intricate 3D printing requires some clean up work (with water) at the end of the process to remove the built-in support system. Tom Seems like we are a long ways off from not needing labor for assembly. Even if 3D printing becomes economical for printing parts, those parts still need to be assembled. Anyway, it doesn't sound like labor issues have created this specific closure. Sounds more like a retirement issue.
Not necessarily. You can already make things with separate moving parts that require a modest amount of support removal. A slightly more mature piece of equipment should be able to automate the removal process. Freight cars, for instance, wouldn't require much more than shipping with couplers and trucks that the buyer attaches and "assembly" is basically removed from the equation. Packaging is the only part that a more mature 3D printer based business can't automate
Resolution and finish quality is already just a matter of cost. There's machines out there that can get down to 25 micron (granted on a small print area). That's like 3/32nds of a inch in HO scale.
That stuff is still beyond the horizon as a consumer product, but I firmly believe that it is feasible. And I'm usually pretty skeptical about fantastic applications of cutting edge technology (like self driving cars. We don't even have self taxiing airliners yet and you could build one using 45 year old equipment. Makes my brow furrow that people think you can easily deploy a more complex system in a more complex environment, but that's for another time).
richhotrainWith Shinohara shutting down due to retirement, has anyone heard anything about a possible buyer?
Walthers sent out an email a few days ago...
Update from Walthers regarding Shinohara track:Dear Walthers customers, We have some updated information regarding Walthers Code 83 Track to share with you. First, Shinohara is currently working to fulfill a large track order for us, and we expect that shipment of track to arrive later this summer. We will fill as many back orders as possible from that order, and then we will make the remaining track available for purchase. After fulfilling that order, Shinohara will cease track production. We would like to thank Shinohara for their many years of partnership with Walthers and service to the model train hobby. In addition (and with cooperation from Shinohara), we are already working with a new track supplier and will bring the Walthers code 83 track line back onto the market as soon as possible. We will share more details on this exciting new development in the future. Until then, thank you for your understanding and your support. Sincerely, Your friends at Walthers
Regards, Ed
Thanks, Ed, for posting that notice from Walthers.
That is very good news because without an alternate supplier to the retiring Shinohara, there would be a huge hole in the specialty track market.
Just to toss my 2 cents...hobbytown of Boston is still alive and kicking, 72 years old, and still made in the USA.
For those who say it cannot be done here, it certainly can.
We cannot box kits & parts fast enough.
Just sayin....
Nick
The upheavel due to enviromental issues or wage/cost of manufacturing has happend before. In our hobby it was to the brass model industry in the 1970s and early 1980s. The wages and cost of living in Japan rose very fast with massive inflation, and a fallout of the value of the American Doller vs the Japanese Yen. Production moved to South Korea, then it happened again, most is still made there as the shrinkage of the market makes moving again and regaining the quality demanded by todays buyers mostly a non starter. In time, maybe not quite yet, some production will return to the USA. I would love to see all of it, but that is not going to happen in a global economy. And its not going to happen overnight or as fast as it all left. Lets hope that these companies can weather this newest storm. Guessing that many new items are not going to arrive prior to the Christmas season this year. I am glad to see China cleaning up thier act in reguards to polution and so forth. I will gladly accept some delays in hobby product for that country to quit trashing the plant we all live on. Mike the Aspie
Silly NT's, I have Asperger's Syndrome
csxns That i have more trains that i know what to do with.
That is true for me too; why I keep selling off trains.
Silly Aspie's, I have NT syndrome.
BATMAN SouthPenn China is a communist country. The government owns everything.
SouthPenn China is a communist country. The government owns everything.
Yeah.
angelob6660ALIENS!! To come to our planet and destroy our wonderful hobby.
In space, no one can hear you scream.
maxman angelob6660 ALIENS!! To come to our planet and destroy our wonderful hobby. In space, no one can hear you scream.
angelob6660 ALIENS!! To come to our planet and destroy our wonderful hobby.
Trains .. in .. space !!
Ken Patterson talked about this on his latest youtube What's Neat video. Add the new Arrowhead Models to those affected.
Ken also proposes a coop factory located in the US.
I had already heard AH was affected. Did Ken address how labor costs at a US factory would drive up model prices beyond what most could tolerate, which is not very neat. At least that is Jason of Rapido assessment of what would happen number wise, expect model prices to double or more in an example he gave.
There are places in the US that have lower costs to make things, such as Indian reservations and rural America
azrail There are places in the US that have lower costs to make things, such as Indian reservations and rural America
I don't know how labor costs work under the various regulators you'd see using Native American labor on reservations, but I do know that rural labor isn't going to save much, if anything. If it did, you'd have seen a wave of decamping manufacturing in every industry propping up small towns everywhere before moving overseas, and that never happened. Rural America actually got hammered into the ground worse than the cities did during deindustrialization.
Ken's theory was patriotism. No one objects to buying American, the problem is when the sticker shock hits. There is just no way that you can pay US workers $3/hr.
West Virginia could certainly use some new factories. That's not where companies are building their factories.
I am not trying to argue, I think China dominated the model train market simply by producing model at extremely cheap prices. Once they forced others out, they controlled the market and there is no one left to produce models. As far and sticker shock goes, I gladly buy US made goods including freight cars, sure they cost slightly more than the Chinese models but I really think they are better made.
I wish people would stop bringing up Kadee and Accurail. They have almost nothing in common with what's being done in China.
In the past 21 years, Kadee has created 40' boxcars, 50' boxcars, PS-2 covered hoppers, 50 ton hoppers, and 11,000 gal. tanks. That's it. Just 5 models in over 20 years. And these models are some of the most common prototypes available. If you only want a new model once every 4 years, and only of the most common prototypes, then the Kadee method is what you want. Personally, I prefer many more models on the market that are not just the most common ones.
Accurail makes kits; mostly low number of parts kits that share as many common parts as possible with each other. A typical Accurail kit has less than 20 parts.
DRfan,China didn't "force" anyone out. There was no existing market for what they started back with the P2K BL2. Take a gander at the early 1990's Walthers Catalogs - there were more Euro models in it than USA ones. China created their own market; one that no American company dared to even try.
And you are fooling yourself if you think the cost of US-made high end models will be just "slightly" higher than Chinese-made ones. Try two or three times the retail cost. Are you ready to pay $450 for a non-sound diesel? $150 for a boxcar?
No US-made model can compare to the Chinese-made ones except Kadee. But Kadee isn't going to make locos, cabooses, passenger cars, or much of anything else. There is no comparison in quality because no American company other than Kadee has ever made a complex model like the Chinese do.
Csmincemoyer,
No need to shy away. Paul wasn't trying to throw you under the bus in particular. Many people bring up Kadee as a shining example a company in the US that can produce nicely detailed ho models that aren't crazy expensive.
But if it were economical to do, then detailed RTR companies like Athearn, ExactRail, Tangent, Intermountain, Atlas and others would be moving production here in the good ol us of a. It seems plain enough that they should if it were doable.
csmincemoyer,It is possible for someone to disagree on a point without it getting personal. In fact, you are not the only one that has brought up Kadee & Accurail on this subject, just the latest. I've disagreed with your statement (that since Kadee and Accurail can make it work in the USA, then Atlas, Bowser, et al, could) in a even-handed way using facts and my opinions. AFFA in China supposedly produced 25% of the market, not 75%. And it doesn't really matter if all the manufacturers combined to form model train factory in the USA or not. The cost of labor is the Number 1 cost in making a model today (a single Rapido coach has 198 pieces), and the reduction or elimination of the Federal Min. Wage is just not going to happen.
The only way to make the trains here is to either make them very simple or raise the MSRP to a price few will stomach.
riogrande5761,The funny is that Kadee cars were considered "crazy expensive" when they first came out. I can recall quite clearly many of my fellow club members swearing they'd never pay $20 for a boxcar. Why do that when you can buy an Athearn BB kit for $7? And used ones for less than $5? My, how times change.
So, after all the various theories about the factory closing (tariffs, environmental issues, whatever) was it true the real reason was the owner just wanted to retire? The Chinese people are very industrious and very business savvy. If the business of manufacturing highly detailed model trains is profitable someone will eventually take over the operation. If the retirement story is correct it seems odd that the owner couldn't find someone to take over the operation. Perhaps the profits weren't good enough. Just a thought.
My first encounter with US prototype model railroading was back in the late 1960s, when I received a gift subscription to MR. In those days, the RTR market was dominated bei either products of Japanese manufacture (brass) or European made products, which were sold under US brand names like AHM, LifeLike or Tyco. Key players were Rivarossi, Mehano and Roco. US brands manufacturing in the US were Model Die Casting (MDC or Roundhouse, Athearn) and Atlas (track, later importing from Roco).
Correct me if I am wrong, but there has never been a model train manufacturing business to the extent as seen in Europe, with rather large enterprises like Marklin, Trix (now a brand of Marklin), Fleischmann (now a brand of Roco), Roco (a late comer in the industry), Rivarossi, Lima, Mehano.
While Europe retained manufacturing resources, nearly all US capacities were moved to China. Moving the production back to the US therefore would mean building a new factory which would certainly require a sizable capital investment with rather little prospect of a high ROI. I doubt that a bank would lend money for such a venue. In my humble opinion, this is actually the biggest obstacle in moving the production back to the US, not the wage difference, which becomes less each year.
Paul3 And it doesn't really matter if all the manufacturers combined to form model train factory in the USA or not. The cost of labor is the Number 1 cost in making a model today (a single Rapido coach has 198 pieces), and the reduction or elimination of the Federal Min. Wage is just not going to happen. The only way to make the trains here is to either make them very simple or raise the MSRP to a price few will stomach.
And it doesn't really matter if all the manufacturers combined to form model train factory in the USA or not. The cost of labor is the Number 1 cost in making a model today (a single Rapido coach has 198 pieces), and the reduction or elimination of the Federal Min. Wage is just not going to happen.
The above is the one simple fact that for some reason is being over looked over and over and over by everyone who thinks manufacturing highly detailed model trains in the US is a something that can be done. As they say, this isn't rocket science - it's basic economics 101.
I remember that and when they came out, they were pretty much out of my price range - when I first saw them I recall them being about $24-$28, but maybe I was n't on the bleeding edge with them when they first came out. Since I was also focusing on mid-1980's through early 1990's and most of Kadee rolling stock is too early for that time frame, in general, I somewhat ignored them. I've back dated by about 10 years so I have picked up a small number and may get a few more eventually since they offer versions that overlap into the late 1970's and early 1980's period.
As far as Kadee prices, that was a lot relative to the much cheaper prices of other contemporary models, and they have risen a good deal since then keeping pace somewhat with other well detailed models we see from other companies. I often see NIB Kadee freight cars at shows for between $20 and $25, which isn't bad - they are nice cars. I remember when Tangent first came out with their original car, the 4740 covered hopper for $44.9x and as beautiful as they were, it was beyond what I could wrap my head around. It was probably at least 5 years after the were on the market before I bought my first Tangent cars; since then other makers have priced models into similar range as Tangent while Tangent has pretty much held the line on their model prices. They've become one of my favorites in recent years. I managed to find and buy 8 numbers of the original D&RGW 4740 hoppers released back near the beginning and for about 36 to 38 dollars to boot. Lovely cars.
jeep35 So, after all the various theories about the factory closing (tariffs, environmental issues, whatever) was it true the real reason was the owner just wanted to retire?
So, after all the various theories about the factory closing (tariffs, environmental issues, whatever) was it true the real reason was the owner just wanted to retire?
Only reports of environmental issues or owner wanting to retire - different claims by different people - who is right? No idea. One contact I had communicated the factory was closed down for a month and at the end of the month, it would either re-open or close for good. That was only one contact. I imagine most, if not all of the model companies are working to secure alternate factories, which is the smart thing to do. No body wants to have a fickled fate. Some have already commented that alternates are already in-process but I don't know if there is enough capacity in other factories to pick up all of the projects or only a portion of them - probably the latter. We'll know more in the comming months. All I know is the break in flow of models will let my budget start to cool off as it's been fast and furious lately for me. I could use the break myself for a few months.
Tinplate Toddler Correct me if I am wrong, but there has never been a model train manufacturing business to the extent as seen in Europe, with rather large enterprises like Marklin, Trix (now a brand of Marklin), Fleischmann (now a brand of Roco), Roco (a late comer in the industry), Rivarossi, Lima, Mehano.
Europe is really a different beast with it's own economy. There are a lot of things that are different but probably play a role in why you really can't compare Europe manufacture of trains to the US. I haven't even looked at European trains for at least 15 years but I always took notice of the much higher prices of engines and cars and just figure they were much more expensive because of the higher labor costs. But for whatever reason, Europeans were acclimated to those costs - and probably didn't have train collections as large as many US hobbyists - and for obvious reasons - at those prices, you can't buy nearly as many.
For whatever reasons, US hobbyists are acclimated to a different prices structure, and not only for models but other things like gasoline etc. We probably pay less taxes but also don't have national health insurance. There are probably all kinds of costs built into the European economy that makes it apples to oranges. So while it's great to talk about your world of Europena trains and manufacture, I'm not sure it's directly relevant to the US/Chinese model train discussion, which is a different beast based on a different set of rules and economic factors. Moving the production back to the US therefore would mean building a new factory which would certainly require a sizable capital investment with rather little prospect of a high ROI. I doubt that a bank would lend money for such a venue. In my humble opinion, this is actually the biggest obstacle in moving the production back to the US, not the wage difference, which becomes less each year.
Moving the production back to the US therefore would mean building a new factory which would certainly require a sizable capital investment with rather little prospect of a high ROI. I doubt that a bank would lend money for such a venue. In my humble opinion, this is actually the biggest obstacle in moving the production back to the US, not the wage difference, which becomes less each year.
No. As Paul pointed out, and others, it's the labor costs, not the factory investment. Add the two together and its even worse. Now it's true that Chinese wages have been rising and that causes the cost to make detailed models in China higher - but when it rises enough, it still may not make sense to move back to the US, but I would guess eventually another low wage market would be sought out, just like when manufacture moved from Japan to Korea, and then to China - but so far, China still seems to be the best place to be, for how long - a few years yet maybe.
Not sure what you mean by never a large model train industry in the US. Lionel, American Flyer, Varney, Mantua/Tyco, Walthers, Athearn, MDC, Bowser, Penn Line, Atlas - all that stuff was made in the US. And many brands that weren't used Pittman motors, those were 100% US made as well. Apart from Lionel using Rivarossi as the source of some of its early (first go around) HO, most of this stuff was still all made in the USA until at least the 60's, and depending on the manufacturer, beyond. It was the 60's when the idea of having things made cheaply in Hong Kong took over, partly coinciding with the business fad of the giant conglomerated corporation. Tyco and Lionel are a couple that came under control of what were mostly food companies, and promptly got run right intot he ground with poor quality. Those companies might have known how to sell cereal and cake mix but they had no clue about the model train market.
The US has had a pretty solid tradition of model train manufacturing. It was in part the fine machining capabilities of those model train companies that contributed greatly to the war effort during WWII. Varney, for example, had a bunch of precision screw lathes that could make small parts with a precision that other industries, who made parts measured by the ton, couldn't do.
rrinkerNot sure what you mean by never a large model train industry in the US. Lionel, American Flyer, Varney, Mantua/Tyco, Walthers, Athearn, MDC, Bowser, Penn Line, Atlas - all that stuff was made in the US. And many brands that weren't used Pittman motors, those were 100% US made as well. Apart from Lionel using Rivarossi as the source of some of its early (first go around) HO, most of this stuff was still all made in the USA until at least the 60's, and depending on the manufacturer, beyond. It was the 60's when the idea of having things made cheaply in Hong Kong took over, partly coinciding with the business fad of the giant conglomerated corporation.
I didn´t say there was never a model train industry in the US. I said there was never a large manufacturer - large meaning employing more than 1,000 people. By the time I joined the hobby, most of the manufacturing facilities had already been moved outside of the US, with Athear making the move to China as late as 2009.
Marklin currently employs more than 1,100 people in Germany and Hungary. Roco´s figure reads in excess of 600 in Austria, Slovakia, Romania and a smaller figure in Vietnam.
Model railroading has always been a quite expensive hobby in Europe, partly due to much lower wages in the early years until the mid 1970s, but mainly due to the VAT, which currently runs at 19% and even in excess of 20% in some countries. On a pre-tax basis, European model trains are not more expensive than what you folks pay in the US for products made in China. Don´t look at the prices you see when visiting the websites of the leading importers of European model trains - they are just crazy and up to 45% above the pre-tax level in Europe!
Ulrich,
True, when model trains for North America were made mostly in North America, it was mostly a lot of small/medium sized companies. But there were LOTS of them.
Athearn, Walthers, etc, only numbered their empolyees in double digits for the most part, maybe the very low hundreds as a high point.
LIONEL was likely the biggest in their heyday.
One main reason none have been public companies.....too small.
But that does not mean they did not crank out a lot of product.......
Athearn and Wathers have been very prolific in their history.
And that is part of the issue, a blue box kit was easy to produce with just a few people, in very large volumes. Todays high detail products, not so much.
ATLANTIC CENTRALAnd that is part of the issue, a blue box kit was easy to produce with just a few people, in very large volumes. Todays high detail products, not so much.
Sheldon - that nails it! Maybe we want too much, while not appreciating the extra detail in terms of price. I never understood why we need to have super-detailed cars when you can see trhe detail on on clese-up photographs. But thta´s a different story.
ATLANTIC CENTRALBut there were LOTS of them.
And there still are - on both sides of the Big Pond. There are countless small enterprises catering for the hobbyist, not only the big names.
Watch for yourself:Rapido Trains, https://youtu.be/Ka7LC1jia64https://youtu.be/4uTSdY4dGGYhttps://youtu.be/Bo5vPMEc6v0
ScaleTrains.com: https://www.youtube.com/watch?v=1rCRGo46TZkRegards, Volker
riogrande5761 As Paul pointed out, and others, it's the labor costs, not the factory investment.
As Paul pointed out, and others, it's the labor costs, not the factory investment.
For some context of scale, I looked at Rix Products. The building is a simple prefab steel building of 7500 square feet and presumably houses every aspect of the company. Finding a comparable vacant property anywhere in the US is trivial. I found several suitable properties just outside Pittsburgh that settled around 20 cents a square foot a month on average. That's $1500 a month and $18k a year.
If employ 5 people and pay them minimum wage for PA, my labor costs are $75k a year.
Once I get the initial $150k in upfront costs for injection molding machines, raw materials and molds are relatively low cost compared to the $75k I have in labor costs. Yes, I might have $60k tied up with a single mold, but that's a one time cost that can be amortized over years. Labor cannot and will also get more expensive over time.
I'm not even sure the majority of Rick's business is the model train products. He uses those machines for other things as well.
$150k for the machines? A USED model of one of the two that he just added to his shop sells for over $105K USD. You're off by almost an order of magnitude on the cap cost of the equipment needed to replicate Rick's shop. In addition to the molding machines, there are other machine tools needed to make the molds. Even buying all used, precision machine tools like that and the injection machines are NOT cheap.
ANd while you MIGHT be able to get minimum wage workers skilled enough to runt he injection molding machines, you will NOT get a toolmaker foor minimum wage, not even close - that's another one of those jobs like the ones Mike Rowe talks about where you can earn quite a nice salary without a college degree. It does take training and experience to become a skilled machinist, but that's trade school, noot college. Most definitely not a minimum wage job.
rrinker I'm not even sure the majority of Rick's business is the model train products. He uses those machines for other things as well.
Here's his website: https://rixproducts.com/
I'm pretty sure that the model train products are not the majority of his business. I think I read someplace that he made train stuff when his machines were not busy doing "real" work.
The numbers are purely illustrative,not an example of what you need to do with a business. I was able to source the same types of machines for under $20k a machine on the secondary market,but if that's unrealistic, it isn't important to the general gist. Those aren't a recurring cost. Even if you had a stand up half a million in equipment, you're still getting hammered on your labor cost.
Which is why I pointed out the minimum wage. There's an absolute floor there. You cannot cut labor below that point. I made $7/hr just cleaning machined rings in a shop 15 years ago. That job probably pays closer to $10 now. Even if we make a wild stab and say our five workers are making $15/hr, that's $156k in labor. Over five years, we have $780k in labor but our equipment was still $500k and had an amortized cost of $100k.
Paul3DRfan, China didn't "force" anyone out. There was no existing market for what they started back with the P2K BL2. Take a gander at the early 1990's Walthers Catalogs - there were more Euro models in it than USA ones. China created their own market; one that no American company dared to even try. And you are fooling yourself if you think the cost of US-made high end models will be just "slightly" higher than Chinese-made ones. Try two or three times the retail cost. Are you ready to pay $450 for a non-sound diesel? $150 for a boxcar? No US-made model can compare to the Chinese-made ones except Kadee. But Kadee isn't going to make locos, cabooses, passenger cars, or much of anything else. There is no comparison in quality because no American company other than Kadee has ever made a complex model like the Chinese do.
Wow! Excuse me! And I thought this was an open discussion.... I didn't know you owned the forum! No wonder people are being turned off about this hobby.
Easy there, DRfan. He has merely mounted a counterargument with some flesh to it. If you still disagree, refute what he says with some facts of your own. He hasn't kicked you in the teeth. No need to get all huffy.
*facepalm*
Seriously?
Are we never to disagree...ever? Debate a topic? Present opposite arguments and counterpoints? Are we allowed to only post happy agreements? It sounds like it is only an "open discussion" if everyone has the same opinion.
And then suddenly my disagreement with a poster on a discussion forum is responsible for killing the hobby. To quote a meme, "Well, that escalated quickly."
selector,Thanks, man. I don't know what it is these days. It's like every disagreement is treated like a personal attack. *shrug* I dunno.
DRfan Wow! Excuse me! And I thought this was an open discussion.... I didn't know you owned the forum! No wonder people are being turned off about this hobby.
As far as people being turned off about this hobby because of forum discussion, I have never heard that point of view expressed before.
Sure, some people may be turned off about some things like model railroading clubs or the cost of the hobby or the lack of video game excitement in model railroading. But, turned off about the hobby because of the tone of forum discussions?
If that is the case, just ignore the forums but don't quit or avoid the hobby of model railroading.
I'm busy and haven't watched this video. It may or may not have anything to do with this thread, but since it's from Rapido, it's probably worthwhile watching it.
https://youtu.be/u0DYxnNL28Q
Its my understanding that the high end finely detailed Kadee rolling stock (albeit common and infrequently released) can be bought for less than $150, like even 40, because the company sells so many couplers to offset the "loss" on the cars. I wonder if that's true, or if that's just what other companies say to excuse why they won't do it.
If it is true, maybe Intermountain can sell american made cars for less than $150, since they sell so many wheel sets.
Frankly, I've always felt that the Chinese labor market was allowing companies to produce high end, rare one off, proto specific models for folks who didn't want to build them themselves, at a price and pace that's unrealistic. To me, a product with that combination of detail, research accuracy, and quality should probably actually cost about $150 and $450. A correction to somewhere closer to those price points is probably way over due for those kinds of models.
Doughless Its my understanding that the high end finely detailed Kadee rolling stock (albeit common and infrequently released) can be bought for less than $150, like even 40, because the company sells so many couplers to offset the "loss" on the cars. I wonder if that's true, or if that's just what other companies say to excuse why they won't do it. If it is true, maybe Intermountain can sell american made cars for less than $150, since they sell so many wheel sets. Frankly, I've always felt that the Chinese labor market was allowing companies to produce high end, rare one off, proto specific models for folks who didn't want to build them themselves, at a price and pace that's unrealistic. To me, a product with that combination of detail, research accuracy, and quality should probably actually cost about $150 and $450. A correction to somewhere closer to those price points is probably way over due for those kinds of models.
The value of anything is only decided by how badly the buyer wants it, and how badly the seller wants to be rid of it.
If that market value of any product does not exceed the cost of production, usually by a factor of at least 3 and usually 5, production will cease.
You may be right in one sense about a high detail RTR freight car being "worth" $150 based on labor to produce it in this country.
But that is meaningless if there is not a large enough "supply" of customers willing to pay that price to support a suitable "economy of scale" to produce the product at that price.
I don't think too many people are going to pay even $150, let alone more, for products similar to those currently made in China and sold in the $40 to $70 range.
As for Kadee, I seriously doubt they "loose money" on the freight cars - BUT - it is very possible they sell the freight cars at very small profit. Something they can likely afford to do based on the coupler business paying their primary overhead and making a comfortable profit.
And keep in mind, Kadee is making the move to direct sales of all their products - this will boost profit margins........
Direct sales is the future of retail in general, and the future of this hobby......
I didnt mean to imply that someone's idea of "value" should be taken over market price.
But even though supply and demand dictates what market value is, those principals can only be a gauge for determining a price point if the market is completely free of "unfair" practices.
Airbus routinely undercut McDonnell Douglas, and the Japanese car companies could undercut American car companies because their government set policies that helped the airline and auto companies put products onto the world market at prices less than what their American counterparts could produce. Not to get political, but expenses that american companies had to pay for such as healthcare, benefits, etc, were burdensome relative to the foreign companies, who's governments paid for such things. If airbus and Toyota had to pay for the same employees expenses as McD and GM were burdened with, their planes and cars would be more expensive and not be as competitive.
I have no idea about the market influences effecting model trains. But it just seems to me that the mass produced popular item would cost less than the infrequently produced rare specifically detailed item, by quite a bit, if each product had to pay its own way.....amortize its own cost of production. I can't see where a common 50 foot boxcar could be priced at $30, but another rarer model comes in at, say, $37.
I have no data. It just always felt to me that the pace and quality with which producers were churning out newly tooled high end models at prices around $30 to $50 just seems unsustainable to me, unless there are some geopolitical forces supporting it....which may change of course.
richhotrain Thanks, Ed, for posting that notice from Walthers. That is very good news because without an alternate supplier to the retiring Shinohara, there would be a huge hole in the specialty track market. Rich
The unavailability of Shinohara dual gauge switches caused me to buy Fasttracks jigs and point forms.
Not exactly cheap, but as long as Micro Engineering and Midwest Products exist I can build track. Should ME disappear, theres still commercial flextrack/sectional track that appears at nearly every train show that can give up its rail for handlaying projects.
I wonder how much it would cost to start up rolling my own rail...