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?
Henry
COB Potomac & Northern
Shenandoah Valley
azrail How does Kadee do it in Oregon, yet offer the same quality level as the stuff from China at almost the same price?
How does Kadee do it in Oregon, yet offer the same quality level as the stuff from China at almost the same price?
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.
Rio Grande. The Action Road - Focus 1977-1983
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.
Brent
"All of the world's problems are the result of the difference between how we think and how the world works."
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.
Russell
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 ....
Mark.
¡ uʍop ǝpısdn sı ǝɹnʇɐuƃıs ʎɯ 'dlǝɥ
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.
-Kevin
Living the dream.
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.
- Douglas
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.
Happy times!
Ulrich (aka The Tin Man)
"You´re never too old for a happy childhood!"
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?