In case you’ve missed the big news, Lionel,LLC CEO Jerry Calbrese announced at the TCA Museum yesterday that Lionel has plans to return SOME production to the United States in 2010. Most interestingly, Lionel has plans to do so in the greater Newark, NJ area.
For those who don’t know, one of the earliest Lionel factories was in Newark. Lionel later built in Irvington,NJ and finally on the Irvington-Hillside border. In the late 1960’s Lionel moved most production to Hagerstown,MD and even produced the Post War 2029 loco in Japan.
After General Mills purchased the Lionel tools and machinery in 1969, production was slowly moved to Mount Clemens, MI.
Today, all Lionel production is sourced in the Orient in either China or South Korea.
Jon, and lest we forget the ill-fated move to Mexico! It is just too bad that all of the toy train companies can’t manufacture their trains here. America First! If the politicians REALLY wanted to fix the economy they would stop chasing good paying jobs overseas!
I too was not aware of that Jon. Thanks for posting. I recall almost a year ago that some hints to this were passed around, but I am not sure if it was just wishful thinking. Glad to see it is coming to fruition.
I would not expect to see much production come back state side. Perhaps some token items, and if they located a small factory in the Newark area they would be able to get tax breaks for locating in an area where the manufacturing base is all but gone. Token being an operatiive word, similar to what occured when MPC moved production for it’s inugural line from Hillside to Mt. Clemins. A small section of the Hillside plant was retained and some prototypes, and limited production runs where made there for a few years. Stay tuned… Ken
According to what Lionel CEO Jerry Calabrese said at YORK, the plans are to have some limited production stateside, where it is planned to produce a couple of new starter train sets. He also said Lionel would be doing an across the board 10% rebate on all Lionel new Lionel purchases regardless of the retail vendor, though I might guess this would exclude anyone who is not a authorized Lionel dealer. But who knows… maybe this will include the big box retailers who are carrying Lionel sets. Obviously Lionel is aware of the complaints made over their overall much higher list prices with this last catalog.
And before we dump on Lionel too much in this regard, let’s remember that Curtis, Gargraves and Weaver (among other smaller niche companies) all have full or partial production here in the US and all are competitively priced. Of course, Lionel has a long history of being the “list price leader.” But given the value priced Weaver line, which has long been called the “Athern of O scale.” being produced in the US does not necessate higher list prices.
Too bad they can’t bring ALL production back to Michigan and convert the abundance of empty GM factories into Lionel factories. I would LOVE to work for Lionel.
Hey, let’s not dump on Lionel or make assumptions on their future plans when they have just been announced. Obviously people will be paid more than “Chinese labor rates.” On the other hand, since I live in an area where there is still some manufacturing, the old days are long gone. Benefits are not what they were and pensions are not existant. So while people still want these jobs, they are not the paychecks or benefits they once were.
Also bear in mind, Jerry Calabrese once explained that Lionel was careful in their hiring as they didn’t want to employ die-hard train fans who could not surrender their own desires for how they think things should be done (or the kinds of products they think Lionel SHOUILD make - which usually doesn’t mean starter products) behind the Lionel’s plans.
I’m not privey to Lionel’s books, but I would strongly guess more profits are made from the lower cost starter products and some of the postwar re-issues than from many of the newer more advanced products. They absolutely sell more of those starter and postwar re-issue products, which is why I think you see Lionel putting more emphasis on them.
Since Calabrese’s statement that Lionel would be making a couple of low cost starter sets someplace in New Jersey, I cannot imagine they would want to hire guys who are so determined to have scale products, that they cannot go along with price-point quality standards for starter-types of products. Or take what very well might be a cut in pay for those who already make the kind of money that allows them to spends hundreds of dollars on one single locomotive.
Many people have wished Lionel still made products in the USA. Now they have announced an intention to make some of their products stateside, so let’s give them a chance and see how things pan out in the upcoming months or years.
Lionel is a business and Calabrese knows he must make a profit. Just pull out a Lionel catalog from the late 1990’s and compare it to 2009. His comic book background is telling him to find the wave and ride the wave.
BINGO!!! I would bet that 60-80 percent of Lionel’s Gross Revenue if from the starter and postwar issues. So if this is what the public is buying, give it to them and make your profit.
Ah Buckeye, I detect a touch of cynical humor! [;)]
I don’t think Calabrese’s comic book background is prompting him to ride the wave as much as it is probably what the investors want him to do. I’m sure Calabrese was hired due to his marketing/licensing background - because the investors of Lionel hoped his background would help bring in new customers and thus more profits.Lionel has a tough balancing act to follow. Honestly because of the name recognition, Lionel is in the best position of all the various companies to sell train sets to newcomers. At the same time, I don’t believe they want to lose established sophisticated adult customers. Lionel’s Legacy Update as posted by Marty seems to illustrate that point.
Yet at the same time, I think even the train companies have realized it is difficult to be all things to all customers. I’ve noticed while many still offer a variety of products, they are definitely more focused on their strongest sales base. For example, while MTH has the Rugged Rails line, not much happens with it. I think MTH’s best customers are the ones who are seeking more scale products, and that’s where the product line has gone. Even the once semi-scale Railking line has become mostly scale. Atlas has the Industrial Rail line too, but they are doing far more with their Atlas O and Trainman lines.I’d be t
Nope, his background in the comic book industry has three major components, marketing, finance/HR and production. Simple business model taught in 101. Successful CEOs that I have met understand the basics of each component. He knows that looking into the future and planning for the future is the key to Lionel’s success or failure. They will plan all three components, not just marketing. Investors are counting on him to put together a strategic plan so that they rightfully get a return on their investment. If he doesn’t, he looks for new work, sells his boat, lake house, extra car and moves on. Been there, CEO changed and I was out. I didn’t sell the boat. [:-^]
Calabrese is not sitting there in some office tying to decide what horn to use on what locomotive, but is looking at a big picture involving the basics but it is very complex with government regulation, labor costs, foreign/domestic manufacturing, raw materials, world and domestic events, value of the dollar, etc. He is talking/listening to manufacturers, economist, retailers, etc. with many of them that having nothing to do with toy trains, but are looking at trends and the future. (He attends exclusive seminars only for executives of companies They are done all the time. I sat in a seminar once with
Buckeye, very good - and well written too! Thanks!!
I guess I’m so used to reading references to Calabrese’s background where it seems it is meant as an insult rather than a compliment… things along the line of the “comic book genius.”
Obviously, you have more understanding of what Lionel is doing than many others who make the shallow sarcastic comments, thinking they could run Lionel better than Calabrese can. Yeah… sure.