He makes a point about why production of models and toys is moving to China that had not struck me before. Cost is a big part of the equation, but the ability to keep releasing new products – something we model railroaders have a keen interest in – is a big part of it too. Here is a segment of the interview:
"The move not only lowered costs and improved quality, but also helped increase the pace of new product launches. Before the move, Hornby was producing one or two new Scalextric cars a year; today it is more like 15 or 16. Before shifting to China the firm was making only one new Hornby locomotive every three-to-four years. It is now introducing three or four a year.
The company offers a comparison of costs, and a stark illustration of why nothing is made in Britain any more. The last Scalextric car tooled in Britain used four moulds and cost £107,000. The most recent car placed in China used seven moulds and cost £29,000. "It is not that it would be impossible to produce that quality of product in the UK, simply that you could not afford to do it and end up with a commercially viable product," he [CEO Frank Martin] says."
What are the people that USED to manufacture/engineer the products doing for a living now?
What would the US have done if we had had no manufacturing capability during world war II? (I know, the original post dealt with a British company, but the philosphy is the same.)
Model railroading is a HOBBY, not something we must do to survive, and even given that it’s hardly possible to support our own workers. Note that I am no better than anyone else: virtually all of my RTR purchases are “made in china”, and I probably would not be willing to spend even twice as much for products made in my own country. Hopefully two things will happen: off shore standards of living and environmental responsibility will go up raising off shore costs too, and local manufacturers will be able to increase efficiency and reduce costs.
micro-trains…made exclusively in the USA…not sure they are any more expensive now, if so, i’ll pay, since its not that much if any. live on micro-trains!!!
Sooner or later, China will have a better standard of living – workers will have better compensation, etc. – and then everything will be more expensive everywhere!
Maybe manufacturing will move back to North America then. [:D]
Are you willing to pay 3-4 times the price for a model of equal detail and quality made in the USA? If so, you’re probably going to going the custom built route.
Here’s an order form for a Rutland K-2 Pacific from Eddystone Locomotive Co. If you will note, the base price is $800. http://www.eddystonelocomotives.com/orderform23.htm . That’s a nice model and the Rutland is a very modelgenic railroad. For $800, you can get 1 Pacific (a bit more for DCC and sound). Eddystone will also modify Genesis or BLI light Mikes to B&O Q-3’s for you if you like. Base price starts at $500. I believe you have to supply the locomotive.
I’ll grant you that Eddystone is not a manufacturer of mass produced models like BLI/PCM or Walthers, but if you think that manufacturing in the US wouldn’t substantially raise the price of items, I’m afraid you’re in for a rude awakening. Ascribing the transfer of model manufacturing to China as a simple case of “GREED” simply doesn’t cut it as an explanation. Models have to be made at a price and in quantities that will bring a decent return on investment. Are you willing to pay double to triple the amount for your hobby items?
In most cases, we the consumers are. We want the most for our buck. I often hear people compare a US made product to a cheaper import and accuse the American manufacturer of gouging consumers.
There are some economic trends that will work against China I would think. The exchange rates is one factor an the Yuan is increasing in value while the dollar is decreasing in value. If nothing else, the relative cost of Chinese products will trend upward. Also, Chinese general inflation rates are higher than in the USA. Transport costs should be increasing, too, along with fuel prices.
I was interested that it’s the tooling costs that are being considered as well as the production costs.
There are some economic trends that will work against China I would think. The exchange rates is one factor an the Yuan is increasing in value while the dollar is decreasing in value. If nothing else, the relative cost of Chinese products will trend upward. Also, Chinese general inflation rates are higher than in the USA. Transport costs should be increasing, too, along with fuel prices.
I was interested that it’s the tooling costs that are being considered as well as the production costs.
Tooling is part of production cost - Economics 101.
Right now the yuan is being held at an artificially low exchange rate by government fiat, just as the yen was until the 1970’s.
China is facing serious environmental and sociological problems - the kind that can’t be solved by a stone tablet from Beijing. Don’t be surprised if you wake up one morning to discover that the price of ‘Made in China’ widgets of all stripes has suddenly gone ballistic. I could wish that it wouldn’t happen (because of the impact on modelers who can barely afford this hobby) but it’s a question of When, not If.
Hello Chuck. Today (Jan 1), China has implemented a comprehensive set of labor laws that should protect wokers rights in China. This will ultimately make Chinese products less cheap. Also, US government has exerted pressure to allow the Yuan to increase in value. China has done so, but the Yuan is still not market-controlled.
I hope I don’t contribute to the demise of this thread, but I would say that China holds a lot of American dollars, and if their own Yuan rise against it, things will go bad for both parties in a full gallop.
No matter what happens, the hobby will do poorly in the long run. Hobby prices will rise if Walthers and Atlas and BLI hope to stay afloat. What we will grudgingly pay $80-90 for now will rise to $100, and perhaps beyond to $110-120. Some guys will leave the hobby, not necessarily immediately, but over time. The rest of us will continue to scrimp and dig deeper. A few of us will lie to those we purport to love in order to slip some purchases through the gate.
I agree with loathar. It is greed…a vice that knows every face.
I want, you want, they want. Trouble is the word “want” is corrupted from its earlier meaning of “unmet need.” I need an SD-40-2 in CP livery. Why, will you die without it? Well, no, but…I want one.
Oh, I see.
Greed. The vice that recalls no names. It can’t recall loathar’s name, nor mine, but it could pick us out of a crowd.
I couldn’t agree more. One can quote all the statistics you want and spout off all the economic theories but it all boils down to “no jobs = no money”. Eight to fourteen dollars an hour jobs make you someone that exists, not a consumer in the classic sense. [sigh]
All the mexicans that sneak over here of course. Did everyone think they only pick fruit and vegatables? ( I mean other than our elected officals ) Go to a construction and see if anyone speaks english.
American say they want to buy products made in America, but then they say the prices are too high and won’t pay.
Of course, these same consumers also insist their employers pay them the wage to which they have become accustomed, so the products they make cost more than the same ones coming from China and Mexico.
I am not an economist, but " back in the day" most all model RR products were made in the good old USA, except brass. I know we complained about prices then when we had to pay $29.00 for a Varney steamer. I realize the quality has improved drastically, but the prices kept up with inflation. So why now do we have to go off shore? It seems that manufacturers wanted to make more money. For example, a neighborhood shoe store used to sell Herman boots & I used to buy them. Walked in one day to buy another pair & was told they don’t carry them anymore. You see, they moved offshore & although they cost the company 1/2 what they used to cost, the wholesale price to the store remained the same. So the store owner dropped the line.
This can also go the other way. Moving offshore drove the last nail in Mantua’s coffin. They were struggling & thought going offshore would solve the problem. They picked a bad manufacturing plant & they underestimated the learning curve. Everything seemed to slip thru quality control & they ended up with junk being shipped back home. Just couldn’t hang on long enough to get things straightened out. Jerry