We are not alone/ An editorial

Classic Toy Trains Forum
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As model railroad hobbyists, we are not alone. I picked up the June 2005 issue of “Hot Rod” magazine the other day. The one with the red and white Shelby GT500 on the cover. What an eye opening experience that was to be. I will suggest that you take the time to read the Editor’s Letter by David Freiburger on page 10, “The New Imports: Speed Parts“. It is only a page long and it may open your mind as it did mine, in more ways than one.

You may ask what does hot rodding have in common with my model trains. According to Mr. Freiburger the parts industry is facing an onslaught of imports from foreign countries making it hard for U.S. companies to compete. This is going on while we model railroaders are seeing companies moving their manufacturing overseas. Obviously, the same is happening in other areas as well.

Two things Mr. Freiburger mentions stand out. The first, in relation to recent shenanigans in the 3 rail community. I quote from column 2, paragraph 2, “ Then there’s China. The current joke around the industry is, “You know what R&D means in China? Receive and Duplicate.” That’s exactly what’s been happening, and there’s hardly an intake manifold that Edelbrock makes for a Chevy or Ford that hasn’t been duped overseas.” End quote.

Now where have we seen this before? Did you read the Pecos Brass saga in O Scale Magazine? Did you read the book written about the Wall Streeter that went to China to open markets? It must be more than obvious that China and other countries don’t work under the same ethics that we seem to be schooled under. Once the U.S. manufacturers decided to move operations overseas, they should have realized that they opening themselves up to unscrupulous business tactics. As I have said before, you have made your bed, now you have to lie in it. Unfortunately for our hobby, Mike either knowingly or unknowingly set himself up for what happened.

The second item Mr. Freiburger mentions is so scary that the previous paragraph pales in comparison.

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Big Jim, very good. I’ve read several articles by former government/military people who have concern over China’s long stated intentions to have Taiwan as part of mainland China… by force if needed. China has been reported recently as to be in the market for new weapons systems. Why?

To China, Taiwan not being part of the mainland is an insult of the greatest magnitude. The Chinese have never been happy about that situation since 1949. Right now, more cilvil minds prevail in the Chinese government: they want American dollars and American technology. They’ve gotten the dollars and they are learning greatly from our manufacturing being located there.

But any change in the composition of the Chinese governement could change that viewpoint. Seems there are some people who are greatly concerned that it is only a matter of time until China feels confident enough to make a military move. One article I read stated that Americans on September 10th didn’t believe that the US was so vulnerable to an attack until Spetermber 11th. I know articles like these can be written to drum up fear. But many I have read make very valid points.

Which is all interesting to me since the US has a defense treaty with Taiwan. The US has stated we would react with military force against China should they take action against Taiwan. How could we though? What would the US be able to do? We are and probably will be tied up in Iraq for sometime to come. And so much of our manufacturing now comes from China… would we actually bomb China? It would be somewhat akin to bombing ourselves. I’m sure it would take years for the US to rebuild our manufacturing capacity, especially if hostilities were to arise to such a point that all the American tooling, machines, dies, etc. remained in China.

Kind of funny that the desire for higher profits and more inexpensive cheap consumer goods may actually backfire.

I know there are many on the Forum who wi***hat Lionel (and others) had kept their

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Hello Big Jim ! Thank you for the eye opening post. This is another reason why the U.S. should not be sending Jobs over to China at all ! It almost sounds like one of these days when the Chinese get enough confidence that they will provoke some type of military confrontation with the U.S. We send Jobs & Money all over this ungratful World and get no Goodwill for it and it just boils my blood.What did our ancestors come over here for anyway to build a Great Nation and then have our current generation of Politicians give it all away.? The Great Washington fought for Liberty. Now we are fighting shadows or so it seems. Toy Trains & other consumer goods can and should be made on our own soil,Unfortunately, Due to Regulations,High Taxes,and other Red Tape, this is almost Impossible in today’s economy. Will it ever change,Who knows.? We need politicians who actually care for the American People more than they do their own interests and beliefs,And until this happens.only more of the same nonsense will happen[V][banghead][:(!]…Keith

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I think Brian hit the nail on the head again.

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Ok, I’m going to be slightly contrary to some of the other posts… but before I do, let me give you some background and some things to consider.

  1. I’ve been to China many times
  2. I’ve been in a Chinese factory that made HO trains.
  3. I’ve been to Taiwan many times,
  4. I’d rather be poor in America than middle class in either.

American businesses are far, far, far more efficient and productive than Chinese. The only thing they have going for them is labor. And that is drying up. There are actual labor shortages in China in areas like Shenzhen and Shanghai. That is driving the cost of labor up, which in turn will raise prices, which will lower demand, and so forth. Soon goods from China may be cheaper, but the new markets are Vietnam, Korea, and the Philippines, and of course India.

Now, regarding the article on hot rods, it was said " It must be more than obvious that China and other countries don’t work under the same ethics that we seem to be schooled under. Once the U.S. manufacturers decided to move operations overseas, they should have realized that they opening themselves up to unscrupulous business tactics." What exactly is unscrupulous about taking something that is NOT trademarked, copy righted, or patented, and making it cheaper? Isn’t that called progress? If you had a machine that could build something better, and there was a market for it, wouldn’t you build it and sell it? It’s the AMERICAN WAY.

The autoworker, train maker, parts supplier, widget builder who blames the Chinese for being more American is severely misguided. The person in New York who looses their job to someone in China would be just as upset if they lost their job to someone in Georgia, wouldn’t they? Regarding the price of steel, well we haven’t opened a new steel refinery in the country since the 80s. That’s not China’s fault is it? If you want to ask why we’re not competitive or why prices are expensive in this country, look at the regul

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Brianel027 made some great points, but one thing about manufacturing is that plastic injection made parts are not much cheaper in China than the US. It’s the assembly that is expensive. Most of the machines used to make those parts in China are either made in the US, JAPAN or now Taiwan. Dies and steel tools are made cheaper in Asia than the US, but the plastic costs are about the same. We buy several plastic parts in the US at a cheaper cost than from China or Taiwan. It’s when you have to sit down and hand paint, or glue those parts that you look to the far east. MTH could have gotten the steel tools made in China and had them imported and produced the parts in the US. It’s the fact that the Baltimore DC subburbs are not exactly a manufacturing hub that prevented them from doing so.

It’s also interesting to see more manufacturers selling products direct. If you think about it, there is at least a 4 step distribution process:

  1. Sub contractor makes raw materials (takes markup)
  2. Contractor in China, Korea, etc manufactures product (takes markup)
  3. MTH, KLine, Atlas, Lionel market, design, sell product (takes markup)
  4. Dealer sells products to enduser (takes markup)

and of course
5. collector keeps for 20 years then

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Lizard,

I was in mainland China in 1985 when Mao clothing was the norm and cars were rare. I recently heard that one of the reasons the Chinese and S. Koreans are not putting more pressure on the N. Koreans to end their nuclear program is because both countries see N.Korean workers (nearly everyone) as a new pool of cheap labor for them.

Who knows if soon our trains will be labeled made in China, after being outsourced to workers in N. Korea, in order to support their nuclear program against us and Japan?

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I buy Made In America whenever I can. I guess I have watched way too much History Channel.

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Dave, your’re absolutly right. But should we then stop supporting South Korea for the same reason? Are all the people driving Hyundai’s un-American?

But that is the responsibility of the manufacturer, to know where the raw materials come from. China may import workers, but they don’t import product from North Korea. So products made in N Korea won’t end up in the US. At least not yet.

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“It’s about disappointment in watching America become a servant nation whose most marketable commodity is its culture. Hot rods are a big part of that culture, yet the flag-waving hot-rodding marketplace cannot be counted on to actually pay more for products made in America. Will our hobby succumb to the world economy, or will we keep our American-made speed merchants in business? Only you can decide.” End quote.”

With all due respect, manufacture of toy trains, hot rod parts, dolls, toys and consumer electronic goods in China are not indicative of the end of American technologic expertise or compromising our national security. I’ve checked out a bunch of the high tech medical equipment we have in our imaging (formerly Radiology) and laboratory departments and none of it is made in China. Same with the figher jets, airliners, freighters, software, automobiles, weather satellites, etc. that are stil made stateside, in Europe or other democratic developed nations like Japan, Singapore, etc.

The reason we are so materially well off is we are too darn rich to bother making cheap stuff locally, and people want our ideas and products and dollars at a nice exchange rate in exchange for their low tech products. So anyone, even someone on public assistance, in this country can afford to buy a TV set, a telephone, an HO train set, or any other consumer low tech device. You want a house, a car, health care, legal services, an aircraft carrier, Dreamliner or education that requires developed nation skills and labor, it’s going to cost you, because we’re not about to work for the modest compensation someone in China, India or Thailand is willing and loves working for.

This is how trade has enriched us, the opposite of imprisoned us. Do you really want your children working in a coal mine? Not because it’s “beneath us” but because it is dang hard, dangerous, dirty work. Much nicer to work in a clean room assembling photovoltaic cells or as a respiratory therapist or aircraft mecha

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Well said Neil.

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Dear Torpedo,

I want to say that I respect what you and Big Jim are saying…I used to feel the same way. But as a greedy American Capitalist who believes in free markets, I’ve got to challenge some of your points on a case by case basis. So please, this is not a personal attack at all, I think the points you make are shared by many who long for the “good old days”

“This is another reason why the U.S. should not be sending Jobs over to China at all !”–the US is not sending jobs oversees, we are importing products made cheaply.

“It almost sounds like one of these days when the Chinese get enough confidence that they will provoke some type of military confrontation with the U.S.”–this is unlikely to happen for many years. The Chinese need us as a customer much more so than we need them as a supplier. Believe it or not, we can all live for a couple years without toy trains, and cheap plastic toys (even if we don’t really want to).

“We send Jobs & Money all over this ungrateful World and get no Goodwill for it and it just boils my blood.”
–Mine too.

“What did our ancestors come over here for anyway to build a Great Nation and then have our current generation of Politicians give it all away?”–If your ancestors were like mine and did not come over on the mayflower, they were probably hated and attacked like most immegrents. The Germans and Irish came over to work in the mines and the factories, but they were hated, murdered and persecuted by the English and Dutch who were here first. The Poles, Slavs, Lithuanians, Italians and others came over later and were labeled as trash by the Germans and Irish who were now integrated into society. After the civil rights movements, “Good hard working Americans” were loosing jobs to those who had recently regained their rights as citizens. Recently you can’t tu

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During WW2, right after Pearl Harbor, America wasn’t prepared for a huge conflict.
In order to gain the necessary manufacturing capacity, plants that normally
produced civilian goods were converted to war materials. This took time.
Initially, we were way behind the Germans and Japanese. So the automotive
sector built weapons. I’ve actually fired an M1 carbine made by General Motors.
(circa 1984, not during WW2 !)
I’m confident that we can build up again.

That said, I sure do hate to see history repeat itself. Red China is rattling it’s
sabre. They might not be ready to challenge us militarily yet, but they gain
strength every year. It’s no secret that they want Taiwan. But will enough
Americans care if there is a war when Red China asserts it’s claims on
Taiwanese soil. I don’t know. I most certainly do !!!
I’m not an economist, so I don’t know how to fix this situation the world is in.
This is a very interesting thread. Each poster has made some good points,
at least with me.[soapbox]

Alright ! I’m stepping down, now. Next, please ![:)]

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I would like to thank all of you for your many points of view and for, up to this point, making it an intelligent, educational (at least on my part) discussion and not turning it into a “my trains are better than your trains” type of flame war. I would also like to thank CTT for not deleteing it in less than the blink of an eye.

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I’m not sure how this fits in to the discussion, but I’ve noticed something interesting over the last few weeks. I’ve been shopping for a new car and have been looking at where they’re made. The Hondas and Toyotas I’ve looked at are built entirely in the US, while GMs usually have big portions made in China or Mexico. While I’d like to buy an American-brand car I’d rather support the American assembly line workers and buy a Japanese car. Just thought I’d mention that you can buy American where you’d least expect it…

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My mom’s Honda Civic was built in Ohio[:)].

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My employer is a supplier to the Big 3 as well as to others, such as Mercedes (in the US asbly plant) and Honda (US asbly plants). You would be surprised how much of the “American Cars” are made outside of the US and how much is made by “Joint Venture Company” . A “Joint Venture Company” is a partnership of two or more of different auto companies, such as Chrysler and GM.

Other things is GM or one of its divisions, make parts (sub-assemblies) for Ford or Chrysler. Or that Chrysler (now Mercedes) owns 60% of a Japanese auto company.

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This is a very interesting discussion, and I respect the opinions of those who have been overseas and have insights that the rest of us may not have. I wouldn’t argue for a moment that it is better to be poor here in America than in other countries around the world.

Though I will say that I know that tooling costs in China are 1/2 or more of what they would be in the US. That’s a big chunck of change when one considers the large numbers of completely new train items that have been introduced in the past decade. Consider that before production of our trains went overseas, how many new and different train items were introduced in the previous 50 years? After the glory days of the postwar era, Lionel MPC did more new tooling in a short period of time than had been done before.

My only bone of contention plasticlizard is with the salaries you listed for various positions with train companies. Again, from my own personal knowledge, those salaries are much higher than people actually make that are working for some of the train companies. I wish I knew a graphic designer with a train company making $90K. Even by US government guidelines and studies, $90K is a lot of money for a graphic designer. Even in NYC, the world headquarters of graphic design, you need to be someone very special to command the kind of money for a “logo/packaging designer.” Salaries average more than 1/2 less of that figure… and that’s provided you have a minimum of an BFA (Master’s preferred), a commanding portfolio and some work experience to boot. Again, I don’t know everyone in the train business, but those who I have know were making substantially less than those figures given.

Anyways, interesting reading for sure.

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Mercedes is one of the big three. Dalmer-Crysler is the name. Mercedes is Crysler.

Ford and GM are reporting huge losses in the last few days. Several of their less expensive cars are made by the Korean compny KIA as well. They hedged thier bets on everyone wanting SUV’s and now the people aren’t buying as many based on the price at the pump. If they don’t change fast the employee pensions are going to go the way Delta Airlines did this last week.

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Lately people have been bemoaning that we’ve become a service economy. As if that were a bad thing. Would it be better as it was in the early 19th century when virtually the entire population was involved in providing food? Or the late 19th century when 50% of job were railroad related? Or mid-20th century when 50% of jobs were automobile related? Productivity increases and transportation improvements now mean that 1% of the population produces 100% of the food, next to no one works in the railroad industry and the auto industry is fading as a source of employment. Wouldn’t you like to have the disposable income to hire someone to fix your child’s scoliosis, or treat your prostate cancer, or even mundane things like doing your laundry commercially? Is working in a steel mill really more desirable than working as a CPA or IT trouble shooter? Right now, the job opportunities and security are probably better as an auto repair guru than as an auto assembler, and the future has much of the same. Robots or the poorer nation’s laborers will do the harder, less skilled, more dangerous work, and more and more of the rest of us will have white collar jobs. After all, in 1950 about 1-2% of the population went to college, now it’s 60% or some such number. And these changes, in the long run, for most, but not all of us, are good. A rising tide lifts most boats IMO.