In the years that many of us have been in the hobby, we have seen quite a few companies exit the model train business. They include Right of Way Industries, K-Line, KMT, Weaver, and most recently MTH. At this point there has to be tons of tooling scattered about China and Korea. My question is; does anyone believe that any model train company will locate it, and try to make new products on it?
There’s supposed to be a saying in the toy train industry:
“Tooling is forever.” Meaning of course that once it’s built someone always ends up with it.
The question now is considering all the tooling that’s migrated to China that belonged to the companies you mentioned, now what? Once the Chinese have their hands on imported tooling they never let it go, so the only option is to do business with the Chinese or make your own tooling if you want to pick up where the others left off.
It’s anyone’s guess what going to happen, especially with the MTH tooling. Considering current events how many want to do business with the Chinese?
Do I think any model train company will try? Not at the moment. I wouldn’t. But who knows what the future holds?
No question that good tooling is valuable and tends to live on a long time in this industry.
But, the cost of creating tooling has droped tremendiously in the last 20 years, so making new tooling is not the big deal it once was.
I worked in the retail side of this business many years ago, I can tell you all sorts of stories about hobby products, not just trains, that have been owned by and sold under a half dozen names in as many decades. And it is still going on.
I’m an HO guy, and I don’t own any MTH products, so I will not miss them one bit.
The reasons I don’t own any MTH products are many, but the primary reason is most are not really that good in terms of being “scale models” in my opinion. Not to mention high prices, crappy control system not fully compatable with the two established HO control systems, and a selection of products that generally don’t fit my layout theme.
In HO & N, Athearn, Walthers, Rapido, Atlas, and others seem to have no problem controlling the ownership/location of their tooling in China. Recently (a few years ago) many of these companies had to find new factories, yet those same products are now rolling onto our shores and clearly appear to have poped out of the same dies…
The one company that has been known to have some problems is owned by a guy who came from LIONEL, Broadway Limited Imports. They have items in their line that have been made in three different countries, multiple factories, and partly retooled every time.
Maybe O gauge people think different and do business different?
Sheldon
Well, Kline’s tooling went to Lionel I do believe. As to where the MTH tooling ends up, your guess is as good as mine. But it will remain in the PRC, once tooling ends up there, it never leaves. Time will tell where MTH’s stuff ends up if no one buyer is found. Mikie
All of K-Lines tooling did end up with a Chinese sub-contractor that Lionel could use BUT a lot of that product also showed up as a new brand called “O-Line” and reboxed as such. I believe that RMT buys product made on this tooling. Such is life for the “agreement” that Lionel purchased it but we all know once tooling is made in China, it stays in China. As for MTH and the other brands; my guess is that Menard’s may start importing product from the same sub-contractor that has old MTH tooling and expanding their line once this Covid event passes. The Chinese have been given and now own the model train market.
Well said, they have been given the model train market, lock, stock and barrel. But its also this that those of use with prewar Lionel OO wish could work in our favor. Since the Chinese love to clone everything. Us OO gaugers wish they would clone the Lionel 3 rail track and switches(and 2 rail)so we could build layouts without needing a millionares wallet. Just use modern plastic instead of Bakelite for the roadbed! Mike
Take a close look at Menard’s cabooses. They’re Marx.
Makes sense if those cabooses are coming out of China, they are Marxists after all. [:-^]
Actually, it went to Kal-Kan the manufacture of K-Line and Lionel at the time. As they actually obtain all rights to it with Lionel have the option to use it for a year and the option to continue to lease it after that but Lionel decided not to. So that’s how it ended up in O-Line using it.
Marx/K-Line clones… the boxcars are AMT/KMT/Kris/Williams clones, all from new tooling.
There’s a lot of skewed information here that warrants correction, along with some of my thoughts, which are based upon what I read about production in China, from the people who are directly involved.
- The name of the facility is not Kal-Kan. It’s Sanda Kan, who at one time produced nearly all the model trains being manufactured in the world. Sanda Kan ended up having money problems, certainly not helped by the $3.8 million debt K-Line left them with, so Sanda Kan was purchased by Kader Industries, the parent company of Bachmann.
- K-Line’s tooling did not go to Lionel. It remained with Sanda Kan, who struck a deal with Lionel to market and distribute K-Line products under the Lionel banner, no doubt to help recover some of the debt they were left with. Some K-Line product tooling, like the A5 steamer is now owned by Lionel. But the vast majority of K-Line tooling we can assume is still with Kader. Willliams by Bachmann (also owned by Kader) has brought out a select few of those trains.
- While tooling may be less costly than it once was, it is still expensive in terms of the model train market. One of the HO companies has said it costs a quarter of a million dollars in R&D and tooling, to bring a new locomotive to market. And they can expect to sell several thousand in an initital production run, not several hundred like Lionel or MTH. And if tooling was so cheap, why wasn’t MTH doing more new tooling like Lionel, save for the scale 44 ton switcher? Seven or eight years ago, Mike Wolf said that they were in debt. I suspect that situation didn’t improve much. Lionel has the benefit of making most their profits on the traditional line of starter sets, of which MTH never had anything close to the same market share.
- On the topic of the future of MTH products and someone else making them: Mike Wolf has siad that his tooling was high quality and made for extended production runs. But most it is now decades old and may require refurbishing. This would
For Menard’s Williams/WBB clones(boxcars case in point), your theory is that Golden wheel has access to Bachmann tooling. That isn’t likely at all. It’s Golden Wheel’s tooling, no investment by Menard’s. Menard’s doesn’t have any interest in tooling, the contracts certainly are for finished goods, they don’t care how the manufacturer accomplishes it.
There is some good info in this thread but the fact remains that there is now more model train tooling in China, than companies willing to buy products made from it If a company has money to spend you’ll see how fast the tooling over there gets used no matter who “owns” it. The Chinese work like that. Over there money talks, nobody walks.
Not arguing any of the points that have been made by anyone in this thread. But it sure seems like there have been more “questionable” situations with O gauge and large scale companies/tooling than with HO or N scale products.
Some HO companies are still doing their injection molding here and sending parts to China for assembly.
Atlas has been making stuff in China for a long time, but no HO scale knock off of Atlas Custom Line track has “turned up”?
There were “knockoffs” of Athearn freight cars by the Chinese 35 years ago when the tooling was still here, yet there does not seem to be a problem today?
The tooling for the original Revell HO scale buidings has been owned by a half dozen companies and been produced in nearly that many countries, and sold under a long list of brands, but I don’t think in 65 years anyone ever used that tooling illegally.
Here is what I think, from what I have heard.
Companies in O gauge or large scale, like LIONEL, K-Line, MTH, Aristo, or even BLI in HO, made deals with the suppliers in China to share the cost of tooling, and these deals have bit them in the butt.
35 years ago LifeLike paid Brawa to reverse engineer the Athearn drive and tool up the Proto2000 line of HO engines. Then that tooling went to China where LifeLike already had strong supplier relationships and they made locos without any problems until they sold out to Walthers.
Walthers still has that line made over there with no problems of tooling ownership, despite fact
No Rob, I agree with you. I re-read what I wrote. No, it’s not my theory that they have access to the Bachmann tooling. WBB has responded they have nothing to do with the Menards boxcar. It is most likely something akin to the scenario you wrote. Whether folks like it or not, the property rules in China are different.
I don’t believe that anyone has mentioned where the KMT/Kris tooling ended up . The Menards boxcars look very similar to the KMT cars that I own that fall midway between O gauge and O scale. Golden Wheel may have acquired those molds and/or some Right of Way tooling as well.