What road name?  Have you

What road name?  Have you checked the Athearn web site?

Jim

Southern pacific and cotton belt locomotives

My understanding from

Rather see it made here. It

Rather see it made here. It is hard to sell what you don't have.

Rob in Texas

Sat, 2014-06-28 01:35

Made in China?

I'm thinking that this will soon change as manufacturing techniques become less labor intensive ... replacing the Chinese factories with 3-D printing and such ...

Comparative costs

About 8 1/2 years ago I was visiting a family in Mississippi for Christmas, and the husband, who was an engineer for a large American manufacturer, told the following story:  He was researching costs for manufacturing a new model electric blanket, and actually found an American contractor who would build the blankets for less than the Chinese, especially since the shipping costs would be much less.  His management, however, opted not to go with the US company, mostly because they had contracts in place in China.  Short sightedness on the part of the management team rears its ugly head again!  While I"m not an isolationist, I firmly believe that Chinese interests are strictly in favor of the Chinese, and any commerce with the US is necessarily in their favor, not ours.

Paul

I'm not seeing the logic

I'm not seeing the logic there.  3-D printing would only replace the process of molding the various parts.  It's the assembling of the models and adding on all the little detail parts where the labor and cost is.  Stuff is molded here and sent over there to assemble due to the cost of assembling.

Even if 3-D printing is to be the savior of the hobby price problem, I don't think it will be soon - as in the next few years.  Dave Hussey of Cannon and Company recently looked at 3D printing as a possibility for even his parts business actually had some parts made and posted that costs are still far out of reach to make it economical and the parts were too rasterized.  In other words, the too rough looking.  It's a ways off yet.  In fact if you look at Jason Schrons comments about 3-D printing in the next post where I quote him, it's is going to be a "long time", although he believes too it will surely happen.  But don't hold your breath waiting - neither of us can hold our breath long enough.

For the next few years, we'll still be depending on the current process to get our toys from Athearn and others.

Paul, while I don't like it

Paul, while I don't like it any more than you, there have been too many reports of labor costs being the biggest manufacturing cost.  Perhaps I should find some of the frank discussions by Jason Schron of Rapido for you to read - he is down in the nuts and bolts of producing HO trains and can give you a clear picture of why he is still importing their products from China.  Short sightedness didn't seem to enter into it.

As has happened in the past, if China is getting too expensive, and that seems to be the case as it was with Japan and Korea before them, it's going to be a slow rocky transition for companies to find a better place/country to make our toys - a place with low labor costs and business stable friendly etc.

Here is a topic where Jason, who is a manufacturer and deals directly with China and has been there many times, discusses the issue - see page 2 for his comments about labor costs:

http://atlasrescueforum.proboards.com/thread/399/read-rapido-news?page=2

Let me direct you to a story on Rapido's website posted over a year ago, but probably still relevant:

http://www.rapidotrains.com/rapidonews39.html

Quoted from the end of the news feature:

"Moving Production to North America?

I often read on model railroad forums a desire to bring production of ready-to-run model trains back to North America, especially given the rising costs and delays over the last few years in China. Let's look at the reality of that possibility, in the medium term at least.

When I was in the factory, Dennis and I went over some numbers. To make one model of our HO scale Budd "Park" Series dome-observation car takes about 7.5 hours of work, from start to finish. This is the most complex passenger car model we've done to date. The factory pay is roughly 11 RMB (Chinese currency) per hour including labour-associated costs. That means that to make that Park Car cost, in labour, about 82 RMB. This equals $12.90 CAD (Canadian dollars). That does not include tooling costs, material costs, or overhead costs. That is just for labour.

Now let's take that 7.5 hours of labour and bring it over to North America. Here in Ontario, an assembly worker who has the skills to paint, print and assemble a model of this complexity would cost a minimum of $17 per hour. That HO scale Park Car has just cost $127.50 for assembly and decorating.

Now we have to add in: overhead, engineering, all the production machinery, everyone else's salaries, tooling, advertising, travel, and don't forget profit. Also, we would have to finance the infrastructure to actually build/convert a factory in North America and fill it with the necessary machinery to produce model trains. We're talking several million dollars for that alone. If we were making a million Park Cars, that kind of investment would be worthwhile. But seeing as there are fewer than half a million model railroaders in North America (all scales combined), it is not likely that anyone could sell a million HO scale dome observation cars.

Given the economics of the situation and the size of the market, you are probably looking at a retail price of between $400 and $500 for that Canadian-made, plastic HO scale Park Car, which of course would mean we'd only sell 12 of them.

So, if we want to bring production to North America, our options are as follows:

1. Make a barely-detailed model that can be produced in about an hour. The trouble is, then who will pay $99.95 for it? You'd need to charge that much to make your costs back.
    
2. Make a kit. I don't know of any injection-moulded kit that is as complex or has as many parts as our "Park" Series cars. And, unfortunately, the vast majority of model railroaders don't have the time to build an entire fleet of kits, especially when there are ready-to-run alternatives. That means we would never sell enough kits to even cover our tooling costs.

Before you jump in with, "but (Manufacturer X) makes their stuff in North America!" you need to look at how many different ready-to-run models Manufacturer X has produced in the last few years and compare that to the output of the companies that make their models overseas - compare both the complexity and the diversity. Rapido is a tiny company in comparison to most model railroad manufacturers, many of whom have been around for over 50 years. However, in the seven years since I met Dennis this tiny company has managed to bring out: 15 different passenger car styles in two scales; two complete trains including several different locomotives; a revolutionary caboose model; and don't forget those awesome  telephone poles! In the works are new passenger cars, freight cars and locomotives.

I would love to bring production back to North America, and if 3D printing continues to advance to the point where it better resembles a replicator on Star Trek: The Next Generation, then we can certainly bring production back here. It will happen - I am sure of it - just probably not for a long time.

For now, it is simply too expensive to produce a ready-to-run model of Rapido complexity and quality in North America, much as we would want to."

Cost Dynamics

Jim,

The cost of doing business with China is not stable. The dynamics of the Chinese manufacturing requires a constant review. The trend is inflationary and is driven by internal labor costs and issues. The trend could lead to a resurgence in U.S, domestic manufacturing. We could compete, but our education system, individual government subsidies, and general business attitudes all work to prevent this movement from maturing.

The retail price of a imported box car has increased from $6 to $26 in the last 9 years. The other side of the coin is the price that overseas labor pays for our products. Child labor and poor working conditions are wide spread.

We are now the number-one producer of gas in the world, and will soon be the leading producer of oil. The wind generators, government subsidies, and  the EPA did not solve our energy problems. Capitalism and innovation made us energy independent.

I will now step down from my soap box and drive my Ford to work. I wonder how Ford stays in business?

Regards, John ***************************

I am always amazed at all the people who will only tell me why something cannot be done. <> Christopher Columbus

Move elsewhere?

Maybe the answer is to move out of China and into another developing country. 

Rich S

Home of the Teal & Raspberry RR (HO) and the Here N There RR (N) (both under construction)

One of these days I'll be able to run some trains!

Hmmmm.

If parts are manufactured here, i wonder if they should "experiment" and off these locomotives and car as "kits" again, and skip the assembly.  UNLESS, and i'm not saying this is the case, but it could be a possible reason, they WANT to only offer assembled units so they can jack up the price, and labor cost has very little to do with it.

Ken L.

To all of you that wish to

To all of you that wish to quote the labor costs are too high any where other than china, I wish to point out a company called Accurail, made in America.

They make generally some very nicely detailed models at very reasonable prices. I have built several hundred of their kits and find them to be excellent models. They are reasonably priced as well. They employ Americans. Obviously if they can do it other companies could as well.

In addition to labor costs there are also the costs of freight, import taxes, the costs associated with doing business with your management team in the USA and your factory and production and quality control in another part of the world. Yes there are ways to avoid traveling but it is still needed. The easiest ways to avoid all the high costs of assembly would be to design easy to build kits and the modeler could assemble them. 

My hobby shop discounts the kits and has a good supply of them so I could buy a model in the 24.00 to 40.00 price range that is generally ready to disassemble so I can replace couplers, and at tune the trucks and wheels, and add weight or buy one that I can build correctly in the first place.

I have bought some of those higher priced models and they are nice, there are even a few that I have not done anything to. But the option of buying kits at sometimes the rate of three to one appeals to me, and just like the guys from fast tracks say "you get to build it". Many of those more expensive models do not compare to the level of detail that is available on the branch line kits since acquired by atlas. Those kits are available at reasonable prices as well and the blueprint series are not to be confused with shake the box kits but are very well detailed and make great models.

There are ways to be successful in this country. If the big deal is labor on assembling kits in a factory offer the kits to Americans to build themselves and eliminate the labor, and a great deal of the freight and import duty and supply issues.

There may still be some products that are so labor intensive that cheap labor is the driving force as to where it is made but there are alternatives. In decades past America was the place that made things better and cheaper than other places due to refinements in the process and new technology. I hope some day we get back to it. I will try to buy American made prior to made in China if at all possible.

Rob in Texas

Apples to Oranges, Rob

Accurail's kits are "nicely detailed" as you put it, and use tooling that has mostly paid for itself.  They don't require labour to assemble them, so that cost is saved.  Of course, that model works for them.  But for companies like Rapido and others, whose level of detail and challenge of assembly is far more complex, it won't work.  I can't remember which model, but one of Rapido's latest offerings had at least a couple hundred different parts.  While there are still those who love building kits, there are many of us who either don't have the time or the inclination to do so, but still want that museum quality model.  

Now, Rapido could go after a less-detailed market, but that is not what they are known for - the insane level of detail they are producing is what I consider the benchmark for high quality models now.  It is a segment of the model railroading niche, for sure, but it is so far working for them.  To build their models in North America simply would flush their business model down the tubes.  

As has been stated, though, 3D printing technology will eventually allow North American production, but it won't be much for additional labour here - the 3D models will virtually all machine-made.  Only the designers and packagers will be people.

Inflation?

I suspect that India will be the next manufacturing location.

As the Chinese labor prices increase combined with goofy Chinese laws that give the manufacturer of your product ownership of your dies even if they go bankrupt or cease production of your product as has happened in the past and requiring a company to jump through all sorts of "hoops" and red tape to get possession back of dies, I expect to see the next shift in overseas manufacturing to be to India.

The supply problems would

The supply problems would likely be less in India, than China as they have a concept of ownership. I just hate to see things farmed out to other countries, sooner or later there will be no jobs here of any kind and no money to buy anything.

Rob in Texas

Dave

On a similar note I sent an e-mail to one of the sponsors of this fine web site and asked about their manufacturing model. Bowser. I have built some of their models and noticed on their web site that they had a manufacturing facility in PA. I inquired as to what was made in America if anything and what was made else where. No reply yet but I am very hopeful that I can find another line of American Made products to shift my hobby dollars too when ever possible.

As to Rapido's models they are likely not producing anything that I am interested in either due to scale or prototypes so I can not comment on anything that they make, or buy from someone else and put their name on. I have bought some models from Kadee which were ready to run and fine models and very highly detailed. If given the choice between building a kit like the blueprint series from Branchline or buying one that I unpack and hope runs as well as the equipment I build. I will build it every time. Sorry you are missing out on this aspect of the hobby, and I hope the parts of it you are participating in make up for it.

Nice thing about the hobby there are ways for all of us to find the things we like to do best. In my case it is buying lots of older kits from folks that have for one reason or another dropped out or been bought out by others. When the present crop of hobby makers begin offering kits I will start buying from them, otherwise it will be e-bay and train shows so I can buy the things that folks are disposing of from years ago.

Rob in Texas

John, You are preaching to

John, You are preaching to the choir as the say.  Just so you don't miss understand, I didn't quote Jason Shron of Rapido to defend Chinese manufacturing, rather it was to illustrate the major cost differential vs. producing in north America and why it would be cost prohibitive to make his Rapido products here or in Canada.  That being said, the next logical step seems to be to migrate out of China and find a stable site with attractive economic circumstances to loose dependancy on China and the ever increasing costs there, just like we did with Japan and Korea before China.  Anyway, your welcome to your soap box but I don't think I need to be convinced of the basic issues here!

Cheers, Jim

Rob, I've heard Accurail held

Rob,

Rapido doesn't make much I need either as a Canadian manufacturer - in fact I don't own anything Rapido, but I posted info from them as illustrative of the contrast in production cost issues overseas vs. north America.

I've heard Accurail held up as the example so many times in the past 5 or 6 years.  If that model is so successful, then why haven't more jumped on that band wagon?  Just a small guess on my part but apparently there isn't a market enough for kits these days.  Athearn bailed out saying their similarly priced and easy to build bb kits weren't selling while their RTR stuff was flying off the shelves.  I have a few Accurail items myself but the mainly the only freight cars they make I need are a few of their auto racks because no one else makes 70's era auto racks. Otherwise It's Athearn, Atlas, Genesis, ExactRail, Intermountain, Tangent and Walthers who makes most of the 70's and 80's era freight cars I need.  If I were a 40's and 50's era modeler, I'd probably find a lot more use for Accurail assuming I could find some good matches to prototypes among their offerings.

I'm all for rah rah sis boom bah, lets make it in America stuff, but it's not as simple as lets just do it.  Otherwise start up your own HO model company and go for it and show us how it's done.  I suspect it's actually not lucrative.  Why?  I'd argue that the demand for kits is low and the perception that it is higher is due to a relatively small number of vocal people on train forums.  I still see large numbers of kits at train shows for cheap prices as a testiment to the fact that RTR is still what sells mostly.

Jim in Viginia

Kaddee products are still produced in USA

That is not just their couplers, but their freight cars as well. 

Accurail is basically making "shake the box" kits.  Their grab irons, ladders and most details are cast on as part of the mold.  To me that makes them perfect for modular use since the expensive, highly detailed cars get to the train shows with grabs, ladders, brake gear, etc laying in the bottom of the box.  After my experience with taking P2k box cars and Intermountain reefers to train shows, the last thing that I would ever try to take to a train show is an Exactrail car.

The question is

http://model-railroad-hobbyis

http://model-railroad-hobbyist.com/blog/jim-six

There is a nice link to what an accomplished modeler can do with shake the box kits in a very small amount of time. It has lots of info in it from all kinds of folks as it went on for page after page. The more detailed kits are still out there as well. Last month (I think) there was a very nice article on batch building models from kits which is a really nice time saver, it works I have been doing it for quite a while.

Some of it is a time vs skill vs money issue. If you have little time and lack skill buy your stuff ready to go or if you have little time. If you have time and skill and want to maximize your money build it yourself.

If you have a small layout and run short trains 20 or fewer cars ready to run may make sense, 800.00 for cars 500 for loco set 40 for caboose. $1350. for your train. lets change to 750 for loco set 12.00 per car @100 cars and 25.00 for a caboose, and you have to throw in some sweat equity.  Now $1975.00 gets me a 100 car train 3 engines and a caboose and they run well. So 1/2 again as much money and I have 5 times the cars and another sound equipped diesel.

The twelve dollar figure is what I pay for used cars that I build to my standards, it will likely be 15.00 per new car as I can by them at a discount in bulk.

I also like building the kits more than taking apart ready to run and fixing it.

Rob in Texas

bring 'em back I say.

Larry hit the nail square on the head. It's gotten to be an instant gratification lifestyle. Not just trains... Everything. Days of the person sitting down and putting their heart and soul into something are far and few between. Too many people would rather just buy something ready to go and roll with it. I think it could be possible to manufacture in the states again. There's several companies that do it already, so why not?

I was able to tour Micro Engineering factory last month. Yes, it's a small place with a handful of workers. But after seeing the work and knowing that everything they make is made here confirmed that I will be buying from them. If more companies weren't out for everyone's pocket book things would be that much better. Because people go into business for one thing, and that's too make that almighty dollar. Nothing else. So if they can keep costs down on their side by outsourcing the labor and reaping the profits then they have what they want.

Since I've never pre-ordered anything I ask this. When one does the pre-order is there any money changing hands? Deposits? Paid in full?