The model train industry's future

The model train industry's future

Postby ConducTTor » Sat Feb 04, 2017 1:36 pm

For those of you not on Rapido's mailing list, here is an excerpt from the latest Rapido news:

"The Hobby and International Trade

For the student of international relations, the last few months have certainly been interesting. I'm sure the academics will be able to devote entire textbooks to the political upheaval that took place around the world in 2016. But for a business owner, it's been a bit terrifying.

I was recently asked by a UK magazine if I felt that either Brexit or the election of President Trump has affected my business. I responded simply by saying "I like stability." Since Brexit, the British pound lost 20% of its value. This made two of our projects instantly unprofitable. One is still going ahead (the N scale Pendolino - I hope you ordered yours as the deadline was on Tuesday!) but the other project has been "paused," and I can't honestly say for how long.

The possibility of stiff tariffs being imposed on imports from China to the United States is another thing that has all of us model train manufacturers worried. I understand and respect the desire to balance the trade deficit between the United States and its trading partners. But model trains have primarily been built in China since the 1980s.

The core of the industry - and thus the talent and experience - has been based in Guangdong province in southern China for over 30 years. We can't bring these jobs back to Canada and the United States because they were never here to begin with. Here's why:

In recent years our hobby has evolved from shake-the-box kits to museum-quality models with incredible, prototype-specific detail. This has only been possible due to the talents of the very experienced engineers in the model train factories combined with a much lower cost of labour in China than in North America. It takes about eight hours of work to trim, paint, print, assemble, test and package a typical Rapido model. Obviously it will never be cost effective to do that assembly work in Canada at $15/hour. The assembly cost alone of a $110 retail model would be $120!

As it is, we in the model train industry have had to work with tighter and tighter margins. The amazing detail comes with a price, and the cost of living in China has tripled over the last 12 years. That means our assembly costs have tripled. But our retail prices have not. In fact, our locomotives are roughly the same prices as they were in 2011.

Do I support the drive on both sides of the border for better, well-paying jobs for Canadians and Americans? Absolutely. Do I support kneecapping a niche industry through punitive tariffs which will NOT result in these models EVER being made in North America? Absolutely not.

So yes, I am slightly terrified. Rapido makes trains for three different markets and not just the United States. But we are deeply committed to our American customers and our line of American models. I honestly don't know what the future will bring. A high tariff on imported hobby products would shut down every hobby shop in the USA. I hope that sober thought will prevail and our industry won't end up as collateral damage in a trade war."
What people think: "liberals/conservatives are ruining my country"
What the powerful know: divide and conquer
User avatar
ConducTTor
Site Admin
 
Posts: 8293
Images: 13
Joined: Sat May 23, 2009 4:52 pm
Location: Atlanta GA USA

Re: The model train industry's future

Postby ctxmf74 » Sat Feb 04, 2017 2:39 pm

"and the cost of living in China has tripled over the last 12 years."

That's the right way to balance trade. Make everything where it can be most efficiently built letting the workers share in the profits......DaveB
ctxmf74
 
Posts: 702
Images: 32
Joined: Tue Jan 05, 2010 12:25 am

Re: The model train industry's future

Postby krokodil » Sat Feb 04, 2017 3:06 pm

It takes about eight hours of work to trim, paint, print, assemble, test and package a typical Rapido model. Obviously it will never be cost effective to do that assembly work in Canada at $15/hour.


This calculation seems to be not correct. If this would be correct the production of such model will be just about 240 units/year. I understood the there are many steps in production but the overall time for assembling of a single model cannot be that long. If yes, you should think about improvement in production.

Otherwise I agree with your conclusion. We are getting older, the quality requirements are extremely high, ie most of the model are for children out of reach.
Greetings from Austria
E.T.
User avatar
krokodil
 
Posts: 444
Joined: Tue Jan 29, 2013 6:46 pm

Re: The model train industry's future

Postby Bernd » Sat Feb 04, 2017 3:41 pm

I don't see how that will hurt Rapido. Why? They don't import to the US from China. They import to Canada. Then from Canada to the US. How do I know this. I ordered two diesel rail cars. The address is from Canada not China.

Now as far as jobs go. If people finally get good paying jobs here like they did before factories moved to China, then they can afford products made in the US of A. One major problem is Union pay scale. You can't expect a secretary making $15.00 an hour to pay for a car from a union factory worker making $30.00 (guesstimate).

Don't get me going on this because I'm libel to get kicked off the forum if I really tell you what's on my mind. This is all I'm going to say on this subject.

Bernd
Image
User avatar
Bernd
 
Posts: 839
Images: 27
Joined: Wed Sep 02, 2015 8:43 am
Location: Rochester, New York

Re: The model train industry's future

Postby ctxmf74 » Sat Feb 04, 2017 4:26 pm

"I don't see how that will hurt Rapido. Why? They don't import to the US from China."

Any artificial barriers to free trade will hurt folks trying to sell stuff internationally. If the US tariffs hurt their Chinese suppliers Rapid will suffer along with the Chinese builders and the US consumers.Universal efficiency is the key to sustainable low prices.......DaveB
ctxmf74
 
Posts: 702
Images: 32
Joined: Tue Jan 05, 2010 12:25 am

Re: The model train industry's future

Postby ConnRiver » Sun Feb 05, 2017 11:46 am

So, what does this mean for those of us who "practice" TT scale? We don't expect Athearn-like super detail (and prices), do we?

Is there a wedge here for our scale? 1 - Would Micro-Trains level detail be acceptable for current and future TT scale modelers? 2 - For those of us who are exploring home shop injection molding who might have to begin by offering products as flat kits as we climb the learning curve, are we dead before we begin?

-Brian C.
Cedar Rapids, Iowa
Brian Chapman
Cedar Rapids, Iowa / USA
ConnRiver
 
Posts: 428
Joined: Tue Sep 15, 2009 10:51 am
Location: Cedar Rapids, Iowa / USA

Re: The model train industry's future

Postby ConducTTor » Sun Feb 05, 2017 12:05 pm

Actually this may be a good thing for tt. If prices of everything else go up, suddenly prices for small volume tt stuff become more attractive...I don't know of anyone producing NA tt in China. Well perhaps the Lok n Roll (Gold Coast) boxcars.
What people think: "liberals/conservatives are ruining my country"
What the powerful know: divide and conquer
User avatar
ConducTTor
Site Admin
 
Posts: 8293
Images: 13
Joined: Sat May 23, 2009 4:52 pm
Location: Atlanta GA USA

Re: The model train industry's future

Postby areibel » Sun Feb 05, 2017 12:33 pm

ConnRiver wrote:Is there a wedge here for our scale? 1 - Would Micro-Trains level detail be acceptable for current and future TT scale modelers? 2 - For those of us who are exploring home shop injection molding who might have to begin by offering products as flat kits as we climb the learning curve, are we dead before we begin?


I think ANYTHING produced in TT is a good thing, regardless of how basic it may be. Flat kits can be built to your own personal preference. If it's basic that might be fine for 80% of the guys out there, just glue it together. The other 20% can add or change details to suit their own taste. Look at the Shapeways cars out there, a little extra work and they can be fantastic models (check out MacG's video and you can see several examples). It beats the heck out of trying to start with a flat piece of styrene or an old HP Products kit. You can build great models out of them but it ain't easy!
I think that would be the same for something like the Microtrains freight cars. They're fine out of the box, I have a couple "N" friends that want to operate their railroads. Probably 90% of their rolling stock (cars and locomotives) are straight out of the box and right to the layout as long as they come with a Microtrains compatible coupler. If they buy anything older they will change out the couplers and maybe wheelsets but that's about it. I'm sure the same is true in HO, most guys want to run and don't get too concerned with building their own fleet to match prototype details. Right now we don't even have the basics, a 50 foot boxcar and some other suitable freight cars would be welcomed!
areibel
 
Posts: 1701
Images: 7
Joined: Fri Jun 12, 2009 10:12 am
Location: Cambridge Springs PA

Re: The model train industry's future

Postby ctxmf74 » Sun Feb 05, 2017 2:32 pm

"Would Micro-Trains level detail be acceptable for current and future TT scale modelers? "

I'd say MTL quality TT trains would sell a ton. Considering all the models they make in N scale it' seems like they'd try one model in TT to see how it sells? Given equal supply I'd bet TT would outsell N scale.....DaveB
ctxmf74
 
Posts: 702
Images: 32
Joined: Tue Jan 05, 2010 12:25 am

Re: The model train industry's future

Postby ConducTTor » Sun Feb 05, 2017 6:12 pm

I posted this because I thought it would be of interest to have some insight into the thinking of at least 1 business in the model train industry (because it's the only one I've seen so far). Weather or not any of us agree with Rapido's point of view, does not matter. I would love to know what others are thinking (Athearn, Kato, Walthers, etc.). Not because I care if their political views align with mine but because I'd like some insight into the industry's thinking so I can deduce if the general situation is helpful for tt or not. So, let's keep politics out of it.
What people think: "liberals/conservatives are ruining my country"
What the powerful know: divide and conquer
User avatar
ConducTTor
Site Admin
 
Posts: 8293
Images: 13
Joined: Sat May 23, 2009 4:52 pm
Location: Atlanta GA USA

Next

Return to General Discussion

Who is online

Users browsing this forum: No registered users and 0 guests

cron