3rd Rail - Sunset Models and China Factories Closing

Scott,

Great thread!



Allan,

I do think readers would be interested in this. There is a small buzz in the shop about this.

Dave

Scott,

Great story. My favorite model of all time is the Sunset FEF. Bravo for that project. Keep up the great work and please pass my sentiment along to your team of hard working artists.

This really has been one of the more educational threads on here and I appreciate the info, Scott. I's nice to have an importer actually chime in here and debunk a lot of speculation and assumptions...

Brian

It sure is nice. There is a great deal of ... myths regarding China and I am guilty of a few.

I don't mind Weaver doing a bit in Plastic as long they are weighted and can pull. The recent Wagontop Boxcar showed what Weaver was capable of.

Between Sunset and Weaver I think eventually most of the needs (Actually wants) can be met in time.

There is a lot of this type of business still, in Back street, cash only, America if you look. IMO. Very interesting thread Scott.
I assume you don't have to send each vendor a 1099 that tells the Gov. how much you paid each vendor or maybe the Chinese Gov. requires this also?

Scott,

really interesting stuff .

Pasted a lot of it to read to my computerless club members.

And thank you Scott as a long time supporter;

Actually, was an HO dealer of your father's in 1978.

Dallas Brass

Stan

Wow! Very interesting thread! Sent in an order for one of the ATSF 2900's and an Espee Daylight GS4!

 

Thanks Scott!

 

 

Weaver does produce items and roadnames nobody else makes.  I love how they paint their stuff.  They also make BX boxcars for passenger/express/mail service.

As an example of doing things here; there has been an effort to produce an extruded O Scale passenger car here in America that the machining company that would be doing the cutting out the windows/etc from the extrusion wants $240 PER CAR just for that work.  That does not include the cost of the extrusion or anything else. 

Comment here about $240 to punch windows in an O scale extrusion....wonder what Phoenix did to produce their extruded? series of passenger cars?  I managed to get a couple from a "dealer" set up at Wheaton once, with a shop in the Chicago area, and also talked to one of the people involved with Phoenix who also was at that show once, all several years ago.

Then POOF!, Phoenix has disappeared, to be found occasionally on eBay.  Also, the

"New Marx" was touted to be American made, but I don't think its founder, James

Flynn, is any longer associated with it...I'd like to know the production

histories of both those companies...as far as that goes, how did K-Line screw up

so royally?  What is Maury Klein doing now?

Scott,

Thanks for your insight on production in Asia; I lived in Japan years ago and traveled extensively---I understand the reward and the risk!     We import high end carpets from India, Pakistan and Nepal---it is not easy working with nations in that area.

 

That said, they have many talented artisans and dedicated craftsman.

 

Wishing you continued success

1.  New Marx was made in the U.S.  The Flynns are no longer associated with it.

 

2.  K-Line got in too far, too fast, and ultimately couldn't keep its head above water (meaning $ owed to suppliers).

 

3.  Maury D. Klein operates a UPS store in North Carolina.

I want to again thank Scott Mann for his most informative and illuminating posts on this topic.

Was somebody "suppose" to restart New Marx/Ameritrains?

Here's a thought....if the USA is looked so highly upon as the golden land of opportunity, why aren't some the enterprising Koreans or Chinese seting up shops here?  You would be closer to your biggest customer (currently) and there would be no suprise "raids"or closures by the govt.  Shipping cost would be nil too!    

 

It must be enviromental or tax laws that seem (to me) to be very lacking over there which are holding them back???

I think the "Land of Opportunity" you are referring to, for making a company in the US, applies to new business, VC funding opportunities, easier lending and protection of IP.  Once a business is established here, they quickly search for ways of cutting costs, and moving the lower skilled labor overseas(example, APPLE).

 

As for the Korean's moving closer to their customer.... 1. They can fly 40 minutes to Qingdao and set up shop where labor is cheap, and living is relatively inexpensive and close to home, and there are vendors and support facilities within reach,  or they can fly 12 hours to the US. 

 

Again, the model train business, at least the end that we are producing in, is a cottage industry and basically run by artistans not industrial engineers in small, simple facilities.

 

Guys, there are 600,000,000 (600 Million)  Chinese entering the middle class. SELL SOMETHING TO THEM.... They want to buy US goods. They know their own stuff is poor quality and US good are the best quality.  I know several people just in my neighborhood that have linked up with Chinese Nationals and are sending containers of US made goods (Wine, Clothing, Shoes, Hi End Stuff) over for a profit.

 

I just saw on the news, the average Chinese tourist spends $6000 when they visit the US. Over 1.5 million visits were recored in 2011 and we are making it easier for them to come over on a tourist visa. Welcome them to your town... Get them to come over more... There is money to be made, jobs created. 

 

Think out of the box.

 

Scott

You may want to also look at student visa.  And temporary work visa.   My youngest son-in-law is completing a Master Program at Carnegie Mellon in Computer Science. You should check out his Friends list on Facebook. There is very seldom a name on that list that is American.   Many, many Indian and those not Indian are Asian.  All very very smart and hard working.  Somewhere before the economic downturn there was always interesting talk in the Pittsburgh Post Gazette about High Tech Green Cards that varied from 90,000 to 120,000 people.  Not model train assembly workers, six figure saleries.  There are here because they like living here but could easily take themselves and their knowledge elsewhere.

What about India.....   I work with about 11 suppliers all over the country who weave custom carpets for us; I am emailing our agent to look into brass production....

saw this in the san diego paper.

 

http://www.utsandiego.com/news...-way-back-to-the-us/

This was on CNN's website this morning concerning "Factory Nostalgia":

 

http://www.cnn.com/2012/02/17/...ndex.html?hpt=hp_bn9

Thanks Scott! Very interesting.

Scott I take my hat of to you for  doing what you do.  Knowing how the system works over there keeps me grounded on why things take so long.  You should write a book if you can find the time.  I appreciate the CB&Q models I have even more now that I read your story.  Doing business there is like riding over a wooden trestle while the timbers are crumbling down below, and staying one step ahead of a total collapse. 

Very ineresting.  The same factory issues plus changes in the Chinese work force have harmed the diecast car industry...Franklin Mint...Danbury Mint both had popular lines of cars that have discontinued.  I have heard stories that Chinese now are growing up without the knowledge of ancient hand crafts and that was part of the "plus" to having models made in China.  They all want ipads and stuff and the work force is demanding more $$$

Could China implode?

I think there is a very real possibility of China imploding economically.   Even with all the money we send them the government is deficit spending and subsidizing at least as bad as we are on infrastructure and green tech and really stupid stuff like aircraft carriers.  Their problem is their accounting structures are so bad by the time they know it's time to stop it will be way too late.

 

moving closer to their customer.... 1. They can fly 40 minutes to Qingdao and set up shop where labor is cheap, and living is relatively inexpensive and close to home, and there are vendors and support facilities within reach,

The same can be said for Mexico here. The parts can be made in Mexico and shipped across the border to be assembled by American folks here, many big companies are doing it now under NAFTA.

Scott, have you ever thought of inviting some of these designers and engineers over here for an excursion ride behind one of the steam engines they build models of? Just a thought.

Up until 10 years ago Steam engines were common place in China. Now you don't see them except in a museum in China

 

Will China implode? No, but they will contract. They have such a huge middle class now, buying everything made here and abroad. I know several people working with Chinese importers shipping containers of goods from the US for consumption in China. It's a good business.

 

But the high paced growth cannot be sustained. And the wage increases of 20 -25% per year are forcing many companies to go further out to find cheap labor. The Philippenes, Malasia, Indonesia are where fast moving companies are turning for labor. A growning number of Korea companies are forming in the Philippenes.  One such company is Boo Rim, famous for very high end brass. Another is a not so well known company, that I buy trains from. Soon you will see, Made in the Philippenes on our boxes.

 

Will I spend my money to bring workers over to the US to visit and study steam up close, no?  Each time I have seen this, they very carefully plan their own itineraries to visit competitors and find new business apart from me. So I will not support that. Each time an importer invites a builder to a show with them, I think to myself, what a fool as I watch their guest walking around passing out business cards.

 

Back to China's Economy:

Just from watching CNN I learned that the local governments in China collectively owe the central government over 2 Trillion US$. That is what paid for all the infrastructure, roads, skyscrapers etc. A lot of this money was pocketed by local officials who then moved to the US under the new Green Card act (invest 500K in the US and get a green card). Even here on local TV they show 60% of wealthy Chinese live abroad. And the rest want to.  So now the remaining officials are taxing the >%&# out of small foreign owned businesses. I have heard many stories about tax audit after tax audit to collect monies. There is no due process, no lawyers, only payoffs and paperwork. So many of these small companies are moving or closing. It is anti business there now.

Scott, I just order your VA. 2-10-10-2. The check will go out tomorrow-9-13-12. When it came out, I couldn't get it then (was reserved), but I am getting it now!  I called your secretary today. I am glad some models are still around in 2-rail.

That should be "ordered". What is the weight of this beast?

I would rather buy American made products. I bought a Ford pickup instead of a Toyota for just that reason.  Probably won't make that mistake again.

 

We lost our manufacturing base, and lost a huge chunk of what we call the middle class at the same time.  We need a middle class to make this work - i have no idea how we regenerate a middle class. As a loyal ALPA member, I could hazard a guess . . .

 

I know how to build locomotive models.  If I thought I could make even a slight profit, I would roll out kits for a Hariman 0-6-0 of the "drop the box" variety - all the hard work done.  But at the quantities I would guess at, it would be all hand work, and I would lose my shirt at a grand each.

 

So we will continue to seek the lowest labor cost, and use our American ingenuity to fill out paperwork.  I guess.  

 

One of my flight students off-shored a lot of his work two years ago.  He now makes monthly flights to the Phillipines.  I guess he beat Scott.  He does not make trains.

hello bob2.............

I have a 1970 ford F-100 and i still drive it to this day and its 42 years old!!!!!!!!! and pure american made truck (has "made in USA " metal tag riveted to the door jam) 390, C-6, 9 inch and long bed and still has its orginal  hub caps on it.  I don't want to deal with very expensive to repair late model computer junk auto companies put in their cars and trucks now days. I must have at least half million miles on it by now and the 390 was rebuild while ago.  I think the sunset 3rd engines are made in Korea ? I just put a deposit on one 

 

the woman who loves toy trains

Tiffany 

You are going to love the Sunset model.   It is extremely well made, and you would have to double your investment to get even a slightly better model.

 

I have two Mustang convertibles - 1964 and 1966.  They are superb, easy to fix, and run for hundreds of thousands of miles between major repairs.  I have a 1946 Piper Cub that runs even better.

 

Things have changed.  The fuel pump in my Mustang can be repaired with a $20 kit.  The fuel pump in my 2003 Ranger went out at 33000 miles, and cost just shy of a grand to replace.  The Ranger has a General Electronics Module, and if it ever goes out the truck is probably junk.  It got a $3000 transmission overhaul at 31,000 miles.  I have learned my lesson.  My wife drives a BMW 6- series.  Trouble-free.

 

Rest assured, what has happened to Fords has not happened to most Sunset imports.  They make mistakes now and then, but these ATSF models are top drawer.

I'm sorry, but you can't compare model train manufacturing to autombiles or aircraft.

 

In anything made anywhere, some people will swear by an item, others will swear at it.  I had a 1976 Chevy Blazer that I unleashed my longshoreman's dictionary on quite often, yet my 79 Malibu was virtually indestructible.

 

And, I have some good old Michigan-made Lionel/American Flyer that is nothing but junk, but  how that relates to the auto industry is questionable.

 

Rusty

You do know that both were made by our friends in the UAW, ...right?

 

...pick one. 

 

KD

Yes, I do. 

 

Plus, I knew one of the product engineers during that period.

 

My point is folks tend to go on and on about the good stuff made back then, but don't seem to recall things that didn't work well.

 

Rusty

I don't think people go on and on about good stuff made in the 1970s and 1980s.  Good stuff is generally the exception.  But 1950s Lionel is well made.  Made-in-America was a sign of quality as Made-in-West Germany became later.  Packards were World-Class, the SS United States was the fastest and likely "finest" ocean liner.  The Class J was arguably the "greatest" passenger locomotive.  Tailored clothing was mass-produced but of superb quality made to last decades.  Etc.  Americans used to care about quality, and not so much about price.

From what I've seen, most 1950s Lionel stuff was die-cast with a screw-in lamp, a simple horn, and not much detail, that's it.  Cars, planes, ships, etc were sturdily built and heavy for the most part.  My dad had a Ford truck made out of 10 gauge sheet metal (over 1/8" thick).  I was watching a show on the B-17 this morning and one of the speakers said it was built like a truss-bridge underneath the thin sheet metal skin.

 

I don't recall the clothing I wore as a kid, but I'm sure there wasn't the wide variety of choices we have now.  Just look at how many different styles of Dockers pants there are today.

 

Today everything is electronics driven.  At the rapid pace in which electronics is developing, what was new yesterday is out-dated within a short time.

 

Everything is designed by computer that does computations much faster than a human can do.  Today robots build autos that used to be built by humans on an assembly line.

 

I think it all comes down to people wanting more choices...the more choices we want, the more watered-down the product will be and the more expensive it will become.