Atlas Factory Shut Down

jim pastorius posted:

I can't get to weepy about the American companies getting burned by the Chinese. They asked for it so now they pay. These companies, such as they are-sit in the US with a couple of computers and telephones and communicate back & forth with China. They are lazy, take the easy way, make a few bucks and go on to something else. Guess what ??  Suck it up !!  Deal with it !!  Quit crying.

You probably need to talk to Scott Mann of 3rd Rail and find out what doing business in the Far East is like in the real world. From what he's said in the past, the words "difficult, painstaking, often frustrating, and HARD WORK" would seem to describe what the reality is. I knew the guy who owned the late Pecos River models, who had some work done in China, and that's exactly how he described it, too.

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

At Spring York 2017 I made mention to Atlas in their booth about the long delays getting engines manufactured.  They seemed to think it was ok to catalog and deliver 3-4 years later or longer in some cases.  I think the business model has issues if this keeps happening over and over.  No more Atlas engine orders for me, just rolling stock.  They should just stick to rolling stock, as they are pretty good at that!

I was just reading the discussion about this factory closing on the Model Railroading board of Trainorders.com. There is a VERY interesting post from a Jason, of "Rapido Trains", some of his statements are quoted here: "......KK has decided to close Affatech.", and "KK is at retirement age, and his children don't want to take over the business." .

Assuming this is true, about "KK" retiring (whom ever 'KK' is), I wonder why this came as such a surprise to Atlas, Bowser, etc.? Surely there have been discussions about his retirement and closing Affatech previously.

KK is K.K. Ku, originally a manager at Sanda Kan.

A plant closing like this was likely a closely guarded secret.  It won't surprise me that they don't discuss retirement with "outsiders."  The 3 layoffs I went through (survived 2 of them) during my working career were all announced with no prior warnings or even rumors.

Rusty

Two things have dragged Atlas O down...the untimely death of Jim Weaver and the loss of the factory a few years back that now handles Bachmann.  They still have not recovered and any progress has taken very long.  If this factory (and that's a huge if because it remains to be seen) manufacturers O gauge, well....it ain't gonna be good, that's for sure.  BigRail.

GG1 4877 posted:

jim pastorius posted:

I can't get to weepy about the American companies getting burned by the Chinese. They asked for it so now they pay. These companies, such as they are-sit in the US with a couple of computers and telephones and communicate back & forth with China. They are lazy, take the easy way, make a few bucks and go on to something else. Guess what ??  Suck it up !!  Deal with it !!  Quit crying.

Clearly a lesson in economics is required here as well as a lesson on how the model railroad manufacturing process actually works.  Always easy to be an armchair quarterback when one has no knowledge of the subject. 

This is not good news for the industry as a whole.  If Lionel was the topic of this loss of a factory, the discussion would be much different on this forum. 

You'reright! However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

prrhorseshoecurve posted

You're rihri. However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

Watch the rapido  videos and ask yourself who in the American workforce is willing to sit there and remove tiny plastic parts from the sprues all day long......year after year. 

Then has the talent to skillfully assemble the products that would satisfy this rivet counting marketplace...

Korea and China has the talent and that's why it's made there.

Perhaps, following on from a separate thread, this is even more reason to ask Scott to look at doing some GP7/9s, RS1/3s etc?

I'd certainly be in for some!

Will Ebbert posted:

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

You are correct Will. 

One of the challenges with this news is that you are seeing the result of not only a changing demographic in the hobby, but the also in the people who are dedicated to bringing these products to market.  It's a hard business model to succeed in, especially considering the ever changing global economic landscape.  The best product coming to market has been brought to us by people who have had decades in this business and they are not able to find adequate replacements for their retirement.  It's easy to make generalizations about anyone who manages the day to day operations of a factory, but the reality is they are good at what they do from years of experience.  This is true whether it's is China or the US. 

Not from Atlas, but I figure this is worth sharing. 

Plenty of Atlas product on the secondary market to enjoy. If there is a problem Bill will take care of it right away. Atlas will find another MFG. To make their products. The weather is nice...Go out and play. Nick

There is some new in box Atlas O available if you look through all the websites and hobby shops. 

Andrew

Will Ebbert posted:

prrhorseshoecurve posted

You're rihri. However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

Not Quite. The Gp38 and Rs3's were made here! The AlCo RS11, RSD12, and BLW Vo1000 were made in China. The Ultra Line of Freight cars were made here- and subsequently are now called Lionscale.  Some Die cast parts were made in China, but the GP38- Shell, Truck Side Frames, Railings all were made here! The ALCo RS3 Bodies, Frames, and Fuel tank were made here!

prrhorseshoecurve posted:

Will Ebbert posted:

prrhorseshoecurve posted

You're rihri. However Lionel was smart enough to get the former Weaver tooling and mfg in the USA the Lionscale products. I hope they will continue this with expansion of locomotive production of the GP38 and RS3. This will give Lionel a "plan b" back up should they fall into a similar situation.

If I'm not mistaken, Weaver locomotives, passenger cars, and high end freight cars like the Milwaukee Road box cars were all made in China. 

Not Quite. The Gp38 and Rs3's were made here! The AlCo RS11, RSD12, and BLW Vo1000 were made in China. The Ultra Line of Freight cars were made here- and subsequently are now called Lionscale.  Some Die cast parts were made in China, but the GP38- Shell, Truck Side Frames, Railings all were made here! The ALCo RS3 Bodies, Frames, and Fuel tank were made here!

GP 38-2 one of Weaver's last offerings.  Note that the truck side frames are molded plastic attached to metal trucks. 

Weaver RS-3 was also offered late, but had several different drive and detail packages over the years. 

Weaver had a pretty good in house paint and pad printing shop, able to do a lot of their own detail and custom work.  There is or was discussion of the "made in the USA" product detail.  As with a lot of product in the USA there were component percentage rules that detailed the "made in the USA" stamp.  

Nice looking locos. Better than some others I have seen.

jim pastorius posted:

Nice looking locos. Better than some others I have seen.

Only detail that detracts, is the visible motor/electronics in the cab area.  The two pictured had EOB speed control and electro-couplers, though Weaver offered the models several ways, even conventional.   Weaver had the ability to hedge their bets when dealing with foreign production, worse case, they could assemble a product from their own facility.  IMO.  

There are a lot of questions with any business, and when you are dealing with making things in China the questions seem to get more complicated. For example, China is trying to move their country more upscale into high end products rather than just low cost assembly for companies outside the country, and that could make it more difficult to make trains there, finding labor if there is competition from better paying industries, might leave this kind of work to be honest with fly by night piecemeal operators who may not be the most stable of operators. It already is difficult dealing with contracted out manufacturing, SLA's mean pretty much nothing and you can only hope the people on the other end are operating in good faith, and they run into problems with secondary suppliers (hardware, circuit boards, etc).  China right now in many ways is in flux, things are changing (leaving out the whole trade/political situation which isn't really relevant here), and it is going to be reflected in the model the various train manufacturers are using. The thing is, I don't know of another model that is going to work, if China gets too expensive then I suspect you might see trains made in Vietnam or Malaysia or perhaps Africa if low wage production is what they want, or potentially maybe Chinese companies working in Mexico, it already is happening).  

Isn't this the second time Atlas has gotten burned ??

As one door closes... many more open ...  this is only an opportunity.

J Daddy posted:

As one door closes... many more open ...  this is only an opportunity.

I'm sure Atlas and the others could do without such an " opportunity."

Rusty

Speaking of opportunities, I would have like to know about Scott Mann research into the Phillipines some years ago. 

That came up in a conversation I had with Scott and if I remember correctly there was too much fighting between the Phillipino workers and their Korean managers and things just wouldn’t work

jim pastorius posted:

Isn't this the second time Atlas has gotten burned ??

Is that a rhetorical question? The discussion above has made it pretty clear Atlas was among the 70 or so model train companies that lost access to Sanda Kan in 2010 after Kader took over and booted them out.

Dave Funk posted:

Watch the rapido  videos and ask yourself who in the American workforce is willing to sit there and remove tiny plastic parts from the sprues all day long......year after year. 

Then has the talent to skillfully assemble the products that would satisfy this rivet counting marketplace...

Korea and China has the talent and that's why it's made there.

 

 

 

Having spent years in the hobby removing tiny plastic parts from sprues I would say one good way to market O-Scale products might be to return to kits or semi-kits.  Consumers might also appreciate an engine in the $250 range instead of the $450 range even if it meant a lot of detailing would have to be added by the purchaser.  Even if a manufacturer/importer were to offer engines both ways- ready to go out of the box and semi-kit, it might increase overall product sales to help recover development costs while allowing more modelers to have the engine.  Win-win?

Bill Chaplik posted: 

 

Having spent years in the hobby removing tiny plastic parts from sprues I would say one good way to market O-Scale products might be to return to kits or semi-kits.  Consumers might also appreciate an engine in the $250 range instead of the $450 range even if it meant a lot of detailing would have to be added by the purchaser.  Even if a manufacturer/importer were to offer engines both ways- ready to go out of the box and semi-kit, it might increase overall product sales to help recover development costs while allowing more modelers to have the engine.  Win-win?

I'd love rolling stock kits along the line of old Blue box Athearn HO kits. I'd even build great quality locos minus electronics.....easy to buy from folks like Dallee. 

Disclaimer: I've been accused of being on the lunatic fringe of both the model train and model car hobby.....so who knows. 

AMCDave posted:

Bill Chaplik posted: 

 

Having spent years in the hobby removing tiny plastic parts from sprues I would say one good way to market O-Scale products might be to return to kits or semi-kits.  Consumers might also appreciate an engine in the $250 range instead of the $450 range even if it meant a lot of detailing would have to be added by the purchaser.  Even if a manufacturer/importer were to offer engines both ways- ready to go out of the box and semi-kit, it might increase overall product sales to help recover development costs while allowing more modelers to have the engine.  Win-win?

I'd love rolling stock kits along the line of old Blue box Athearn HO kits. I'd even build great quality locos minus electronics.....easy to buy from folks like Dallee. 

Disclaimer:I've been accused of being on the lunatic fringe of both the model train and model car hobby.....so who knows. 

Take heart, fellow fringe-friend!  We are not alone!  We may even be legion!

Among my favorite quotations..."There is a correlation between the creative and the screwball.  So we must suffer the screwball gladly!".....Kingman Brewster Jr. (American educator/diplomat)

KD

Agree with the kit concept.  Built quite a few Heathkit and Lafayette products in the past.  Still build plastic models. 

Williams used to market engine kits.  Have a GG1 from that era.

My initial thought regarding Bill's "let them have kits" response above was "heck no" but; I have to admit that after pondering this for a bit; I have concluded it would actually be fun to occasionally assemble cars or engines from kits.  Like many on here; I grew up in the era when we assembled model ships, planes and cars.  I can remember some of the aircraft and particularly the ships had a tremendous number of small detail parts that had to be removed from sprues and added to the model.  And in retrospect; it was all quality time!

Since my layout has more or less been completed for a number of years; I have started to find enjoyment in some minor weathering and detailing of rolling stock so; assembling rolling stock and locomotive kits seems like a logical next step in that progression.

Curt

Although engine kits or semi kits sounds like a good idea I'm not sure it would sell. 

Very few people do kits of any kind.

But I would like to see the mfg. give it a try. Maybe just a detail kit for a locomotive that the mfg. builds without the details added, hence a cheaper locomotive to buy.

Dave

I received an email from an HO mail order dealer listing the companies affected and their response. Looks like the only O gauge importer affected may be Atlas. Also the main driver behind the shutdown was increasing labor shortages and cost.

Here's the bulk of the email. It addresses the affect on HO production and doesn't say anything directly about O.

In case you haven’t already heard, a large Chinese suppler of model trains just closed its doors, not for lack of orders but lack of labor and escalating costs:  This will affect most manufactures, Atlas and Bowser say this affects all products announced since January 2018, Fox Valley says most all of their new products, Walthers and Rapido say this does not affect them, they have been transferring production to other factories, we may learn more next month that the National Train Show in Kansas City, MO August 5-12^th, if you’re going to the show let us know what you hear.

Atlas has received notification from one of our locomotive and rolling stock suppliers that they have closed their factory. (Please note Atlas track and accessories are NOT affected by this delay.) Atlas is currently working with our network of suppliers to transfer the projects to others for completion. This will cause a delay in some previously ordered products. We apologize for this delay, thank you for your continued support, and will update you with more information as it becomes available. 

Bowser says this will affect future product, more information to follow, they have removed projected delivery dates for all projects from their website till they have more information.

Fox Valley: Over the weekend, news broke that a large supplier of model trains in China has closed its doors. Fox Valley Models has used this factory for a large portion of our products. As of today, there is no clear path that will resume production in short order, or an easy way to move projects. With this news, we must reluctantly list all previously announced products as Postponed/Cancelled. If projects can be moved, it will take a number of months to do so, and then get a new factory up to speed on our projects will take even more time. We will keep all previously recorded pre-orders on file. If a resolution presents itself over the next few months, we will reconfirm specific projects as they get close (well into next year at best). If this process takes and extended time, it may be best to re-announce each project. 

Intermountain railway company has become aware that our sole supplier in China has discontinued business without warning.  This will result in our not having any new product releases for an undetermined period of time.  Our expectation is that we will begin shipping a selection of new product within four months.  Please be assured that Intermountain is dedicated to continuing to produce our high quality product line.  Purchase orders with alternate vendors are already being arranged so we anticipate production to resume very soon.

Rapido has been shifting production to a new factory in Guangxi province and is ramping up production, says it takes time to train all of the new people, and models only leave the factory if they are at the required Rapido quality level. It's been a difficult transition period as the Rapido factory has moved twice in the last year, but we're almost through it. Training new people is nothing new. The problem with the last location is that we couldn't keep people more than a few weeks due to the labor shortage in the area. We were always having to train new people. At least now when we train them, they will stay for longer!  Previously:  The vast majority of the world's model trains are made in Dongguan, China. That is where Sanda Kan and Kader had their factories, and that is where the global expertise in model train manufacturing is centered. As I discuss in our most recent video, the rising costs in southern China mean that it is becoming difficult to make model trains there. Our prices are creeping up, but the costs are going up far more quickly.

Walthers says this does not affect any Walthers brand items i.e. Proto, Cornerstone, Mainline, SceneMaster, etc., but that Shinorhara track will be discontinued and replaced with Walthers code 83.

Ken

Another part of the hobby, I had an older SW9, that had Dallee Electronics and Sound.  Poor at best.  I managed to acquire Used parts, and TMCC electronics from different sources.  The rebuild was time consuming, it was fortunate that I had other SW9's to model/check wiring and spacing.  Eventually the model came together and works as well as my other Atlas SW9.  IMO few in the hobby would spend this time on a model.  

I spent some time, with a dremel tool, to carefully install a better speaker in the fuel tank area.  Atlas supplied the speaker speaker screen, and some other parts I needed. 

 I carefully removed the speaker mounts from inside the hood area, and installed a used TAS, TMCC assembly.  I also changed the lamps to 18 volt, and have some work to do installing the run/program switch and  Sound/No Sound switch.  I also added the electro-couplers and covers, which required some under-frame adjustment. 

Electro-coupler installed. 

Antenna needs to be installed inside the plastic cab, mounted to the roof. Was done with a small piece of copper sheet installed on the ceiling of the cab.  A wire connected the copper sheet to the PC board. 

Good bit of work to be done/complete/ it operates well.

When TAS did these Dallee upgrades many years ago, they were using new frames from Atlas, which at the very least allowed for the speaker in the fuel tank.  I did some modification to the front and rear truck mounts as well as the coupler swing area to mount the electro-couplers.  The mounts inside the front hood area also have to be removed. 

ERR is a smaller package.

I did run the Dallee unit briefly.  IMO, speaker quality was poor compared to my other Atlas SW9's. Pictured round speaker is an Atlas replacement.  

The used TAS board was missing the front and rear aluminum mounts, when I got it.  Atlas supplied new mounting post and all the screws

I'd love kits, but all the grab irons and parts would still need to be factory painted leaving only installation for the modeler which, while enjoyable, probably wouldn't cut out as much cost as most would like for all that work. 

david1 posted:

Although engine kits or semi kits sounds like a good idea I'm not sure it would sell. 

Very few people do kits of any kind.

But I would like to see the mfg. give it a try. Maybe just a detail kit for a locomotive that the mfg. builds without the details added, hence a cheaper locomotive to buy.

Dave

I might agree with questionable consumer acceptance of a return to kits.  Our (LHS) own sales in model railroading and other hobby branches....like RC airplanes, drones, boats, helicopters, etc., etc....says that the typical hobby consumer has become less inclined to build.  And even though the long-ago relatively cheap prices of factory-assembled items have crept up to eye-popping levels in the past few years, the desire to hone one's own skills...maybe left dormant for those 20 years, or so...has gone bye-bye probably forever for many of those folks.

But, I've long been of the understanding that China government/manufacturing 'policy' has strongly resisted the manufacture and selling of parts/kits under the premise that it leaves open the possibility of someone else, some other nationality, assembling/selling the parts into a higher order product to compete with them.  I am, for instance, aware of some model railroad r-t-r items (esp. locomotives) made exclusively for a large U.S. distributor whose only recourse for providing warranty parts/repairs is to cannibalize a reserved supply of complete assemblies.

Perhaps this policy/practice has changed or been relaxed more recently, but it might be a hurdle yet to be crossed in offering 'some assembly required' options?

Then, again, I've been away from the old lines of this sort of international market/manufacturing communication for several blissful years now......so what the heck do I know? 

I yield to them that do know.

KD

Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

GregR posted:

Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

Job-loss in China is of no relevance to this discussion. Nor do I care.

Job-loss in the US is a bit more relevant, if yesterday's news, but I've quit caring about that, too, as a nation that won't do the work is not to be admired.

GregR posted:

Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

It's a matter of looking at the big picture. There is still a ton of manufacturing done in America, but what is done here is highly automated. Model train manufacturing is extremely difficult to automate, and labor costs are too high here. The retail price of model railroad rolling stock would probably rise by a factor of four (at a minimum) if it was manufactured here. That's not a viable business model and we need to understand that.

Jeff C

For those who think locomotive models in kit form would save big money, guess again. The cost is in designing the models, tooling up for a project and manufacturing the parts. Assembly accounts for a fraction of the costs — likely less than 15 percent.

And even that savings is questionable, given the labor costs that would be required to package individual components from various sources. 

GregR posted:

Will Ebbert posted:

And let's not forget that this factory shut down for a lot of people is more than a couple delayed trains. It means people don't have jobs to provide for their families. 

Let’s not also forget that when production moved to China, that many Americans lost the means to provide for their families. 

As already stated, Atlas O never made products in America to begin with so this is a moot point here.