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My chat with Ryan:

Note that I am paraphrasing, so please take this into account.

  1. Ryan DOES read the OGR S scale board here. A good thing!
  2. Tooling costs vs. run size is always an issue (or rather THE issue).
  3. The SD40 is a real possibility – many RR names and configurations possible based upon the same tooling. The SD40 was used over a broad historical period down to the present day, thus its use is prototypically possible with many types and periods of rolling stock. Ryan very much likes the prototype.
  4. Not much hope was offered for the production of a matched set of passenger cars for the Frisco Northern. Considerably more orders would be required for the cars than are probably going to be realized for the engine. The production run required to be economically viable is likely to considerably exceed the preorders for the engine itself. A set of green Pullmans is a much more likely proposition in the future because of their universality.
  5. A GS-4 (and engines like it) is not in the cards. Numbers are going to be too small in the S scale market because one can place only one road name on the engine. A scale Hudson, say, is more likely in the future because one could place several railroad names on it even though one would not have strict prototypical accuracy … many RRs such as SF had 4-6-4s. The Y3 was made, in large part, because many RRs had them.
  6. An ‘improved’ Berk with Legacy is still a strong possibility. The critical tooling now exists.
  7. Once again, I raised the notion of deleting the coupler on the front PA of a set and restoring the closed pilot of the Gilbert 1950 configuration for improved ‘looks’. Ryan liked the suggestion.

Not part of my chat with Ryan, but impressions gained by other discussions with Lionel staff and observations:

  1. There still appears to be confusion on Lionel’s part about the low desirability of fantasy versions (all kinds) of rolling stock for the S gauge market. Branded versions of rolling stock, zombie cars, fantasy schemes on the cylindrical hoppers, etc., etc., etc. There is a strong tendency to continue to confuse the root desires of the S gauge and the O gauge markets. A related example … the waffle-side boxcars are not selling well (they are already being blown out by Charles Ro for $33 at York), which might have been avoided had the car been made a scale 50 or 60 ft. long.
  2. My strong impression is that Lionel continues to be in a quandary about newly tooled contemporary rolling stock ... the problem of tooling cost vs. sales volume again. My personal view that emerges from conversations with them is that the Lionel folks still can’t quite come to grips with the strong likelihood that they sabotaged their efforts and preorder count with the mechanical reefer with the truck/coupler snafu (and too many fantasy schemes) on the cylindrical hoppers. I reminded the folks that sales of the modern diesels are coupled (literally) to the availability of modern rolling stock to put behind them.
  3. Tooling costs vs. run size is always an issue. While undeniably true, it is thrown up first as continuing mantra almost to the point of being a bit condescending IMHO and as a default to do nothing. If you don’t understand your market (see above) however, expensive mistakes are made.

Have at it. 

Bob

 

Last edited by Bob Bubeck
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Bob:

Thank you for this analysis/opinion.  It is very helpful for us to know the mindset of Lionel.  I would like to applaud Lionel for its efforts to bring new product to the S gauge community.  The motive power they have introduced has been welcomed by me and for the most part has been of quality production.  At this time, Lionel has exhibited a support for S that MTH has not.

 As you have mentioned, the stumbling block is their O gauge (not scale) mindset.  American Flyer was introduced and produced primarily as a more scale oriented product while Lionel had taken the more "toy" tact.  As others have offered, it would be well for Lionel to talk to the S community so they may know their audience better.  Even as AF Gilbert,  or Hi-rail the propensity of the S market is still in the realm of reaasm rather than fantasy.  Hopefully, we will merge our expectations and put S on the track of success and growth.

Roger

 

 

 

This is an excellent summary of the mismatch between Lionel's perception of the S gauge market and what the market actually wants. If Lionel representatives attended some of the shows and conventions sponsored or populated by S gaugers, they would hear exactly the same thing.

The investment in the cylindrical hopper tooling can still be amortized by adjusting the truck bolsters to lower the car. The body is fine--it just sits too high. Make it easy to swap out high-rail wheels for scale wheels at less expense than changing the entire truck, paint it as it really appeared--not glossy fantasy schemes--and this investment will have a much longer life. 

When preorders do not reach the minimum levels necessary to make the investment, let customers know through this forum or by contacting large dealers such as Charles Ro, Nassau Hobbies, or Portline Hobbies. If there is real interest, then getting the message our will stir up preorders. (Assuming that the initial description is accurate, unlike the engineer-less Challenger without the promised oil tender. A mockup model instead of a PhotoShop graphic would help in reassuring potential buyers.)

The S gauge section of this forum has been very active since York, and it is very encouraging that Lionel is still interested in opinions. The Lionel approach may be very different from American Models, who announce a model one month and actually deliver terrific product--as promised--two months later; but it is appearing that American Models and Lionel are truly committed to S gauge. 

What Ryan told Bob is pretty close to what he told me.  That is confirming to know.

American Models is only in S, so of course it is committed.  However, the new engines the owner produces is really just a few and not even one a year.  There is always a backlog of unsold products.  If Lionel had to wait 5-6 years to sell out their Northerns like AM has they wouldn't be in S Gauge.  I really don't see them as a major player. 

AM develops a model, produces it, and sells it ASAP.  Lionel catalogs, waits to see if orders will cover development costs, then develop & produces, and ships to buyers.  It is a whole different model of business. 

Roundhouse Bill posted:

What Ryan told Bob is pretty close to what he told me.  That is confirming to know.

American Models is only in S, so of course it is committed.  However, the new engines the owner produces is really just a few and not even one a year.  There is always a backlog of unsold products.  If Lionel had to wait 5-6 years to sell out their Northerns like AM has they wouldn't be in S Gauge.  I really don't see them as a major player. 

AM develops a model, produces it, and sells it ASAP.  Lionel catalogs, waits to see if orders will cover development costs, then develop & produces, and ships to buyers.  It is a whole different model of business. 

Bill,

What is wrong about having an inventory of products for sale?  I thought that is how it works.  I go to the store to buy beer off the shelf.  I don’t want to preorder it and miss out if I didn’t get on the preorder bandwagon.  If they are that unsure of the market, perhaps they should do a little market research… or stay with the 0 gauge toy train market and leave S alone.

If Lionel really wanted to sell S products, they would be following American Models or better yet, investing in AM so Ron could produce more.  I am sure the only reason AM doesn’t produce more is the size of the operation rather than the lack of market.

Tom Stoltz

in Maine

Brian Olson posted:

Inventory on the shelf is fine so long as there is turnover. You don't want to buy two year old beer even though it is conveniently in stock. Not only will the beer be bad but there are costs of carrying inventory over time. If AM has inventory they sit on and they're fine with it then more power to them. Personally I'd want the cash flow coming from turning inventory.  Something sits too long then I'd rather make a fast nickel than a slow dime.

Hi Brian,

I guess I wasn’t clear enough. The problem I see is you have to preorder before you really know what you will be getting. If you don’t preorder, you miss out.

Tom Stoltz

in Maine

If the stumbling point for an SP GS-4 Daylight or a N&W J is the tooling costs vs THEIR percieved market size, why not put a computer-generated image in one of their "Dreamlogs" (ie, Catalogs) and see what kind of orders it gets. If they're right & I'm wrong, then no loss; just don't make it! You can't know the water's temperature without putting your toe in!

And yes, most of Big L's problem is they really don't understand the nature of the S enthusiast. Even at "blow-out prices" for the Mint cars, I'm still not that tempted to get one--it just doesn't fit in with the rest of the rolling stock!

In my conversations with the Lionel staff, I found most of them very knowledgeable about the market and railroads.  In certain parts of the conversations, I could see light bulbs going on when I described modifications of a Polar Express Berk to a Reading T1.  Would it be practical?  I'll bet they are at least giving it thought.  If this modification can be done, why not others that are close with other engines? 

Will it happen?  Don't know - it's all about dyes, dollars, investment and return.  Don't give up on Lionel, as it's the best, most knowledgeable staff I've met so far.

America is a land of making the impossible possible.  I rout for Flyonel, American Models (great passenger cars and track) and any one who tries to put out a decent product in S.

Francine

 

Roundhouse Bill posted:

You missed out as the Berk is a fine product and not a downgrade.  Lionel is considering a Legacy Berk, but I will not get one because my guess is that it will be $900 or more.  It is not LionChief it is the same as LionChief plus and called FlyerChief.

I don't know how you can say  that Bill. If he is used to buying Legacy engines then the FlyerChief Berk is absolutely a downgrade.

I can only speak for myself, but after getting sold on the idea that Lionel was going to keep making scale Legacy engines the Berk is a HUGE let down. I wouldn't buy one for half of what they want for it. It just isn't something I'm interested in. Modeled in details were fine 60 years ago. They don't cut it for me today. Neither does the 2 chuffs per revolution, molded in front coupler (I believe), or Control system that isn't legacy compatible that at best need a new remote for every 3 engines. 

Opps...... I have over 50 Gilbert engines and I run them all on my layout with Gilbert track.  the Berk with FlyerChief operates and does more than Gilbert engines, I also, have 6 AM locomotives and the Berk does more than they do, I started buying Flyonel engines in 1981 so I lots of that, and I have 12 Legacy engines and the Berk does less, But I feel the Berk is very dependable as some of the Legacy units aren't.  I do not run any scale products.  

There is my comparison  and point of view.  Of the 2016 engines I bought the Frisco Northern with FlyerChief.

I guess that explains my point of view because of how I play trains.  I don't want to upset anybody so I wanted to clarify my perspective. 

I think the Berkshire is a fine engine that brings an essential new product to S gauge. It is good for the future of S. I did not buy one primarily because I would not be able to operate it with Legacy. Lionel likely could add an interface to the LCS system plus update the Legacy software to make this possible. But that takes time, money and manufacturing. This should not have any impact on the FlyerChief or LionChief engines themselves. Only Lionel could judge if enough Legacy system owners would spend the money to add another interface device to the LCS to allow it to send commands to a FlyerChief engine. 

Roundhouse Bill posted:

You missed out as the Berk is a fine product and not a downgrade.  Lionel is considering a Legacy Berk, but I will not get one because my guess is that it will be $900 or more.  It is not LionChief it is the same as LionChief plus and called FlyerChief.

With all due respect, it is a pretty severe downgrade.

I readily see the market justification for offerings such as the Kiddie Berks and KiddieChief, but there also needs to be a new upscale Legacy offering from time to time for the rest of us. The Berks are, well, just OK. Gilbert placed separately applied wire handrails on his die cast models in the late 1930s (for crying out loud! ). I am content to wait for a proper Berk with the full expectation that there will be a premium to be paid for it.

The development of an interface between KiddieChief and Legacy would be a plus, as suggested above. The O gauge community would benefit from an interface, as well.

Bob

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