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To add to that. It mechanically adjusts the path of electricity through a solenoid and rotating drum to alter the current flow  to the brushes resulting in a forward and reverse action.  Each time power is interrupted and reapplied, the drum rotates to a new position.  3 position e unit has forward, neutral and reverse

To make things interesting, this is also an E-Unit - a type of obsolete 6-axle EMD(GM) diesel passenger locomotive.

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I've been told that the Lionel reversing unit - the E-unit  - was nicknamed that because the brass drum contact fingers are stamped in the shape of an "E". Can't prove it by me.

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