The General Electric DASH 8 series C40-8 locomotive could be produced by LIONEL for both the Lionmaster line and the American Flyer line.
The locomotive designers at LIONEL should make the GE C40-8 in 1:64th scale for American Flyer to get the hang of the small proportions. Then size the C40-8 up just enough for Traditional O Gauge freight cars in the Lionmaster line.
Andrew