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Post by atsfan on Dec 17, 2014 14:39:39 GMT -8
I can't remember ever seeing a statement like this from a consumer products company. Atlas likely tried to find a buyer, failed, and must now make good on its bank covenants. Plus, the family needs a place to work. Atlas has slipped into also-ran status and may never be able to recapture its former place in the market. I'm going to keep my response here respectful. For one thing, in the model trains industry, one does actually see letters similar to Atlas's letter every once in awhile. There is nothing new under the sun. I thought it was well written and basically just an end of year thank you--next year will be better letter...typical of model train pr. It seems you may not be fully aware of the history of model train manufacturing. Atlas has most certainly ridden through all kinds of things in the past 70 years or more that they've been in the hobby, and has in fact outlasted many dozens of other former model train manufacturers (Bowser alone has purchased or otherwise acquired something like 20 former train manufacturing companies at last count). Atlas is a class act, and they will be just fine. Even in their current state, they are far from also-ran status. They are still bigger than several others. All glory is fleeting Look at Motorola Blackberry Pontiac Pan Am PRR The list is long Atlas is assured nothing based on things done 50 years ago.
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Post by atsfan on Dec 17, 2014 14:40:21 GMT -8
PS: Lionel?
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Post by WP 257 on Dec 17, 2014 14:50:37 GMT -8
All glory is fleeting Look at Motorola Blackberry Pontiac Pan Am PRR The list is long Atlas is assured nothing based on things done 50 years ago. It seems you might have missed some key points shared by Atlas in the letter: It was not Atlas's fault that their (main) supplier conveniently "misplaced" some of the tooling, and that tooling accumulated over many years, when shuffled to different locations, got mixed up if not outright permanently damaged/lost. That was an unprecedented "challenge" for them. I think their letter was pretty honest that hey--they had some tooling that needed to be completely replaced--they also used that as an opportunity to make some improvements to tooling at the same time. Apparently you think tooling accumulated over many years can suddenly get replaced overnight? Or in even just a year or so?? Tooling is not cheap and takes time, and I don't think anybody in their right mind should expect them to suddenly be releasing a bevy of new products at the same time they are/were trying to replace their bread and butter (track) tooling. But then who of us is actually in their right mind? Perhaps you've never "re-designed" anything--sometimes a redesign can take as long or even longer than starting over from scratch (depending upon what components are attempted to be salvaged).
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Post by atsfan on Dec 17, 2014 18:14:38 GMT -8
All glory is fleeting Look at Motorola Blackberry Pontiac Pan Am PRR The list is long Atlas is assured nothing based on things done 50 years ago. It seems you might have missed some key points shared by Atlas in the letter: It was not Atlas's fault that their (main) supplier conveniently "misplaced" some of the tooling, and that tooling accumulated over many years, when shuffled to different locations, got mixed up if not outright permanently damaged/lost. That was an unprecedented "challenge" for them. I think their letter was pretty honest that hey--they had some tooling that needed to be completely replaced--they also used that as an opportunity to make some improvements to tooling at the same time. Apparently you think tooling accumulated over many years can suddenly get replaced overnight? Or in even just a year or so?? Tooling is not cheap and takes time, and I don't think anybody in their right mind should expect them to suddenly be releasing a bevy of new products at the same time they are/were trying to replace their bread and butter (track) tooling. But then who of us is actually in their right mind? Perhaps you've never "re-designed" anything--sometimes a redesign can take as long or even longer than starting over from scratch (depending upon what components are attempted to be salvaged). The key point is, it doesn't matter ! Who cares what happened to them. It most certainly was their fault. It wasn't my fault. It is not my job to redesign anything. It is Atlas job to make products I want, at in price I want to pay, and available how I want to buy them. I am the consumer and customer. I am in charge. It is my money. All discussion otherwise in 2014 is ignoring the reality of the world today, especially when it comes to discretionary hobby funds.
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Post by WP 257 on Dec 17, 2014 18:27:53 GMT -8
Nice, so the fact that Bachmann/Kader dumped a whole host of manufacturers ie cut them off from all future production and conveniently "lost" some of those manufacturers' tooling at the same time is all the manufacturers' fault entirely?
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Post by atsfan on Dec 17, 2014 19:25:18 GMT -8
Nice, so the fact that Bachmann/Kader dumped a whole host of manufacturers ie cut them off from all future production and conveniently "lost" some of those manufacturers' tooling at the same time is all the manufacturers' fault entirely? Do you work for Atlas? It sure isn't my fault. Atlas decided to outsource to China. So yes, it their fault entirely. Hopefully someday Atlas will make a new car or engine I am interested in. But until then, I am reasonably sure the sun will come up tomorrow, most likely in the eastern sky.
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Post by WP 257 on Dec 17, 2014 19:54:17 GMT -8
No, I don't work for Atlas, and I don't believe outsourcing is their fault either. We the customers demanded somewhat "affordable" RTR models (originally generally comparable to Kato or Roco in quality) which could not any longer be provided with American labor at the price point of that day, or any remotely competitive price point, for a whole host of reasons. That is basically what happened.
I well remember the first Model Power Shark Nose with the Austrian can motor, and how much better it was than just about everything else we had then, with the possible exception of Athearn which was still very reasonably priced, for awhile. (Some have alleged the Athearn was only affordable due to the number of non-US citizens working for them in their factory at that time, but I wasn't there and that's only what I heard.)
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Post by Judge Doom on Dec 17, 2014 20:18:05 GMT -8
No, I don't work for Atlas, and I don't believe outsourcing is their fault either. We the customers demanded somewhat "affordable" RTR models (originally generally comparable to Kato or Roco in quality) which could not any longer be provided with American labor at the price point of that day, or any remotely competitive price point, for a whole host of reasons. That is basically what happened. I'm not sure why you're telling him this, atsfan in all likelihood knows it. He's just behaving like another entitled consumer who believes model RR companies should be on their knees begging to make him happy, regardless of outside factors or unexpected occurences beyond a manufacturer's control. In the end, we all know Atlas is responsible for their production and product, but some people on this forum, the same ol' group of them, need to get their heads out of their butts once in a while and see that problems happen, whether it be to an individual, model company or big business.
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Post by Paul Cutler III on Dec 17, 2014 20:42:03 GMT -8
atsfan, Actually, you are at fault. You and every other model railroader (including me). If we were willing to pay them enough to have American workers at regular American wages to build 'em here, then that's where they'd be built. But because we are so cheap, Atlas and rest have to cut costs wherever they can, and that means going to China.
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Post by diburning on Dec 17, 2014 21:19:28 GMT -8
I was happy to see the communication from Atlas. They seem to be pretty up front about things, without bashing others too much. They worked through their issues, and plan to be back strong. A welcome return to what is hopefully a prosperous adventure for them, and good for us. As am I. Don't get me wrong, I am a fan of Atlas and their products, but there is something that doesn't add up, based on what I know (which may not be everything, so I could be wrong on this one) I was not aware of any animosity between manufacturers. As shared already by another poster above, manufacturers tend to tell each other about what they are doing so that no one loses money coming out with the same model, unless one manufacturer decides that they could probably do a better job. I was not aware of any competitor that told rumors of Atlas' impending demise. I was under the impression that the retail dealers and distributors spread the rumor because they could not get a straight answer from Atlas, and were frustrated at the lack of product being delivered despite Atlas continuing to announce new products with order deadlines. If this is true, then Atlas wasn't being up front about things, which spawned the rumors. I'm glad to see Atlas on the way to being back on track. Here's another thing that I'm curious about: Now that Atlas has found new manufacturing suppliers, does this mean that prices will remain as they are and/or decrease a little? Atlas's pricing had gotten to the point where I found it to be exorbitant for re-runs of older models with new new details (and slightly slipping QC) Athearn's pricing fluctuated a little bit, but it wasn't as bad as Atlas. And as for Walthers.... I'm almost convinced that Walthers is pricing things higher and higher to see what the market will bear to find the price ceiling to keep the pricing there. They're selling built-up (former) kit cars for highly-detailed RTR prices.
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Post by WP 257 on Dec 17, 2014 21:47:52 GMT -8
Apparently the bean counters at Atlas had decided to enact rather high monthly minimum order amounts, into the many thousands of dollars, that resulted in many LHS's no longer being able to buy direct from Atlas, thus cutting the LHS profit margin. Some people were not happy about that, and so rumors have persisted "on the street".
Atlas may or may not have reversed the policy, but some dealers in the short run are not thrilled with Atlas right now.
Perhaps that will change over time.
There is a trend in the industry to cut the LHS profit margin.
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Post by John Sheridan on Dec 18, 2014 6:18:46 GMT -8
]I'm going to keep my response here respectful. For one thing, in the model trains industry, one does actually see letters similar to Atlas's letter every once in awhile. There is nothing new under the sun. I thought it was well written and basically just an end of year thank you--next year will be better letter...typical of model train pr. It seems you may not be fully aware of the history of model train manufacturing. Atlas has most certainly ridden through all kinds of things in the past 70 years or more that they've been in the hobby, and has in fact outlasted many dozens of other former model train manufacturers (Bowser alone has purchased or otherwise acquired something like 20 former train manufacturing companies at last count). Atlas is a class act, and they will be just fine. Even in their current state, they are far from also-ran status. They are still bigger than several others. Actually, just about every Model Railroad Manufacturer has had this same problem since Sanda-Kan imploded. Atlas is just the last to come out of it. In the scramble to get production moving after Sanda-Kan, companies grabbed whatever manufacturer they could in order to get production moving. A few choose wisely, while others, not so wisely. Unfortunately for Atlas the factory they choose was more interested in making everything but their product so they suffered accordingly. It took them a few years to find another place to make product that is reliable. It is good to see that Atlas is finally coming out of it. They almost didn't make it.
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Post by John Sheridan on Dec 18, 2014 6:23:39 GMT -8
Do you work for Atlas? It sure isn't my fault. Atlas decided to outsource to China. So yes, it their fault entirely. Hopefully someday Atlas will make a new car or engine I am interested in. But until then, I am reasonably sure the sun will come up tomorrow, most likely in the eastern sky. Trolling again Sherman ? Of course, had Atlas kept their manufacturing in New Jersey you would be complaining about their high prices wouldn't you ? So, no matter what they do or did, you would find some way to give them the ole' ASTFAN backhand right ?
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Post by John Sheridan on Dec 18, 2014 6:39:22 GMT -8
I was not aware of any competitor that told rumors of Atlas' impending demise. I was under the impression that the retail dealers and distributors spread the rumor because they could not get a straight answer from Atlas, and were frustrated at the lack of product being delivered despite Atlas continuing to announce new products with order deadlines. If this is true, then Atlas wasn't being up front about things, which spawned the rumors. It was more the case of how long you can survive without inventory or product in the pipeline. With Atlas, it was a case of bad-luck following on the heels of more bad-luck follow by yet, more bad luck. Mind you they are only the latest to come out this kind of situation. Remember, just a few years ago, Athearn had their entire Genesis tooling seized by the Chinese Govt. Had Horizon not had enough clout to force them to give it back, you would have not seen another Athearn Genesis product for quite a long time. For Walthers, it is a case of stretching resources a tad too thin while prices go up. Most of the increases were due to oil prices driving up the cost of making plastics. You will likely see prices continue to rise for the foreseeable future. Why ? Because you have a labor force with some clout that likes to make money like the rest of us. Couple that with China continuously propping-up the Yaun while its real estate is imploding makes for bad economic conditions. The Chinese bubble is deflating just like it did with Indian Outsourcing of tech support. Also, there is a new word I keep seeing in the Economic pages these days: reshoring. The next 6 years will be very interesting.......
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Post by WP 257 on Dec 18, 2014 7:10:30 GMT -8
Athearn is also still recovering, but folks forget because they've released a ton of other models.
Primary victim was the Genesis Southern Pacific 4-8-2 with the skyline casing. I don't know if it's ever made it to market yet. Some of the tooling for it was also conveniently "lost" and had to be replaced. The unstreamlined version was out several years ago.
Don't count on "reshoring" happening in the model train business. The owner of one importer just told me recently that it will never happen. Presumably because the order sizes are so small and tiny Asian hands are more adept at assembling RTR models with speed than we are...but that's my 2c only.
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Post by Great-Northern-Willmar Div on Dec 18, 2014 7:23:19 GMT -8
Athearn is also still recovering, but folks forget because they've released a ton of other models. Primary victim was the Genesis Southern Pacific 4-8-2 with the skyline casing. I don't know if it's ever made it to market yet. Some of the tooling for it was also conveniently "lost" and had to be replaced. The unstreamlined version was out several years ago. Don't count on "reshoring" happening in the model train business. The owner of one importer just told me recently that it will never happen. Presumably because the order sizes are so small...but that's my 2c only. You'd think that something like track could still be manufactured in the U.S.. Circuitron still makes its Tortoise switch machine motors in Romeoville, Illinois. There is a lot more going on in assembling a Tortoise than a hunk of flex track. Woodland Scenics is still American made as are many detail parts from DA, DW and Cannon to name a few. Not everything in this hobby is outsourced. Maybe, its time to revive the ancient lost art of actual model railroading. Instead of having everything so nicely put together and take it out of the box and plop it on the track. The locomotive comes in a kit, a generic kit, where the buyer must either assemble the model or pay someone to assemble it for them. Call it enhanced blue box! Separate detail packages could be available to super detail the kit, aka a practice Bowser used to do with its old steam locomotive kits .
The hobby has over the last 15 years become pampered. Work is no longer required. A big bank balance is required. Simplify the product and make the end user do some of the work. It works in many other consumer industries, you'd think it would work again in model railroading. Then 90% or better of the quality control complaints would be no more, as glue smudges would be the fault of the buyer and not the manufacturer.
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Post by John Sheridan on Dec 18, 2014 7:24:24 GMT -8
Athearn is also still recovering, but folks forget because they've released a ton of other models. Primary victim was the Genesis Southern Pacific 4-8-2 with the skyline casing. I don't know if it's ever made it to market yet. Some of the tooling for it was also conveniently "lost" and had to be replaced. The unstreamlined version was out several years ago. Don't count on "reshoring" happening in the model train business. The owner of one importer just told me recently that it will never happen. Presumably because the order sizes are so small and tiny Asian hands are more adept at assembling RTR models with speed than we are...but that's my 2c only. There was more than just Athearn. If people remember (obviously not) the entire industry went through a drought between 2008-2011 where very few new models where coming out. Why ? because of the mad scramble to find a manufacturer who A. Would be able to make your product. B. To actually make your product. C. To do both A&B in a timely fashion. As for Reshoring, I see the industry going to the model (oh a pun!) more like Intermountain Railway model where tooling & plastic shooting returns to the US & the parts are sent to China for assembly & packaging. If manufacturers went to this model they have far more control over tooling, manufacturing & intellectual property than they do now which is none. Currently, the only way to make sure Yagchow Factory #8 is actually making your product instead of cousin Yin's rubber doogie-do is to keep a person there full-time to make sure you get what you ask for. That can get expensive after awhile but unfortunately just about every company out there has to do this to keep product in the pipeline.
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Post by Great-Northern-Willmar Div on Dec 18, 2014 7:35:00 GMT -8
Athearn is also still recovering, but folks forget because they've released a ton of other models. Primary victim was the Genesis Southern Pacific 4-8-2 with the skyline casing. I don't know if it's ever made it to market yet. Some of the tooling for it was also conveniently "lost" and had to be replaced. The unstreamlined version was out several years ago. Don't count on "reshoring" happening in the model train business. The owner of one importer just told me recently that it will never happen. Presumably because the order sizes are so small and tiny Asian hands are more adept at assembling RTR models with speed than we are...but that's my 2c only. There was more than just Athearn. If people remember (obviously not) the entire industry went through a drought between 2008-2011 where very few new models where coming out. Why ? because of the mad scramble to find a manufacturer who A. Would be able to make your product. B. To actually make your product. C. To do both A&B in a timely fashion. As for Reshoring, I see the industry going to the model (oh a pun!) more like Intermountain Railway model where tooling & plastic shooting returns to the US & the parts are sent to China for assembly & packaging. If manufacturers went to this model they have far more control over tooling, manufacturing & intellectual property than they do now which is none. Currently, the only way to make sure Yagchow Factory #8 is actually making your product instead of cousin Yin's rubber doogie-do is to keep a person there full-time to make sure you get what you ask for. That can get expensive after awhile but unfortunately just about every company out there has to do this to keep product in the pipeline. The Chinese have been well documented to play fast and loose with other intellectual property in other industries. I can't see why trains would be different. Reading a current issue of Time magazine, the new head of the China wants China to be the number one nation in the world, relegating the U.S. to second. Interesting times are ahead for many consumer products, not just toy trains.
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Post by John Sheridan on Dec 18, 2014 7:35:42 GMT -8
You'd think that something like track could still be manufactured in the U.S.. Circuitron still makes its Tortoise switch machine motors in Romeoville, Illinois. There is a lot more going on in assembling a Tortoise than a hunk of flex track. Woodland Scenics is still American made as are many detail parts from DA, DW and Cannon to name a few. Not everything in this hobby is outsourced. Micro Engineering track is still made in the USA. The main reason why Atlas track is made in China is because all of their product is made in China. Makes it easier to get better pricing on contracts. The main reason why the hobby shifted from "some assembly required" to "ready to run" is mostly do to the shift of demographics in the entire hobby from the 1990s - through today. Let's all face it - older people do not have best eyesight, time, or energy to build things when it is much easier & more gratifying to get a high-end model by popping it out of the box & putting it on the track. Don't, for a second start that dopey rallying cry of "We need to get kids involved!!!" Forget it. Model Railroading is an ADULT hobby & has been for 20 years. Sorry, but your awesome choo-choos cannot compete with the Internet & everything else that distracts a young adult's attention these days. Don't worry though, we do get them back once they are settled-down & more mature. As I said in another post, there are plenty of companies out there who are priced in the lower-end of the market & quite affordable. Also, there is nothing stopping you from scratchbuilding & kitbashing your own models if you cannot afford them.
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Post by John Sheridan on Dec 18, 2014 8:05:56 GMT -8
The Chinese have been well documented to play fast and loose with other intellectual property in other industries. I can't see why trains would be different. Understatement of the year. However, every company who goes there thinks that they will be have full control over all aspects of production. Of course they all get a hard lesson on what it means to try & control something on the other side of the planet without having you own people there to oversee. What is not being told is two things: 1. The real estate market in China is in free-fall right now. Guess where everyone in China has most of their investments in ? 2. The Chinese Government has kept the Yuan artificially inflated for years. It is now to the point where they cannot keep that up due to reason #1. 3. The free-for-all anything goes conditions in China are no longer sustainable due to the fact that far too many people & companies are mistrusting Chinese goods due to the shady practices over there. That has a huge effect going forward which is now starting to show. Remember back in the 1980s when everyone thought that Japan was going to do the exact same thing to us ? Look where they are now.
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Post by bnsftcdiv on Dec 18, 2014 8:24:17 GMT -8
Exactly! The runs of expensive, well detailed engines sell out because folks with disposable income buy them. Most of us won't see that until the kids are through school, the house is paid off and we have climbed the corporate ladder!. The empty nesters get room for a layout, cash-flow,and time to build it. Most of us out there balance hobby time for family and social time. Over time they can or will learn about prototype modeling, but at this point they may not notice/care if they have a small imperfection, if the battery box doors are 6 scale inches too small, or their favorite prototype didn't even have that car. I can model and detail but there are some trade offs I'm willing to accept now to get a layout built and operating-then, I can go back and catch the detail up. If I don't buy it perfect, then I'm still having fun while I'm doing it today. Those 30-40+ year old kids coming from the net have been groomed on video games and RC so they are going to want to see it move, sound and look good. Those are the folks that are attracted to our ops group. Thats who I see at the shows and shops with bags and boxes…and they can get to the net to see how to improve. learn to model and get the details right.
I'm glad to see Atlas is getting healthy...
Yep the hobby is changing….are we?
Dave Burman modeling the modern Twin Cities terminal Riverrail Operating group-LaCrosse, WI Trempealeau, WI
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Post by WP 257 on Dec 18, 2014 8:27:04 GMT -8
Other manufacturers are adopting Intermountain's approach and making the plastic parts here so they have total control over the parts quality--then the parts are shipped to China for assembly and painting. However, that still isn't too many jobs here compared to what they once had, even in trains.
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Post by bar on Dec 18, 2014 8:28:53 GMT -8
Beijing seized Athearn molds? That's news to me. Also, a quick look at Google News finds that manufactured imports still outpace much-hyped reshoring in 2014.
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Post by John Sheridan on Dec 18, 2014 8:40:29 GMT -8
Other manufacturers are adopting Intermountain's approach and making the plastic parts here so they have total control over the parts quality--then the parts are shipped to China for assembly and painting. However, that still isn't too many jobs here compared to what they once had, even in trains. Correct me if I am wrong, but sin't Bowser adopting this exact model right now ?
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Post by atsfan on Dec 18, 2014 8:46:42 GMT -8
It is simple. The more prices go up, the fewer model trains are sold, to fewer people. Model trains are not going to reinvent Economics 101, especially since it is a hobby, not food.
So it matters not what Atlas or Athearn do, or don't do.
It was asked "are we changing" since the hobby is changing, above. The answer is, yes. We are buying fewer products, and fewer people are buying at all. In the short run is if fine if the price doubles, sales are halved, and the profit stays the same. That is not a sustainable business model. One guy sayig he is buying more is not going to outdo all those who are not.
As for outsourcing to China, that is a whole different topic.
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Post by Great-Northern-Willmar Div on Dec 18, 2014 9:01:16 GMT -8
Not trying to sound like an old curmudgeon, yelling at the damn kids to get off my grass.
But, you've got to wonder where this hobby is headed in the next five years. There are so many factors in play and the Athearn's, Atlas', Intermountain, Bowser, etc. are by definition small businesses. Factors which because of their relative size, they don't control. Even making monthly visits to the factories to make sure the product is being produced correctly leaves the factory without a watchful eye for most of the time. The big companies pumping out billions in products can afford to have an employee of the importer or an American supervising the operation 365 days a wear.
Doing the research, engineering, cutting the tooling and manufacturing the parts here in the U.S. gives the American company much more control. But once the parts hit China, all bets are off, unless the American company has a strong presence which it seem most do not.
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Post by cannon on Dec 18, 2014 9:09:59 GMT -8
[quote source="/post/50987/thread" timestamp="1418915430" author=" WP 257Woodland Scenics is still American made as are many detail parts from DA, DW and Cannon to name a few. Not everything in this hobby is outsourced. DW, and Cannon, are basically one man self made garage operations. DA is a one man, outsourced operation. Dave Hussey Cannon and Company
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Post by John Sheridan on Dec 18, 2014 9:13:43 GMT -8
It was asked "are we changing" since the hobby is changing, above. The answer is, yes. We are buying fewer products, and fewer people are buying at all. In the short run is if fine if the price doubles, sales are halved, and the profit stays the same. That is not a sustainable business model. One guy sayig he is buying more is not going to outdo all those who are not. Ok. Riddle me this: If manufacturers are continuously raising prices AND producing less units like you claim, then where are they getting the monies to do more & more esoteric items like a C-415, or A Baldwin Centipede, etc ? By your pretzel logic, there is no way a manufacturer could make these kinds of models which appeal to a very narrow market. Yet, time-after-time, these models are sold out before they hit the streets & they are forced to make multiple runs of each of these unique models. They would only be making models that appeal to the largest market share if what you claim is true. Otherwise, they would have inventory sitting on shelves gathering dust.
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Post by John Sheridan on Dec 18, 2014 9:18:18 GMT -8
[quote source="/post/50987/thread" timestamp="1418915430" author=" WP 257Woodland Scenics is still American made as are many detail parts from DA, DW and Cannon to name a few. Not everything in this hobby is outsourced. DW, and Cannon, are basically one man self made garage operations. DA is a one man, outsourced operation. Dave Hussey Cannon and Company Well Dave, according to Atsfan or whatever he is calling himself these days, a guy like you who makes detail parts should be completely out of business as no-one buys detail parts anymore right ? Yet, somehow, you produce less while raising prices to light your cigars using 100 bills you collected after raising your prices. Heresy I say! Back to your garage!
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Post by John Sheridan on Dec 18, 2014 9:28:58 GMT -8
Not trying to sound like an old curmudgeon, yelling at the damn kids to get off my grass. Oh, comon & give it a try sometimes. Make sure you include a copious amount of fist-shaking when utter those immortal words. Yup. At least if you are a big player, you can threaten to take your business to Cousin Yang down the street. If you are a little guy operating on thinner margins, then it becomes a game of how often you can be there v.s. when they are going to screw you over. Money talks in China. Period. The same thing is happening with customer call centers in India. Customers were so fed-up with not being able to understand the person on the other end, they voted with their wallets. Now companies are finding it cheaper to reshore the call-center in a small town with a population that wants those jobs.
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