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Post by valenciajim on Jan 21, 2016 10:40:14 GMT -8
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Post by mlehman on Jan 21, 2016 12:16:39 GMT -8
Yeah, times are tough in China right now. But the article really is more about doing business in China, rather than the export market.
Pressures to raise wages are about the only thing to affect the products we get imported from there. That's not too surprising, given the historically low levels of income there were a big factor in what made it attractive as a supplier in our hobby. I don't begrudge anyone wanting to take care of their family better in order to supply us with our discretionary purchases, though.
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Post by atsfan on Jan 21, 2016 12:32:21 GMT -8
Pressures to raise wages are about the only thing to affect the products we get imported from there. That's not too surprising, given the . I don't begrudge anyone wanting to take care of their family better in order to supply us with our discretionary purchases, though. I do. If the prices go up, I buy less. Simple. Less business and work for them to demand more money for. |
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Post by valenciajim on Jan 21, 2016 14:36:52 GMT -8
Increased wages have to be accompanied with increased productivity. Failure to do so will result in increased prices and lower demand for the product.
Robotics and 3D printing will eventually replace overseas labor.
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Post by Gary P on Jan 22, 2016 3:42:54 GMT -8
I found this last sentence interesting....
Seems to me if it is that bad, similar problems may exist for recruiting lower level workers too, at least ones that may have marketable skills. I know some folks will not care about it, but some will, and would try to look elsewhere for gainful employment.
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Post by valenciajim on Jan 22, 2016 8:47:43 GMT -8
Gary--Interesting point. China has a lot of problems. It has grown too fast to control, the government has not made the best long term decisions and many of those who can afford to leave do.
The reason why people in China move to the cities to work under difficult conditions is because the rural regions of China-particularly those in western china are extremely poor.
One other thing that is happening is that Chinese financial institutions can now invest outside of China. They are driving up the price of commercial real estate in the US, UK and elsewhere. They are not concerned about getting a return on investment, but want to insure that they get a return of investment.
Well enough of this, I have a model citrus facility that needs to be completed.
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Post by llxlocomotives on Jan 22, 2016 14:40:52 GMT -8
China has a huge population and a significant amount of its land is desert. The air quality is beyond belief. Companies are trying to come up with techniques to move the smog out to sea. The best way to think about this is most of their people live in what would be the eastern seaboard of the US.
On top of that most of the worlds products are manufactured in this same section of land. All this hard manufacturing going on leads to real air problems.
With all this business gong on, even their huge population is not enough. The people with the skills to work are insisting on more income. If the model tran factory won't pay it, the electronics factory 2 blocks up the road will. The trans get drug along until the price is more than the market will bear. I suspect that time is right for the production of things like model trains to move to a more friendly environment. The competition for the appropriate labor in China is creating aa profit. Crunch. The market will work it out. It will be net resting to see wher it goes next.
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Post by valenciajim on Jan 22, 2016 14:50:19 GMT -8
Larry-you are correct and provide an excellent analysis. By the way much of that pollution makes its way across the pacific to the west coast.
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Post by mlehman on Jan 24, 2016 11:17:09 GMT -8
SNIP I suspect that time is right for the production of things like model trains to move to a more friendly environment. The competition for the appropriate labor in China is creating aa profit. Crunch. The market will work it out. It will be net resting to see wher it goes next. I wouldn't obsess too much about the expense of labor in China. It'll still be cheaper than most anywhere else that modern manufacturing has the infrastructure to succeed. Places like Vietnam and India might seem attractive, but this tends to be for certain items where labor is far and away the biggest component of costs, like say handpainting figures or flocking trees. Once you get beyond that, there are things like adequate transportation networks, a range of business support services, and ready access to various technology for both producers and their subcontractors. China is far and away the biggest bull in the pasture once you factor in all the rest, with a market position that is unlikely to change for at least several more decades. |
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Post by atsfan on Jan 24, 2016 12:37:51 GMT -8
SNIP I suspect that time is right for the production of things like model trains to move to a more friendly environment. The competition for the appropriate labor in China is creating aa profit. Crunch. The market will work it out. It will be net resting to see wher it goes next. I wouldn't obsess too much about the expense of labor in China. It'll still be cheaper than most anywhere else that modern manufacturing has the infrastructure to succeed. Places like Vietnam and India might seem attractive, but this tends to be for certain items where labor is far and away the biggest component of costs, like say handpainting figures or flocking trees. Once you get beyond that, there are things like adequate transportation networks, a range of business support services, and ready access to various technology for both producers and their subcontractors. China is far and away the biggest bull in the pasture once you factor in all the rest, with a market position that is unlikely to change for at least several more decades. Are you an expert on India and Vietnam to declare they dont have adequate transportation, support services, ready access to technology? Have you been there? Recently? Do you conduct business there? Are you aware of the percent of "American" technology compaines which actually is in India. Several more decades? 30 years ago would anyone have said China would be what it is today? I do conduct business in all of these countries. Been to all. Many times. Have you heard of China's transportation problems? Seen the ports blowing up? 50 mile traffic jams? Your analysis is so far from reality of Asia in 2016 it is amazing. |
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Post by WP 257 on Jan 24, 2016 17:26:36 GMT -8
There is a learning curve for anyone producing rtr HO model trains in a factory setting. It is not that easy to up and move production while managing to deliver a product that most of the folks on these forums would find to be acceptable.
Overland Models found that out when they started a factory in China, after production costs in South Korea were getting out of hand. It can be argued the Overland Models' factory (Cheyenne Industries?) in China did not do so great, as other than some freight cars and highly detailed, rather costly bridges, I don't know that they ever produced very much...don't know that they ever finished a locomotive model.
In the end, now Overland Models is apparently gone. They were the one importer many would have assumed would have outlasted others, due to the relative stability, name recognition, and buyers. I think all it really took to sink them were a few projects that got delayed and had big cost over-runs, along with supplier changes.
It remains to be seen if Overland Models will deliver another project.
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Post by atsfan on Jan 24, 2016 17:44:31 GMT -8
There is a learning curve for anyone producing rtr HO model trains in a factory setting. It is not that easy to up and move production while managing to deliver a product that most of the folks on these forums would find to be acceptable. Overland Models found that out when they started a factory in China, after production costs in South Korea were getting out of hand. It can be argued the Overland Models' factory (Cheyenne Industries?) in China did not do so great, as other than some freight cars and highly detailed, rather costly bridges, I don't know that they ever produced very much...don't know that they ever finished a locomotive model. In the end, now Overland Models is apparently gone. They were the one importer many would have assumed would have outlasted others, due to the relative stability, name recognition, and buyers. I think all it really took to sink them were a few projects that got delayed and had big cost over-runs, along with supplier changes. It remains to be seen if Overland Models will deliver another project. Brass is kaput |
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Post by WP 257 on Jan 24, 2016 17:56:54 GMT -8
atsfan--
There's 6 or 8 other importers actually delivering HO brass projects, so I don't know that you can say it's kaput.
brasstrains.com is doing a booming business, moving literally thousands of dollars of inventory each and every day, if you'd actually monitor their website for a couple days. Stuff gets listed, then sells within a day if it's a hot item...sometimes 3 or 4 of the same hot item at $1800 each, sold in less than one day (recent example: Key WP 2-6-6-2, of which there's only 65 in existence, but new ones are coming from another importer at $3500/each.) They have plenty of other immediately sold items at all price ranges, too, from cheap (comparable to BLI engine pricing) to not.
The rumors of brass's death are greatly exaggerated.
John
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Post by WP 257 on Jan 24, 2016 18:07:58 GMT -8
To assemble rtr trains in a factory setting requires some skills that not everybody on the street possesses, but some can be trained to accomplish. It's highly detailed work, and the people actually have to care about what they are doing, or the quality goes out the window in a hurry. Stuff has to get inspected at many intermediate steps. Stuff has to fit together well, without forcing. It's rather far from mindless assembly, insert tab a into slot b factory work.
So for any importers (plastic, hybrid, or other) who need a steady stream of product to pay the bills, it's really not that easy to just pick up and move to a new city in China, or to another country. Besides, doing so may result in the "mysterious loss" of some of one's tooling (as has already happened to American companies).
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Post by mlehman on Jan 24, 2016 21:07:59 GMT -8
To assemble rtr trains in a factory setting requires some skills that not everybody on the street possesses, but some can be trained to accomplish. It's highly detailed work, and the people actually have to care about what they are doing, or the quality goes out the window in a hurry. Stuff has to get inspected at many intermediate steps. Stuff has to fit together well, without forcing. It's rather far from mindless assembly, insert tab a into slot b factory work. So for any importers (plastic, hybrid, or other) who need a steady stream of product to pay the bills, it's really not that easy to just pick up and move to a new city in China, or to another country. Besides, doing so may result in the "mysterious loss" of some of one's tooling (as has already happened to American companies). Amen to that. I recall an ill-fated project a decade or so back to build HOn3 locos in India that seemed promising. In the end, the wheels just fell off the whole thing -- maybe off the models, too, considering the few pics that came out to illustrate. There was just very little concept of what was trying to be accomplished. The labor was likely real cheap, though, I'm sure. Didn't make a tinker's dang worth of difference, there was just no solid tradition of manufacturing intricate, quality model RR products. Then there's our own cultural tradition that accords little respect or pay to manual labor. It's harder than it looks or they wouldn't be so many folks looking to buy RTR stuff. Yet some of those folks think someone else with the requisite skills should build it cheap as a Happy Meal for them. |
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Post by atsfan on Jan 25, 2016 0:52:45 GMT -8
To assemble rtr trains in a factory setting requires some skills that not everybody on the street possesses, but some can be trained to accomplish. It's highly detailed work, and the people actually have to care about what they are doing, or the quality goes out the window in a hurry. Stuff has to get inspected at many intermediate steps. Stuff has to fit together well, without forcing. It's rather far from mindless assembly, insert tab a into slot b factory work. So for any importers (plastic, hybrid, or other) who need a steady stream of product to pay the bills, it's really not that easy to just pick up and move to a new city in China, or to another country. Besides, doing so may result in the "mysterious loss" of some of one's tooling (as has already happened to American companies). Amen to that. I recall an ill-fated project a decade or so back to build HOn3 locos in India that seemed promising. In the end, the wheels just fell off the whole thing -- maybe off the models, too, considering the few pics that came out to illustrate. There was just very little concept of what was trying to be accomplished. The labor was likely real cheap, though, I'm sure. Didn't make a tinker's dang worth of difference, there was just no solid tradition of manufacturing intricate, quality model RR products. Then there's our own cultural tradition that accords little respect or pay to manual labor. It's harder than it looks or they wouldn't be so many folks looking to buy RTR stuff. Yet some of those folks think someone else with the requisite skills should build it cheap as a Happy Meal for them. So far in this thread you have insulted India twice, Vietnam, and now the USA as you self determine the cultural condition of a nation. You also have passed negative judgement on the skills of one BILLION people, and the state of technology and transportation in Asia. Amazing. |
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Post by atsfan on Jan 25, 2016 0:55:01 GMT -8
atsfan-- There's 6 or 8 other importers actually delivering HO brass projects, so I don't know that you can say it's kaput. brasstrains.com is doing a booming business, moving literally thousands of dollars of inventory each and every day, if you'd actually monitor their website for a couple days. Stuff gets listed, then sells within a day if it's a hot item...sometimes 3 or 4 of the same hot item at $1800 each, sold in less than one day (recent example: Key WP 2-6-6-2, of which there's only 65 in existence, but new ones are coming from another importer at $3500/each.) They have plenty of other immediately sold items at all price ranges, too, from cheap (comparable to BLI engine pricing) to not. The rumors of brass's death are greatly exaggerated. John Brass is but a tiny fraction of what it once was. Yes there are 20 or 50 people buying a new expensive steam engine still. But the question was about Overland. So I modify "brass" to "Overland Brass and many others" Cheers |
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Post by valenciajim on Jan 25, 2016 8:56:39 GMT -8
atsfan--Prior to my retirement last May, I was a partner with Big 4 accounting firm that has a huge footprint in India. I have been there and seen things first hand. My understanding is that India lends itself to outsourcing of services because the population speaks English. However, based on the regulatory environment, there is very little export manufacturing there. Furthermore, Nehru started a program to educate India. India touts the fact that it has an increasing educated population and an increasing percentage of the population has a "college" degree. In India high school goes through the 11th grad and college is a three year program. So it is like everyone there has an AA degree. White collar jobs are highly sought after, blue collar jobs much less so. Based on the way my teams in India approached solving problems, I don't think that their mindset is focused on manufacturing. They are excellent software developers. I see India paying huge role in the development of artificial intelligence, but see little interest in manufacturing for export.
One of the problems in India is that labor costs, expressed in US dollars, are rapidly rising. When my firm started using India to serve US clients twelve years ago, the average annual starting salary was about $1,500. Now it is about ten times that amount for qualified people. I think the future of tax return preparation lies in artificial intelligence rather than preparing the returns in India.
For all these reasons, I doubt that model train production will ever move to India.
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Post by atsfan on Jan 25, 2016 10:34:24 GMT -8
atsfan--Prior to my retirement last May, I was a partner with Big 4 accounting firm that has a huge footprint in India. I have been there and seen things first hand. My understanding is that India lends itself to outsourcing of services because the population speaks English. However, based on the regulatory environment, there is very little export manufacturing there. Furthermore, Nehru started a program to educate India. India touts the fact that it has an increasing educated population and an increasing percentage of the population has a "college" degree. In India high school goes through the 11th grad and college is a three year program. So it is like everyone there has an AA degree. White collar jobs are highly sought after, blue collar jobs much less so. Based on the way my teams in India approached solving problems, I don't think that their mindset is focused on manufacturing. They are excellent software developers. I see India paying huge role in the development of artificial intelligence, but see little interest in manufacturing for export. One of the problems in India is that labor costs, expressed in US dollars, are rapidly rising. When my firm started using India to serve US clients twelve years ago, the average annual starting salary was about $1,500. Now it is about ten times that amount for qualified people. I think the future of tax return preparation lies in artificial intelligence rather than preparing the returns in India. For all these reasons, I doubt that model train production will ever move to India. I don't disagree. But that is different than saying the wheels will fall off if they did, or they don't have technology, or transportation, etc, etc. Personally, I think there is a future in kits again. As in the hard work is done like painting and hole drilling. But the assembly hours like grab irons are left to the modeler. |
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Post by valenciajim on Jan 25, 2016 17:34:31 GMT -8
Atsfan--I agree about the future of kits. Especially with the advent of 3D printing.
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Post by WP 257 on Jan 26, 2016 5:33:37 GMT -8
The actual marketing truth is that relatively few people have the desire or available time to build kits anymore and they are languishing on store shelves.
Plus there are many fine HO kits for sale on Ebay that are just not selling--to anybody other than a handful of buyers.
If you ask the manufacturers they will tell you that the rtr versions of their kits are significantly outselling the very same models available as kits.
There is only a very limited future for kits.
John
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Post by atsfan on Jan 26, 2016 5:52:38 GMT -8
The actual marketing truth is that relatively few people have the desire or available time to build kits anymore and they are languishing on store shelves. Plus there are many fine HO kits for sale on Ebay that are just not selling--to anybody other than a handful of buyers. If you ask the manufacturers they will tell you that the rtr versions of their kits are significantly outselling the very same models available as kits. There is only a very limited future for kits. John If prices continue to sky rocket that will change. |
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Post by nebrzephyr on Jan 26, 2016 6:54:19 GMT -8
The actual marketing truth is that relatively few people have the desire or available time to build kits anymore and they are languishing on store shelves. Plus there are many fine HO kits for sale on Ebay that are just not selling--to anybody other than a handful of buyers. If you ask the manufacturers they will tell you that the rtr versions of their kits are significantly outselling the very same models available as kits. There is only a very limited future for kits. John Not likely. As John and others have pointed out it's not totally a price issue. It's a time and inclination (skill) issue. If prices continue to rise, a segment of the buyers will drop out of the market.You're more likely to see that Genesis level SD40-2 before you see kits return.  Bob |
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Post by mlehman on Jan 26, 2016 7:37:03 GMT -8
Bob wrote: It's a time and inclination (skill) issue.As someone who still buys and enjoys building kits, I agree that inclination is a big part of it once the time factor is taken out. I enjoy the process, so I consider it time well spent. You do have to be willing, for most of us, the accept that what you create isn't going to be perfect. It's what you built, though, enjoyably. This certainly doesn't apply to everyone who buys RTR, but for the segment that is mercilessly critical of most products and whose main interaction with their models, besides opening the box, is getting out the credit card -- then who's left to blame when it's not perfect in their eyes? Yeah, they don't want to go there. You certainly don't see pics of their stuff in SPF. Not being a perfectionist, doesn't bother me a bit that there's a small glue flaw on one side, a couple of the tiny decals got mangled and pitched, something dried at a funny angle in one spot, paint is not pro airbrush perfect, etc. I enjoyed the process and that's where a big part of the pleasure in owning the result lies. Probably a good thing I'm not a Chinese worker, because I'd never last  But I'm sure having fun. |
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Post by WP 257 on Jan 26, 2016 9:28:41 GMT -8
Years ago I built a small fleet of Intermountain reefers and box cars from kits. They are very nice kits, and among the finest detailed kits I ever tried. I have no problem with the quality of their kits.
I hated every minute of the process. It took me an average of 3 hours per car to build them (even as I got the instructions memorized) and when I was done I was not happy with the quality of the results versus what could be purchased rtr, assembled in China, the exact same cars for $5 to $10 more at the time--assembled to a higher standard of quality than what I accomplished.
I also once built a Bowser L-1 2-8-2 from a kit. Hated every minute of it--absolutely positively hated it--especially screwing up the valve gear riveted assembly and subsequently buying the assembled valve gear kit. It was not fun for me, at all, even with my father's assistance.
I built literally dozens of plastic ships, planes, and cars, and generally considered them more fun to build than train kits, but I still did not like building them at all. I liked playing with them, floating them in the bathtub, sinking them, etc. I have disassembled and painted an Overland Models diesel--hated that too, and when I was done it didn't run correctly.
My time is very valuable to me. There's only so many hours in a week and so much to do with two active boys involved in sports, etc. When I compare my hourly pay rate to the cost of Chinese labor, and the quality they generally accomplish, it is much more cost effective for me to pay the Chinese labor rate, and will be for years to come.
I have relatively few quality issues. Because I am able to generally see items in a store before buying, I buy the best I can get, and take them home and run them--nearly every day. My only involvement with them is not limited to the credit card transaction because I enjoy operating them.
I would buy a Moloco freight car--or a fleet of them, or even the pricey Intermountain Auto Racks--before I'll ever build another kit of anything. My time to build a (typical highly detailed) kit actually costs me more money than the purchase price of the Moloco or Intermountain Auto Rack. So it's a no-brainer. I'll buy the rtr every time.
Belpaire boilers have never been my thing, but the fit and finish quality of some recent releases (eg. BLI H10s) makes those engines truly worth having, and I just picked up a great example.
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Post by Gary P on Jan 26, 2016 10:28:49 GMT -8
Interesting comments..... For me, while I still like kits, I am certainly no expert at building them. Most any of today's RTR models are much much better than anything that I can produce.  Still, if it doesn't require craftsman level skills to build the kit, I can have fun with it. With that said, I am simply amazed at the skill levels and the resulting models of many of our forum members that share their efforts on the SPF threads. Some fantastic work being done out there!  |
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Post by mlehman on Jan 26, 2016 11:44:21 GMT -8
Good thoughtfuil and much appreciated comments Years ago I built a small fleet of Intermountain reefers and box cars from kits. They are very nice kits, and among the finest detailed kits I ever tried. I have no problem with the quality of their kits. I hated every minute of the process. It took me an average of 3 hours per car to build them (even as I got the instructions memorized) and when I was done I was not happy with the quality of the results versus what could be purchased rtr, assembled in China, the exact same cars for $5 to $10 more at the time--assembled to a higher standard of quality than what I accomplished. SNIP My time is very valuable to me. There's only so many hours in a week and so much to do with two active boys involved in sports, etc. When I compare my hourly pay rate to the cost of Chinese labor, and the quality they generally accomplish, it is much more cost effective for me to pay the Chinese labor rate, and will be for years to come. SNIP I hear what you're saying. I think your appreciation of the value-added by RTR stuff is an entirely valid one. It's the same with me and Blackstone. They build things that I've already done several of. This frees me to build stuff unlikely to be RTR and work on the layout more generally. My irritation is with those who think for a few dollars more everything should always and every time be 100% or they just blow up about how they're getting ripped off by folks who just don't give a rat's butt and how they couldn't possibly put something like that on their (not illustrated) layout. I view others mistakes in terms of my own. If they're doing way better than I am on average, I don't begrudge tiny stuff too much unless it rises to sharp stick in the eye level. Then there's always the return policy and the warranty. I've not been burned badly yet. Maybe I just don't buy enough stuff? The way some tell it, they're being shipped shoddy product nearly every week??? Not my experience in almost a half-century in the hobby. Like a lot of things, it may seem the worst of times, but it's still a lot better than it used to be and that wasn't half bad. |
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Post by grahamline on Jan 26, 2016 11:52:52 GMT -8
Decorated and assembled freight cars and engines are pretty handy and many are well done. But if you are trying, for example, to replicate UP operations in Bingham County, Idaho in 1974-76, you still have a fair amount of painting, detailing and decaling ahead of you. Not even the brass builders of the past got more than a segment of history nailed down.
The nice thing is that almost all of the detailed, assembled stuff is available at discount some time after its release. Lots of people are unloading impulse buys these days.
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Post by WP 257 on Jan 26, 2016 21:06:33 GMT -8
Well said. There is no substitute for real modeling and some of the forum members do it to nearly museum quality level.
Perhaps you've noticed I horse-trade a lot of trains, to try out different things or the newest, latest and greatest for whatever reason. I have experienced some dreadful QA/QC issues with certain manufacturers' diesels...which helped lead me back to steam power. As a general rule, there are certain manufacturers that I don't care what they build or how detailed it is, the QA/QC is a legitimate concern, and I simply don't buy their stuff anymore, or at least not any diesels (yet the steam was much better).
When I really wanted a particular diesel model in a particular roadname, and inspected more than 12 units all of which had cosmetic fit/finish problems that I could not possibly repair adequately...that was the end for me.
I'll take steam. It's harder to mess up black and graphite, Glacier Green, or Brunswick Green (and I'm not even historically a PRR fan or SPF "Slobbering Pennsy Freak").
YMMV.
John
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Post by llxlocomotives on Jan 27, 2016 8:40:16 GMT -8
Brass has always been a very limited production with heavy emphasis on the collectors market. Yes in the fifties and sixties, the options overall were so limited that some brass was bought to run. The drives were better that the cheaper options. Particularily in the manner they were run. Most brass in those days came as unpainted brass. Because of the to size or the production run, they were always a risky endeavor. The most successful ventures were based on a particular model builder, who worked through company xyz. When he was no longer around, company xyz tended to disappear.
Today, with the quality and quantity of lower cost options as they are, the percentage of brass that is strictly in collections has risen. The other aspect is that if it was a good representation of the subject, the it ls still likely a good representation, so the collectors may still prefer a given 30 year old model be a noted model builder than a new release of the same model. So the collectors are not necessarily driving new releases.
Stating that production can not be established in a country because a brass project failed to do so is an over simplification. Most cultures have the by hand history to master what is needed to master the cosmetic work. Success or failure is based on how the overall model performs in looks and electro mechanically. The collectors will be satisfied with looks only. The overall quality in the product has to have expertise in the design and in the manufacturing process.
This experience can be developed. But not on a time scale to risk a sizable percentage of your product catalogue in the development. If it happens, a company like Walthers, Athearn or Atlas will probably start with a fairly easily rendering and build on the capability. That is likely in the works by a number of the bigger companies.
What at will China do when this starts to happen?
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Still, if it doesn't require craftsman level skills to build the kit, I can have fun with it.
