For an intermodal junkie like me it's been rough these past few years. Kato has put out some nice Maxi I's and IV's, BLMA put out nice spine cars and trailer flats, MT continues to pump out the 89' flats, and Atlas now also has 89' flats. Heck, even ConCor has made much needed 53' containers in JB Hunt and Schneider! And the Trainworx UPS trailers? Wow! But the party is incomplete without the granddaddy of them all. I continue to hold out hope that all will return to normal one day...
I had emailed Dave a couple weeks ago about the maxi-IVs and this was his reply: I have asked the factory the exact same question but have not received an answer. They will often just press ahead if they are behind by about a month and then invoice the goods when they are ready. That is all I can tell you at this time. Thank you for your interest in our Maxi-IVs. Regards, Dave
Just so no one gets me wrong...as usual. I feel bad for Dave. I feel for Paul and Atlas. I hate to see any model train manufacturer have go through this.
It's certainly cheaper than employing a local to oversee your short production windows. Not all over again. It's from the same issue/factory way back. One factory pretty much brought the industry to it's knees because of some government entanglements.
Provided that any required trips were infrequent. If there is any regularity involved, then a tipping point could easily be reached.
23 years ago the company I 'used' to work for was an automobile parts supplier for OEM and aftermarket cooling components. The aftermarket production was moved to Mexico; OEM stayed domestic. With transportation added in, the comparison margin on a per unit basis was thinner than you'd think, even with the huge difference in labor cost. It was under a dime per unit then. Company also had overseas operations in Europe and Canada, it wasn't the first rodeo. 2 years in one of the major aftermarket distributors started screaming. Product was literally disintegrating in the boxes in storage, you could pull a unit apart with your fingers. Forensic examination showed extreme corrosion underneath the paint. Turned out that something taken completely for granted in domestic production, a reliable source of clean rinsewater post-fabrication to remove the flux and cleaning solvents - wasn't so easy in Mexico. They'd been out of water down there for weeks and had been recycling the rinsewater instead; so bad it was almost pure acid. Apparently they thought this was neither unusual or unanticipated. Thousands and thousands of units had to be recalled and destroyed. Brand name permanently ruined with heavy financial losses. That effectively killed the entire aftermarket business. Company and brand was subsequently sold. Today you can google it and not even find it, and at the time it was the #2 brand in the US. Completely gone now. Yes, product could be manufactured cheaper; the danger is always that things you 'assume' and take for granted here, everything from water to infrastructure to a stable government, ain't quite so easy elsewhere. I've worked with manufacturing in three countries, and it's those 'assumed paradigms' we have that get you. It's really hard to anticipate, price, and resell unless you've got experience, clout, and actual understanding of risk.
Surely--you being one of the most vocally price conscious members on the forum--you would recognize that the extremely price conscious consumer is the main reason companies operate in China to save 10 cents (or 10 percent, or what have you) per unit. I find it interesting that you would say that. It could be said that they reap what *YOU* sow. Rocks, glass houses, etc.
From the guys I know.....it's usually once a year. Maybe twice. And that's even one of the big boys (who does mostly HO anyway).
I hate to be the one to point this out. Most likely I will have to duck for cover after I said it. There's a lot of things in life we can fix...but...we can't fix stupid. Something about everything I've been reading says... Thinking China, is the place to go for manufacturing...well. With the experience we have with them and the poor track record. Can we safely say this is "Stupid" to continue to do business with them?:wideeyes: Just asking.
If moving production to China results in bad results...it's simple...bad decisions produce bad results. If it had worked out...good decisions would have produced good results. It's NOT rocket science....you reap what you sow... thnxs. Product that is available at a slightly higher cost ( Made in the USA ) versus no product to sell or buy at all...do the math. ;-)
Some are saying that to produce DI's products here in the U.S. it's a marginal cost. While it is possible, I don't think it's quite that simple. First off, at what price point will the consumer pay for a U.S. made item over overseas? Do you hire a market research firm to study it? There's more cost added to the item. Or do you take an educated guess and hope your right. Obviously, this is harder for less expensive items like containers vs. the Maxi's. And since being smaller runs, I would venture to guess it's quite difficult to find a firm with the proper injection molding equipment with the excess capacity to take a smaller on a project to make the items. Then if you do, there is the good ole economy of scale coming in to play. Basically, the more of an item you produce, the smaller the unit cost is. So producing 500,000 of something is cheaper than 5,000 of something. So a smaller run's unit cost is higher as the cost of initial set up, etc, is not spread out over larger item numbers. Then the painting is the hardest part since the our EPA regs are getting even stricter It's cheaper to send things overseas to paint and send back than to do it here I've heard. Not sure how accurate that is, but it does sound feasible. Not to mention our big banks are not really into financing smaller business operations these days. But that's another story and soap box I will refrain from standing on. Since production costs are rising in China now, anyone care to guess which region production will be moving to in the next 5-10 years?
Figure the cost of each visit to China is between $5000 and $10,000 per person. You can employ a Chinese guy for a lot less than that. A company doesn't need a full time person to check with the factories. Chinese work on relationships. If your company has a guy visiting the factories, your stuff will be at the front of the line. A relationship with the QC department is also essential. Ask me how I know this? The rejection rate on the Chinese products I sell is zero. I can get samples built correctly the first time delivered in 3 weeks.
^ Except that there's something to be said about having the actual "guy" on the ground looking at his own product. Not relying on a local.
Jason Shron, from Rapido has said in his newsletters (or maybe on a different forum) about mentioned this, if you want to bring production back to North America, remember Rapido is Canadian, the cost per item wouldn't go up just a few cents or few dollars...it would go up 4 times as high. Its not a simple raise in cost, but a HUGE jump in cost.
Someone like Dave "continues to do business with them" because he has no choice..Even when he first bought DI,the manufacturing was being done in China..Once you're there,you're pretty much stuck..With their laws,once they manufacture a product,yes,you own the molds,but just try to take them out of China.Oh,yeah,you can have them MAYBE sent to another factory,but that's about it.If Dave wants to move production here,it could take years to get his molds back..You can't fight China.You should see what's going on there with their auto industry. The manufacturers there are outright copying other builders cars almost bolt for bolt...Those companies sue those car companies in Chinese courts,you know what they get? "We're sorry Mr. Benz,but we don't believe the Hong Wang Galaga looks anything like your C Class.." When you have car companies like Renault,BMW,Mercedes,ETC,companies with BILLIONS of dollars getting nowhere with China,what do you think one guy from New Jersey is gonna do? DI is a really small operation,Dave got hammered with a flood only a few years ago,had to move,went through the same market crashes and downturns we all did.I seriously doubt he can even afford to go to any kind of trade shows,I know I can't afford it with my business as bad as it is.I mean,really,what's the sense of beating the guy up? Not like he doesn't want to sell you his stuff,I'll bet he's a lot more upset than you are....
At the time of sale, deLuxe was producing 50% of it's products in the USA, and 50% in China. This was a strategy that we tried to maintain so that we could balance the vagaries of Chinese production with the cost of American production. Part of the challenge in operating in the USA was finding sufficient people to actually operate the equipment at a quality level and a price level that the market would accept. Our turnover in California was low, but none of the people involved in production were willing to move to New Jersey. Couple that with the fact that I personally trained the printing staff, and Dave did not have that experience. Dave sent the US based tooling to China as he determined, perhaps correctly, that he was not going to be able to find the people he needed to duplicate the type of operation that we had set up. Had Sanda Kan not pulled the crap that they pulled, it would have all worked out fine, and product would have flowed better than it ever had. Couple that with his flood damage, and he was in a difficult spot. He is trying everything he can to get the product line back out to you. I am proud of what we created with deLuxe. Dave was a great choice for someone to continue the effort with his version, Deluxe. Circumstance kicked him hard, but I believe that he will pull off a full recovery. Hopefully very soon. George Johnsen still N Scaling after all these years...
Thanks for the insight, George. It's always great to hear from one who was there...I also believe he will recover completely. Meanwhile, I emailed Dave on the 18th and have received no reply.
Dave will be in Roanoke in June. You can talk to him there. He has had a string of bad luck. But he wants to keep everyone happy. Its just out of his hands now. Remember, he's an active modeller also.
