More bad news from China for Atlas, IMRR and other companies

bremner Jul 28, 2018

  1. Wojo

    Wojo TrainBoard Member

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    As I sad before, there are inherent risks when one outsources, as well as potential awards. OTOH, there are not many folks who could actually live on the wages generating the higher labor costs that would occur if production was returned to North America. That's part of what makes the issue of on shore vs. off shore manufacturing. Personally, I believe it could be done. Goldman Sachs recently released a report concerning the efficiency of American manufacturers. Circumstances are different than they were twenty + ears ago when the manufacturing migration to the far east began. Needless, to say, this situation will be resolved, most likely by employing another off shore source, and all will go well until the next interruption.

    Boris
     
  2. YoHo

    YoHo TrainBoard Supporter

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    The guys at Rapido were once asked why they couldn't build their models in the US like Kadee and Microtrains. Their response was that basically, the factories in talent has been making couplers for decades...couplers that cost pennies to make, but sell for dollars. The profits from the coupler sales enables the 2 companies to afford the startup costs for US based manufacture. Plus, Talent Or has pretty low cost of living.

    Doesn't explain accurail, which is in small town Illinois, but, to my knowledge, doesn't have a revenue source like KD/MT.

    Sent from my SM-T377V using Tapatalk
     
  3. BarstowRick

    BarstowRick TrainBoard Supporter

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    There may very well be other things going on here.
    For example the Chinese celebrate holidays and some of them are as much as a month long or longer. All production ceases, plants are shut down and non-viable business's close down.
    The Chinese are smart business men and have been for decades. They now how to create a buyers rush on products by closing down a plant temporarily. That engine I've been looking at...well...I better get busy and buy it. If we all do that then the hobby shop shelves get cleaned off to make room for the new line of products coming out.
    Then there's the political games they've played well over the last centuries.

    Again just some thoughts shared.
     
  4. 501

    501 TrainBoard Member

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    The N Scale Enthusiast note to our members:

    As you may have heard, one of the largest factories in China serving the producers of N Scale in America abruptly and unexpectedly closed its doors. This affects most of the suppliers of our special runs including Fox Valley, Atlas, Intermountain, and Bluford Shops. All of the Special Runs that we have scheduled or are waiting to receive are in a bit of limbo at this time. We are doing our best to help our valued partners in placing the projects at other factories, but we ask for your patience at this time as our friends scramble to relocate production.

    While we wanted to wait until we had more information on the progress, many of you have been asking us what is going on, hence this message. We will do our best to keep you informed as to the status of many of these cool projects and when they might arrive as soon as we know. In the meantime, please check the website for what is on hand and what is coming from our US based supplier, Micro-Trains Line.

    I would ask you to refrain from grousing about overseas production, as with the current manufacturing climate there is no way to alter the path that manufacturers have taken given the size of our hobby. The manufacturers are doing the best they can to be viable in a sea of change, both politically and financially, and as special run producers, we are along for the ride.

    All of that said, our ambitious projects keep rolling down the tracks! We expect to ship the very cool Heinz 3D multi media enclosed and 4 vat cars to those who ordered them on Friday. Also shipping Friday is the never before produced NASA ATK Pegasus Rocket Launch System demo cars. These are two great projects for you to enjoy.

    Source
     
  5. bremner

    bremner Staff Member

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    Chinese New Year is the only month long holiday...
     
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  6. WM183

    WM183 TrainBoard Member

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    I reserve the right to grouse.
     
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  7. BarstowRick

    BarstowRick TrainBoard Supporter

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    As do I!
     
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  8. Mr. Trainiac

    Mr. Trainiac TrainBoard Member

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    KATO is made in Japan
     
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  9. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    Too many (USA) folks fail to understand that once you leave our borders, you are subject to any and all the whims of this world. Our laws are meaningless to other nations. Treaties, trade agreements just so many pieces of paper. We do business one way, others do it their own ways. Moving from our shores is nothing more than a gamble. If it works, great. If problems crop up, potential for disaster and losing it all. Those who have moved decided taking an enormous chance was worth it. (Yes, it is enormous. What is well today, can change within a matter of hours!) NO blame attaches to anyone else but those who made a decision to move.

    So it goes... :( We can only sit by. Hoping this will all shake out, in a positive way.
     
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  10. Eagle2

    Eagle2 Staff Member TrainBoard Supporter

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    I'd almost think what Ken said applies in almost any case where some portion of the manufacturing process is contracted to others. Some measure of control is necessarily lost, and while legal remedies may be available those do tend to be reactive and after the fact.
     
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  11. RBrodzinsky

    RBrodzinsky Staff Member TrainBoard Supporter

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    While there is, certainly, an extra level of risk when going off shore, even staying all within one’s own country still leaves one at the mercy of your supply chain. Every manufacturer is dependent on a supply chain, just depends on which degree. A few years ago, I was being deposed in a law suit by a supplier, who was, in part, claiming that he provided a “key and critical part” to us. True, but as I said to his attornies, every part is “key and critical.” Our manufacturing line once shut down due to running out of a specific screw (the most recently received batch failed incoming QA).
     
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  12. Hardcoaler

    Hardcoaler TrainBoard Member

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    I'm still rather surprised at the suddenness of this event. Assuming that the story of the Owner's want to retire is true, why wouldn't the Owner plan for a profitable transfer of ownership rather than a rapid exit? Seems hard to believe that nobody in China is interested in adopting the business.
     
    Last edited: Aug 4, 2018
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  13. BarstowRick

    BarstowRick TrainBoard Supporter

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    Your thinking like a red blooded American and they aren't.

    There are several manufacturing companies here in America that would like to pick-up production of these model toy trains. Today's technology makes it easier then ever to mass produce quality train equipment. "But"....(the yeah but committee at work here)....(of what we would hope to be intelligent CEO's, really!) still talks up the virtues of off shore production. Looks like they are getting what they pay for. And we are stuck paying the price.

    Just my turn to grouse some more.
     
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