Athearn and N Scale

[CBQ Fan]

In the Bmann S unit topic it came up that Athearn is getting out of Nscale after this year.  I posted a question about this on their Facebook page and within 15 minutes I got the following response:

"We have a-lot invested in N scale and have no plans to stop producing N scale products. We'll be shipping the Challenger and Big Boy early this year and will be caught-up on production for most N models affected by the factory closure by early this Summer. Several weeks ago, we penciled-in our production plans for late 2013/early 2014 and the list included several N scale items."

I think that is great news and hope to see some new products!

[central.vermont]

We will need to quiz them at the Amherst Model train show in Springfield Mass.

Jon

[Scottl]

Just an observation and an opinion.  Why are people so fixated with what the manufacturers are producing or not?  I'm not directing this at either of the previous posters, but it is a general theme that pervades TRW and comes up seemingly daily.  Threads with someone actually building a layout or modelling are often followed by a few responses (with notable exceptions), but if someone raises the issue of Athearn, Walthers, Kato, or horror, MTL!, it is eight pages of posts with, in some cases, the expression of barely contained contempt for these companies.  Some get so imbued with nastiness, they end up flaming out and locked up.  I just don't get it.

Rant over, back to our regular programming.

[C855B]

Easy. Without product there is no hobby, or it is a completely different hobby. We fixate on product since it is the means to our end, which, in N, is more often railroad modeling rather than models of railroad equipment. I cringe every time I see S scale at a train show, immediately drawing a mental picture of the personal commitment it would take to amass enough power and rolling stock to represent mainline operations. S is a modeler's scale, yes, I get it, but modeling equipment is not my objective, modeling operations is.

If it's vitriol you (don't) want to see, let me throw this little firebomb out here for everyone to jump on... there was a lone rep for BLI sitting in a "big" booth on manufacturers row. He had their current HO offerings spread out on two or three tables - LOTS of Centipedes, which were indeed lovely. But there was nothing else in the booth, no displays on shelves, no catalogs, no signage identifying who it was... it was only the logo on the rep's shirt that tipped me off to who it was. It also appeared from the location that the booth was (edu-guess) originally slated for Atlas; BLI normally gets one of the side booths next to one of the majors.

Anyway, I approached him with a friendly "Nice to see you here. I love my N scale E8s, and would really like to have more. Will there ever be a rerun in UP?" He replied that, yes, reruns are in the plans, so stand by. So I took the opportunity to gently rib him about the M1a, and got this surprising response, "Oh, yeah... it looks like we're actually starting tooling this summer. Shouldn't be all that far away," or something to that effect. Expecting a mea culpa in the good humor I intended, I was stunned.

[ljudice]

What's kind of sad is that Athearn did two of the best N-scale freight cars of all time (IMHO) - the LPG tank cars and the Ethanol tank cars.  These are hard to find and demand a premium on Ebay and they could sell out any time they make them.

If n-scale doesn't produce the return they need on THESE cars,  I just have to wonder....

[C855B]

[Per Athearn via official channels:]

"We have a-lot invested in N scale and have no plans to stop producing N scale products. We'll be shipping the Challenger and Big Boy early this year and will be caught-up on production for most N models affected by the factory closure by early this Summer. Several weeks ago, we penciled-in our production plans for late 2013/early 2014 and the list included several N scale items."

Notice they didn't say new N scale items. What they say in their documented PR versus the unfiltered scowls and badmouthing I get discussing N with Athearn and Horizon reps in person appear to be entirely different things. This dichotomy is remarkably similar to recent experience with a car manufacturer over a specific model I am an enthusiast of and member of the fan community. Every indication from unfiltered production intelligence and other reading between the lines was that the model was being discontinued, yet every inquiry through official channels was, yes, the Belchfire II is in engineering and we expect to announce any day. This went on for three years, until the last planned "unit" was committed and they weren't holding the bag on unsold units.

This behavior is from the Product Relations 101 playbook. You don't announce product end-of-life or otherwise let it be known that you are exiting a particular market until your costs are absorbed to the extent you expect to be able to absorb them, at which point you quietly liquidate remaining stock and parts. I've said before that I don't wish the Athearn situation to turn out this way, that I am a big supporter of their product and throw serious money in their direction. It's just frustrating that ever since the CEO I met at WGH Louisville four years ago was let go (shortly thereafter), Athearn and Horizon reps have been talking down N, at least to me.

... the LPG tank cars and the Ethanol tank cars.

I recall at least the ethanol cars are in the 2013 catalog for new production. Shame on me, I was so flustered by the tone of the chat with the Athearn guy I forgot to pick up a catalog for myself.

[mu26aeh]

If you trust the online catalog from their website, ethanol cars are ETA April 2013

[packers#1]

Isn't Atlas doing LPG cars?

[ljudice]

Isn't Atlas doing LPG cars?

Atlas has the older cars,  Athearn did 3 versions of post 1980 cars...

- Lou

[CBQ Fan]

I look at Athearn two way if they are not going to do or making any money with N Scale:

1) Why would you do a rerun of the Challenger or Big Boy if you are not making any money.  I would see these as high cost and big risk items.  How many of these does the average N Scaler need.  If I had a market segment that was drying up this would be an odd choice to try and force the issue.

2) If I can really make x number of times the profit (gross sales are unimportant unless you are looking at just cash flow and what purchasing power you have with it) in HO vs N scale why waste production capital trying to recoup fixed costs on a money losing product line when I can spend the same money on something that results in profit.  This aslo goes to #1 above.

I think Walthers is the only one who has a business model that actively hurts their N scale offering and they either don't get it or don't care.  All the other manufactures may have their issues from time to time but if you understand their company than you understand their production schedule.

Kato - US is not their main bread and butter
FVM - Smaller company growing into much bigger product offerings
Rapido - Small company with a main focus on HO

One final thought, why bother answering my post on Facebook on a Sunday morning if they are looking to dry up and eliminate this segment.

[CodyO]

I think Walthers is the only one who has a business model that actively hurts their N scale offering and they either don't get it or don't care.  All the other manufactures may have their issues from time to time but if you understand their company than you understand their production schedule.

I`d agree that it seems walthers doesn`t care and them buying life-like may have hurt N scale

[kelticsylk]

See my post in the Bachmann S4 thread.
https://www.therailwire.net/forum/index.php?topic=28429.0

[C855B]

1) Why would you do a rerun of the Challenger or Big Boy if you are not making any money.

Simple answer - tooling is already on the books, tooling being the lion's share of their investment. They know as much or more than we do about the traffic on eBay and that these models are holding their value "unnaturally" due to high demand, so it therefore follows there is considerable demand to be met in the primary market. As you stated, the money is lost already, but evidently somebody ran the numbers and the costs of reissues in the case of the big steam are less than the expected revenue, so here is an opportunity for more recovery of initial costs, or heaven forbid, profit!

Again, their concerns are about a product line (N) that they have identified as having poor return on the tooling investment relative to their primary HO lines. The Facebook response was official-speak so as to not torpedo sales on what they have committed to the pipeline. I take it with the grain of salt that needs to be applied to communications channels run by marketing departments.

[CBQ Fan]

Mike,

I am just throwing out a couple of ideas.  One thought that crossed my mind is that the person you talked to sounded more like an accountant than a sales or a marketing person.  Having done all three roles there is very little common ground.  Accountants typically feint and fall down when you talk about things like loss leader from my experience!   

You know the other concern I would have if I was a model railroad company is the tightness around production capacity.  With 8 bullets to put in my 6 shooter I want to put the biggest bangin' 6 bullets I had.

[C855B]

See my post in the Bachmann S4 thread.
https://www.therailwire.net/forum/index.php?topic=28429.0

Might be worthy of a repost in (or even moving to) this thread, Frank, where the discussion about N product strategies is more relevant rather than contributing to the thread drift I started while talking about the Bachmann S-4. Which is still IMO a very nice model.

Yeah, Brian, you might be right. When he started talking about spreadsheets I thought, "accountant", or "project manager". Since I'm a project manager I know well the problem of the boss calling me on the carpet about miscategorized costs and overruns. My butt still hurts from the last one.

But Frank hit on a great point in his post - the companies we mostly wring our hands about with unclear product plans for N are second-generation businesses where the original passion for the hobby passed with the founder. They seem to live and die by the balance sheet, trying to maximize the value of their inheritance (Walthers) and/or placate a corporate overseer (Horizon/Athearn). N will prosper with the passion brought by the talented young turks; maybe we should collectively gracefully thank the mature companies for their past support and express our wishes for future success regardless, and rally even moreso behind the FVMs, BLMAs and the others who bring the fresh passion.