Atlas acquires Microtrains

[ridinshotgun]

Scale Trains possibly. But.... then i look at FVM offerings.... oh wait.

If they had bought it they would say that the MTL molds didn't meet their standards and would require a completer retool of every mold including the couplers and trucks.  Then double the price saying they had to reengineer things to offer sound in everything including the trucks to be prototypical!

[EJN]

Scale Trains possibly. But.... then i look at FVM offerings.... oh wait.

Pretty much the same as Exactrail since they bought them...

[James Costello]

If they had bought it they would say that the MTL molds didn't meet their standards and would require a completer retool of every mold including the couplers and trucks.  Then double the price saying they had to reengineer things to offer sound in everything including the trucks to be prototypical!

As frustrating as you may find this, I'm sure ScaleTrains hates it more. I can't imagine buying a product line and then not being able to use it as-is is a fun time for anyone.

[peteski]

As frustrating as you may find this, I'm sure ScaleTrains hates it more. I can't imagine buying a product line and then not being able to use it as-is is a fun time for anyone.

Um, then why even buy it in the first place? Just to mothball the tooling?  The complete models could easily be evaluated for quality and detail before purchase, and I suppose they were able to look at the tooling before signing the papers.  Or they just blindly bought the whole thing just to be surprised?  Seems like not a very good way to acquire a business.

[James Costello]

The complete models could easily be evaluated for quality and detail before purchase, and I suppose they were able to look at the tooling before signing the papers.

Could they? Or are you speculating?

Or they just blindly bought the whole thing just to be surprised?  Seems like not a very good way to acquire a business.

Maybe they have regrets.... But the idea that this was their plan or they want to sit on tooling / just want to jack up prices and not be able to just roll it out as-is as a value line or mothball tooling is just absurd. Of course they are frustrated.
 

[peteski]

Could they? Or are you speculating?

Sure, those models were produced and available for purchases, not some not-yet-produced prototypes.  They could find (buy or borrow) some of the existing models and see if they were good enough for them.  Right?

[James Costello]

Sure, those models were produced and available for purchases, not some not-yet-produced prototypes.  They could find (buy or borrow) some of the existing models and see if they were good enough for them.  Right?

How can you assess the current condition of tools and dies (ie, manufacturing equipment) from an already produced model? The issue isn't the "good enough" of the model..... it's been the usability of the equipment.

[peteski]

How can you assess the current condition of tools and dies (ie, manufacturing equipment) from an already produced model? The issue isn't the "good enough" of the model..... it's been the usability of the equipment.

Again, I meant the overall quality of the produced models.  Scale Trains likes rivet-counter type of detailing, and the models we are discussing aren't up to that level of detail (even with the molds in top condition), so the molds would have to be reworked to bring them to rivet-counter appearance.  That is all I was describing.  Anyway, we are again going in the corn field, so whatever . . .

[Ike the BN Freak]

Again, I meant the overall quality of the produced models.  Scale Trains likes rivet-counter type of detailing, and the models we are discussing aren't up to that level of detail (even with the molds in top condition), so the molds would have to be reworked to bring them to rivet-counter appearance.  That is all I was describing.  Anyway, we are again going in the corn field, so whatever . . .

If the model is not up to rivet counter quality, they can run them as operator, look at the Silverside Gons that FVM did that they are now doing.

[Sokramiketes]

Again, I meant the overall quality of the produced models.  Scale Trains likes rivet-counter type of detailing, and the models we are discussing aren't up to that level of detail (even with the molds in top condition), so the molds would have to be reworked to bring them to rivet-counter appearance.  That is all I was describing.  Anyway, we are again going in the corn field, so whatever . . .

Peteski, wrong path of thinking.  James has it right. 

The issue is that half the tooling was FVM and half was "factory" tooling.  When you buy FVM tooling, you don't get a complete GEVO for example.  Think about bushings, gears, wheels, etc. that may be stock factory parts used in various locomotives.  To bring them into the ScaleTrains ecosystem, they chose to make them ScaleTrains compatible rather than recreating the Affa factory parts that wouldn't do them any good in the future.  It would have been a bad investment and dead end investment. 

[OldEastRR]

I think if all that this development brings is Atlas equipment forthwith comes with MTL trucks and couplers, and Atlas adopts the MTL high-quality printing and weathering for rolling stock, that will be satisfying enough. Let's not expect rainbows and unicorns.

[randgust]

If the problem is finding qualified employees that know what they are doing, just a thought.    We have one of the finest plastic manufacturing university schools 60 miles from me, college town, area that is as much into injection molding as anywhere in the US today, with Erie PA also being a railroad town to boot, home of GE/Wabtec.   So if anybody from Atlas is actually monitoring this, pay attention:

https://behrend.psu.edu/school-of-engineering/academic-programs/plastics-engineering-technology/plastics-processing-labs

It's an entire region skilled in plastic injection and assembly.   Our own town is host to a massive plastic injection facility, rail served, that competes with China and supplies Disney:
https://www.whirleydrinkworks.com/

[NSEGeorge]

Sound ideas, for sure. But maybe not viable for this industry?

I am extremely familiar with educational programs that put manufacturing folks out in to the world, and they turn out some fine state of the art trained folks. The problem is, our industry runs on dinosaurs. We don't use automation and state of the art presses in any great numbers. MTL in particular had some of the oldest presses I have ever seen. While the tooling format they use could be adapted to more modern equipment, the training that the folks receive at schools could not easily be adapted to older equipment. It takes a special kind of head to do things the old way.

Also- I am very familiar with Whirley-Drink-Works from the real world part of my life as a film and theme park professional. They do amazing high quality work. However, the smallest order from them that we have ever done is 10,000 pieces for Great Wolf Lodge.

There are darn few items in the model railroad industry that would remotely qualify for Whirley, or nearly any modern US production shop. Actually taking the time to set up, test, and produce any of our train car molds would require set ups and the cost would kill any skill advantage and shipping cost. When we still had deLuxe before it was sold and ruined, we used a job shop in Encino, California. Roger was a two man band, and was able to mount our dies in a MUD frame (Master Unit Die) that accommodated many of our similar size products so that the tooling cost was lowered to inserts. That did lower the cost of tooling, but mounting and set up costs were the same as having a dedicated mold. We lost access to that shop when Roger decided to retire and was unable to sell his business. As it turned out, he eventually moved part of the shop out of the area and was beaten down by overhead issues. This is one of the reasons we decided to sell deLuxe, as we did not want to become fully dependent on China. Between not being able to find people to do our decorating in house and the cost of production, it proved impossible to stay US based. We tried it, it was too much of a hassle for a small business, so our choice was to fully pivot to being an importer, or sell. 

I think many are missing the point on just how small and unique the industry that serves our hobby is. We do tiny runs compared even to other hobbies. For example, if a Scalextric does a run of Porsche 917's, it is in the area of 20,000 copies of the same body. The most significant part of that run is NOT the plastic. Plastic is the easy part- once it is set up, it runs. What MicroTrains would do because they had their own shop was plan products over a year in advance, and stockpile bodies accordingly. Not everyone could do that due to space and cost.

The hard part is the decorating. Again, Scalextric might split their 917 Porsche run into two schemes @10K each (Gulf Blue and Orange, Salzburg Red and White for example), but setting up the decorating for 10,000 examples is a HUGE difference from what happens in our hobby. In N Scale, if you are doing a run of 300 pieces (MOQ from some MR suppliers overseas) unless it is a really common prototype, you are going to have inventory sitting on the shelf, and that becomes money you can't invest in new product.  Many typical runs of model railroad products are as short as 50-75 pieces of a scheme/road number. The set up costs for paint masking and print decoration with pad (or tampo) printing raises the amortized cost of each item significantly, and most suppliers will simply pass as it isn't worth it. This is coming down with the advancement of printing technology, but the industry is not in a growth cycle, so it becomes a race for survival instead of a necessary increase in profitability.

People like MicroTrains run on very low margins. Labor cost is high, amortizing the training cost of an employee is high, the demands of hobbyists for more and more accuracy means that development costs of plastics and printing are ever increasing.  I saw some comments on the book of faces that "Eric Smith must be getting a lot of cash" from this sale. I had to laugh. I know what the business was 'throwing off' in profit, and there was no way that any purchaser could spend a ton on the company to try to justify the cost out of the 'disposable income' from the sales. It had to be a play to grow the market, or reduce overhead to make it pencil.

Atlas has big challenges ahead to continue the culture of MTL that we have all come to cherish, but thank goodness they were willing to take the plunge. The alternative in a very real possibility was a complete shutdown.

[Sokramiketes]

And even when you do find a state side toolmaker used to intricate small tooling, there's difficulty in explaining how important the outside of the vessal is (boxcar body accuracy) vs a precise interior volume/shape (medical grade devices). 

 That's where I'd see a difference in educated tool makers, drinking cup manufacturers, and our very different industry. 

[Erik W]

I think many are missing the point on just how small and unique the industry that serves our hobby is. We do tiny runs compared even to other hobbies. For example, if a Scalextric does a run of Porsche 917's, it is in the area of 20,000 copies of the same body. The most significant part of that run is NOT the plastic. Plastic is the easy part- once it is set up, it runs. What MicroTrains would do because they had their own shop was plan products over a year in advance, and stockpile bodies accordingly. Not everyone could do that due to space and cost.

The hard part is the decorating. Again, Scalextric might split their 917 Porsche run into two schemes @10K each (Gulf Blue and Orange, Salzburg Red and White for example), but setting up the decorating for 10,000 examples is a HUGE difference from what happens in our hobby. In N Scale, if you are doing a run of 300 pieces (MOQ from some MR suppliers overseas) unless it is a really common prototype, you are going to have inventory sitting on the shelf, and that becomes money you can't invest in new product.  Many typical runs of model railroad products are as short as 50-75 pieces of a scheme/road number. The set up costs for paint masking and print decoration with pad (or tampo) printing raises the amortized cost of each item significantly, and most suppliers will simply pass as it isn't worth it. This is coming down with the advancement of printing technology, but the industry is not in a growth cycle, so it becomes a race for survival instead of a necessary increase in profitability.

People like MicroTrains run on very low margins. Labor cost is high, amortizing the training cost of an employee is high, the demands of hobbyists for more and more accuracy means that development costs of plastics and printing are ever increasing.  I saw some comments on the book of faces that "Eric Smith must be getting a lot of cash" from this sale. I had to laugh. I know what the business was 'throwing off' in profit, and there was no way that any purchaser could spend a ton on the company to try to justify the cost out of the 'disposable income' from the sales. It had to be a play to grow the market, or reduce overhead to make it pencil.

When I was a production coordinator at InterMountain Railway back in 2004 through 2006, my observations of the industry from the inside were the same.   As far as run size -  The cylindrical hoppers would have the largest runs.  With certain popular road names having 1200 or so.  Popular locomotive models/road names would be 400 to 500 in a run.  With smaller runs of as little as 150 for less popular roads.  I think we even did runs of the N scale F3 as small as 50 per road name.  Most jobs at InterMountain at that time paid minimum wage with next to no benefits.  One thing I noticed in that two years from going to shows was that the modeling public seemed to think the industry was bigger than it was.  And also that the industry (both companies and employees) were making good money.  Not really true at all.  That said, the industry is a labor of love, so lots of the folks I met at other companies were also passionate about model railroading and trains.   I'm hoping for the sake of this Atlas - Micro Trains marriage that by tapping into that passion they can pull it off to most people's liking.

Erik