07-24-2012, 08:38 AM
It's worth pointing out that Kadee has continued production in the US, bringing out models at prices and quality comparable to China. Accurail also has a market niche comparable to the old bluebox Athearn and does its production in the US. The laser wood and hydrocal structure manufacturers are all US-based. It's also worth pointing out that based on the presentation a VP of ExactRail made at several prototype modelers meets this year, Chinese prices had been rising to the point that their margins were squeezed, resulting in their decision to go direct-only.
I don't think the problem is exclusively capacity, and in fact the ExactRail guy had nothing to say about capacity, it was all costs from his viewpoint. I would guess that, as with other industries, the economics may be swinging back to allowing more production in the US. I would also guess that the obstacles there would include lack of working capital to move production back and open a new facility, and the various tax and regulatory burdens that inhibit hiring a new workforce. This would also apply to any new startup that might consider US based production.
I think business decisions by US firms also play a part. The line of US-made freight cars from the companies that were E&C Shops/LBF/Huberts were quite good, again like Accurail an updated and somewhat better-quality version of bluebox Athearn, but everything I've heard suggests that their failure came from things like overstaffing and lack of budget discipline, not foreign competition.
Right offhand, I think someone could make a go at a bluebox quality product line produced in the US, with quality equivalent to the Bachmann S-4 and Accurail, that substantially undercut the price level of what's coming in from China. The obstacles probably include regulatory and tax burden, lack of working capital, and business acumen. But it could be done.
I don't think the problem is exclusively capacity, and in fact the ExactRail guy had nothing to say about capacity, it was all costs from his viewpoint. I would guess that, as with other industries, the economics may be swinging back to allowing more production in the US. I would also guess that the obstacles there would include lack of working capital to move production back and open a new facility, and the various tax and regulatory burdens that inhibit hiring a new workforce. This would also apply to any new startup that might consider US based production.
I think business decisions by US firms also play a part. The line of US-made freight cars from the companies that were E&C Shops/LBF/Huberts were quite good, again like Accurail an updated and somewhat better-quality version of bluebox Athearn, but everything I've heard suggests that their failure came from things like overstaffing and lack of budget discipline, not foreign competition.
Right offhand, I think someone could make a go at a bluebox quality product line produced in the US, with quality equivalent to the Bachmann S-4 and Accurail, that substantially undercut the price level of what's coming in from China. The obstacles probably include regulatory and tax burden, lack of working capital, and business acumen. But it could be done.