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Hornby secure £18 million loan


lapford34102
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The key question is whether you want an instant "drop in" alternative to China, or whether you are willing to invest the time to develop the capability in a new location. I suspect Hornby don't have the money to make a choice, but other companies may well decide that the sums add up to develop new locations.

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They are doing some manufacturing in the UK - just got one or two of their acrylics in with the flag on, and they seem to be an improvement on the very hit and miss that has been the norm for the last few years of their range, if you could get them at all... Also some Airfix kits are being designed and tooled here - it has been mentioned before,IIR, and no doubt will be gone into more detail on plastic kit forums, but the latest 1/48 Stuka is all British, apparently.

 

post-2642-0-18724100-1532650148_thumb.jpg

 

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The key question is whether you want an instant "drop in" alternative to China, or whether you are willing to invest the time to develop the capability in a new location. I suspect Hornby don't have the money to make a choice, but other companies may well decide that the sums add up to develop new locations.

 

I don't think China is about to be usurped in supply of competent skilled piece-workers anytime soon.   I don't think Africa or many other places have such an abundant supply of not just workers but small factories, suppliers, technicians, supervisors, trainers, and so on. Nor the culture.  

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The world is changing. Hasbro CEO is Brian Goldner is eyeing up a move away from China production.

 

 

https://www.foxbusiness.com/markets/hasbro-to-move-more-production-outside-china-due-to-tariffs

 

https://www.toynews-online.biz/law-politics/hasbro-outlines-plans-to-move-production-operations-out-of-china

 

 

Mattel, LEGO and Hasbro already have significant factories in Mexico.

 

Expect to see more production from BRICS countries (Brazil, Russia, India, South Africa, ignoring China for this exercise) the MINT countries (Mexico, Indonesia, Nigeria, and Turkey). Don't forget to add in Malaysia, Pakistan, Vietnam and Bangladesh. Together that's a population of close to 3 billion.

 

Global sourcing is about to get really interesting.

The world is changing and wages are rightly increasing in China to hopefully give people a better quality of life and ultimately if this impacts on the cost of our toy trains then this is a price worth paying (both literally and metaphorically!), hopefully makingthe world a little fairer and more balanced. Eventually things will go fill circle and manufacturing is likely to return to these shores.

 

I really do think that we've never had it so good though. This is a luxury hobby not an everyday essential and we should enjoy the good times as and when they last!

Edited by south_tyne
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Mattel, LEGO and Hasbro already have significant factories in Mexico.

The LEGO Group has been in Mexico for a while now (Juaréz in 2006, Monterrey in 2009). This is to supply the North American market - not because of the recently changing situation in China. This was part of their manufacturing outsourcing strategy announced in 2006 - part of the turnaround plan by Jørgen Vig Knudstorp who was hired as CEO in 2004. Before then manufacturing was all in Denmark. LEGO group does plan to have 6,500 people in Monterrey by 2022. 

 

LEGO Group only recently (November 2016) opened a factory in China and that is to supply the growing toy market in Asia. 1,200 people are employed in the Jiaxing factory.

 

As others have said running a highly automated plastic moulding factory and packaging plant is not the same as making model railway items. Different employee skills are required.

 

Separate from the operational expertise and the 'institutional knowledge' of how to run such a factory, (which is now well established in Guangdong) what is needed to assemble model railway items are employees with the patience and diligence to stay focused on meticulous, fine motor skill work with very high accuracy for a full work day - and who will do so for relatively low wages.

 

Theoretically we could find such people anywhere but I suspect the intersection of these two parameters is much rarer than we might think. I'll not make sweeping generalizations about people in different cultures in the world, but clearly there are people who are both willing to and capable of doing this in China.

 

Another requirement is for local management to be able to effectively communicate with their customers (the model railway suppliers). For our purposes this effectively means some level of communication in English - which you can also find (despite some evident limitations) in China.

 

We are the beneficiaries of a form of commercial imperialism. Looking rosily at this, the 'good' side is, even though it is from one perspective exploitative, that it does raise living standards for the workers - which ironically we complain about when this results in rising costs.

 

The combination of these factors is easier to find in China today than other places. I'm not suggesting that it cannot be done anywhere else (Brazil is probably a meaningful alternative) but it's not just a matter of deciding to do so and opening a factory.

 

If LEGO applied multiple individually separate components to each brick, then we have a meaningful comparison.

Edited by Ozexpatriate
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Both Brazil and Mexico have significant motor manufacturing industries. The general standard of domestically run manufacture seems comparable with China (based on the VW stuff I've seen from both). They also contain factories for some major European brands. OK, putting cars together isd not, perhaps, directly transferable to model trains, but it still indicates a local ability to deal with complex, technical assembly tasks.

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I don't think China is about to be usurped in supply of competent skilled piece-workers anytime soon. I don't think Africa or many other places have such an abundant supply of not just workers but small factories, suppliers, technicians, supervisors, trainers, and so on. Nor the culture.

Certainly it won't happen overnight but it is easy to forget just what China was like 30 years ago. China has all of those positive attributes because they were developed. What we are seeing in China now is just the normal maturing of an economy. No different to South Korea and Japan before China and Western Europe before that.

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They are doing some manufacturing in the UK - just got one or two of their acrylics in with the flag on, and they seem to be an improvement on the very hit and miss that has been the norm for the last few years of their range, if you could get them at all... Also some Airfix kits are being designed and tooled here - it has been mentioned before,IIR, and no doubt will be gone into more detail on plastic kit forums, but the latest 1/48 Stuka is all British, apparently.

 

attachicon.gif20180725_164150.jpg

 

attachicon.gif20180725_164141.jpg

That’s interesting. I know the Quickbuild Range was getting manufactured here, I didn’t realise it extended to the main construction kit range. I’m happy to see that. As others have pointed out though, you can see how a simple pressing and moulding operation could be brought back as essentially its highly automated. However anything with high manual content will still be expensive. Of course you can design a product for minimum assembly and to cut the manual content . That’s maybe what Design Clever started out as , but got hopelessly lost with compromises too far. But that would be smart design , cutting out manual processing by whatever means .

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Might be a surprise to some but there is a manufacturing facility in Brazil for model railways, for over 30 years and they supply a mainstream manufacturer in the US. They additionally make rtr Brazil, South African & New Zealand prototypes in HO.

http://www.frateschi.com.br/web/?lang=en

Here an example of product..

http://www.frateschi.com.br/web/locomotiva-ac44i/

 

The skill exists beyond China, as jjb1970 says it’s not that these regions are unable to do it, it’s about investment in time and resources to make it happen.

 

If your driving round in a Mercedes c-class or a BMW 3, your driving round in a car made in East London (I don’t mean Dagenham ;-) or Pretoria, in South Africa. (BMW 3 just moved to Mexico and X3 just started a few months ago).

https://mg.co.za/article/2018-05-07-first-sa-made-bmw-x3-shipped-out

https://www.iol.co.za/motoring/industry-news/mercedes-invests-r10bn-to-build-next-c-class-in-sa-15700739

 

Having been to both plants in person, I can say they are identical to European car facilities with the same levels of automation, manual and quality applied. I’ve been to several such sites of manufacturing in Africa in many industries it’s there.. i’m Not saying it’s perfect, Africa has similar problems to China too... (workers who work at will, quality etc etc), but if overcome in China it can be overcome in Africa.

 

As China becomes more expensive, it’s only natural Chinese businesses will look to outsource to a cheaper location for parts and production in exactly the same ways and reasons that Europe first looked east. It’s quite clear China’s source for “cheap” labour is Africa, and equally they are quite defensive about protecting their new sources too.

 

It is feasible that some day you may launch a commission with an SDKmode or a Shinedew in China, only to find your model is shipped from Africa, in just the same way today you buy a German car and have it shipped from Africa... that’s globalisation and how reducing costs works. The trigger won’t be model railways, it will be any shift in the parts or assembly of any product using motors, circuit boards etc, by the likes of Foxconn etc. Who supply Samsung, Apple.

Edited by adb968008
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The move from production beyond China is not going to happen overnight and is not going to be complete but it is happening right now.

 

Customers of factories in Guangdong have seen how the area is transitioning away from toys, clothing and plastics to high-tech consumer electronics.  Western retailers and brands are seeing factories close that have supplied them for over twenty years.

 

The problems Hornby is experiencing with sourcing outside China will be largely down to micro-volume categories like model railways being pretty unattractive for factories.  Who would want to set up a factory to make low volume production runs for a category where the retail network is shrinking and the core customer base is dying?

 

The big risk for the hobby is if any of the remaining factories decide to close to model railway production.  We already see the challenge that the UK brands have getting production slots in China.

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Many of the complex cars and vans sold in Europe under French, Italian and I think one German, brands, are now made in Turkey. Egypt is also becoming a reasonably sized base of manufacturers of, particularly, heavy duty electronics and switchgear. Given the current political situation, that may not accelerate anytime soon, but it demonstrates you don't have to go half way around the world for cheaper manufacturing. That is not directly applicable to MR manufacture, but just an indication.

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Ford Transits are made in Turkey. For the Oz market at least.

Perhaps our dear friends of the EU can give Hornby a nice 18m loan to set up a manufacturing plant in non-EU Turkey, just as they gave Ford 80m  to close the Transit factory in Southampton and move Transit production to  Turkey.

 

http://www.dailyecho.co.uk/news/10020273.Ford_s___80m_EU_loan_to_boost_Turkey_factory___and_close_ours/

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Perhaps our dear friends of the EU can give Hornby a nice 18m loan to set up a manufacturing plant in non-EU Turkey, just as they gave Ford 80m  to close the Transit factory in Southampton and move Transit production to  Turkey.

 

http://www.dailyecho.co.uk/news/10020273.Ford_s___80m_EU_loan_to_boost_Turkey_factory___and_close_ours/

 

Sorry, but this breaches the no politics rules, and has subsequently been proven as nonsense. Southampton was going to close anyway as it was ridiculously uncompetitive (see FT and The Economist for the details in 2012), whatever that Echo article at the time claimed, and of course its follow up by the usual suspects in the MSM. No "EU cash" was involved. The EIB provided the loan, and is separate to the EU as an institution (27 out of 28 members have shares in it). Its policies (supported by the UK) include investment in "partner countries" to foster regional cooperation and development. Only about 10% of its funds are used for that, the rest is lent exclusively within the EU.

 

Ford UK received around 400m euros from the EIB a year or two before the So'ton closure, for R&D into green vehicle tech, and that has been used, in the UK. The UK as a whole received around 6 billion euros from the EIB in the same year the Southampton plant closed.

 

Similar claims were made about EIB loans to M&S, Jaguar Land Rover and even Dyson (a strident Leave supporter), and all demonstrated conclusively that the claims were unadulterated, skewed rubbish, by a further selective use of "facts" to twist the story.

 

You have repeated highly selective, scurrilous nonsense, promoted at the time by a scurrilous UK MEP of certain infamy. Please desist, here at least anyway. Feel free to peddle it elsewhere, as I defend to the death your right to hold and express such views, howsoever deviant. But don't expect to have them unchallenged.

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We will soon start to see Chinese quality advertised on products to differentiate them from cheaper, allegedly inferior products made in lower cost economies. I remember "jap crap" (apologies for the rather xenophobic nature of those words, but it was a common phrase at one time to describe goods made in Japan) as an effort to undermine the status of goods made in Japan, similar comments about goods made in South Korea etc. Germany has been very successful in promoting "made in Germany" as a sign of quality, in some cases it is fully deserved (eg. Beyerdynamic headphones, most of which are still actually made in Germany and which are superbly made) and in others not so. I fully expect to see a similar transition in the case of Chinese goods, it's already happening. If I look at stereo and AV equipment some of the Chinese manufacturers are competing at the high end, innovating and are proud (i.e. not trying to hide behind a foreign brand or front) of their Chinese heritage. And of course, the reality will be that many of the goods made in the lower cost economies will be produced to a standard as good as the more mature economies in the same way of other economies as they industrialise.

Edited by jjb1970
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Huawei, ZTE but a few in the IT and Telco industry are established global brands.

When it comes to switches, they have ousted Cisco in certain parts of the world.

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Huawei, ZTE but a few in the IT and Telco industry are established global brands.

When it comes to switches, they have ousted Cisco in certain parts of the world.

I think the fact that a company like Leica are prepared to be associated with Huawei says something as you don't build the sort of ultra premium and aspirational image and reputation of Leica to throw it away by sticking it on cheap tat. Like I say, in the world of stereo and AV equipment there are some seriously well respected companies now. In the industry I work in the Chinese shipyards are developing some very impressive designs and the better Chinese yards are now working to similar quality standards as the Korean yards.

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I have a couple of Frateschi locomotives from about 10 years ago. They are 'basic' by current standards in the same way that 1970s Mehano (made in Eastern Europe) were basic by the standards of the time. It was straightforward enough to hard-wire a decoder into the Frateschi but there were no 'modern' electronics. Rather curiously, too, (given that their prototypes tend to be North American) they built in 'OO'. I don't know whether that has since changed but the locos I have look OK alongside HO stock, until you realise that they should look a lot smaller! (CJL)

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I have a couple of Frateschi locomotives from about 10 years ago. They are 'basic' by current standards in the same way that 1970s Mehano (made in Eastern Europe) were basic by the standards of the time. It was straightforward enough to hard-wire a decoder into the Frateschi but there were no 'modern' electronics. Rather curiously, too, (given that their prototypes tend to be North American) they built in 'OO'. I don't know whether that has since changed but the locos I have look OK alongside HO stock, until you realise that they should look a lot smaller! (CJL)

Past Performance means nothing, to the future that counts.

but it means they have the basic skill, which is higher than no skill.

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Past Performance means nothing, to the future that counts.

but it means they have the basic skill, which is higher than no skill.

Fascinatingly, it wasn't that long ago that Bachmann was referred to as "Botch-man" on the American forums.  Life-like (the company that introduced the Proto 2000 line) was known as "train-set cr_p."  

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The move from production beyond China is not going to happen overnight and is not going to be complete but it is happening right now.

 

Customers of factories in Guangdong have seen how the area is transitioning away from toys, clothing and plastics to high-tech consumer electronics.  Western retailers and brands are seeing factories close that have supplied them for over twenty years.

 

The problems Hornby is experiencing with sourcing outside China will be largely down to micro-volume categories like model railways being pretty unattractive for factories.  Who would want to set up a factory to make low volume production runs for a category where the retail network is shrinking and the core customer base is dying?

 

The big risk for the hobby is if any of the remaining factories decide to close to model railway production.  We already see the challenge that the UK brands have getting production slots in China.

 

Let us hope that the new team at Hornby can manage this. I have every confidence they will.

 

I think they did amazingly well in 2011 after the loss of Sanda Kan.   I still have my rare desirable SK 34001 'Exeter's  ...  someday I shall be rich! :)

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Fascinatingly, it wasn't that long ago that Bachmann was referred to as "Botch-man" on the American forums.  Life-like (the company that introduced the Proto 2000 line) was known as "train-set cr_p."  

 

Brand image is a funny old thing and some companies have been masterful in manipulating image and perception to their advantage. Other suffer from a terrible image despite making some excellent products. I'm sure we all have other hobbies, one of mine is being a part time audio enthusiast and I love listening to music. Quite often some superb equipment is produced by names lacking brand kudos (mainly because they're not expensive....) whilst some of the revered names specialising in high end exotica can release over priced tat which is lauded. It's a funny old world.

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Brand image is a funny old thing and some companies have been masterful in manipulating image and perception to their advantage. Other suffer from a terrible image despite making some excellent products. I'm sure we all have other hobbies, one of mine is being a part time audio enthusiast and I love listening to music. Quite often some superb equipment is produced by names lacking brand kudos (mainly because they're not expensive....) whilst some of the revered names specialising in high end exotica can release over priced tat which is lauded. It's a funny old world.

 

More than a little off-topic.

 

It's the Sekt and Cava v Champagne and Prosecco dilemma.  Quality over image.

 

Long may it continue - some real bargains to be had from Spain and Germany.

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Already is..

 

Huawei, ZTE but a few in the IT and Telco industry are established global brands.

When it comes to switches, they have ousted Cisco in certain parts of the world.

 

Although my current Huawei phone is brilliant (I daresay the Chinese government are very disappointed in how boring my life is, however), the couple of ZTEs I've had in the past have been utter rubbish. Probably more due to their being cheap rather than anything inherent in their Chinese origins.

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Past Performance means nothing, to the future that counts.

but it means they have the basic skill, which is higher than no skill.

 

Past performance is, surely, what you build on? I can't imagine that assembling model locomotives with complex modern electronics and hundreds of parts can be learned overnight. (CJL)

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