Model prices and costs of bringing manufacturing back to the UK?

[rogerzilla]

I know standards have improved generally, but I remember UK-made Hornby kit being absolute trash, and expensive trash at that.  Unreliable, bare plastic instead of paint, and nameplates printed on paper.

[Nova Scotian]

2 hours ago, Jol Wilkinson said:

 

A stronger economy if we had a more production-based economy with less imports. But that would rely on other industries joining in.

 

 

1 hour ago, Andy Hayter said:

 

Speaking of the generality rather than the specifics of model railways, we, the western world, have for decades now outsourced manufacturing to cheaper to produce countries and regions.  The move eastwards has ended up with massive quantities of manufacturing in China.  China - a country with very different societal beliefs and who would aim to spread their beliefs to a much wider audience.

 

So returning to model railways, on-shoring would be as critical to the Chinese economy as a flea sneezing on the back of an elephant.  We do however have to start somewhere.  Our economic reliance of China and continued good relations is IMHO too exposed.  

One of the great myths is around trade balance - particularly focused on goods. The UK can not support itself, it must import - and by importing where local production is not competitive it frees up capital for spending on other goods and services.

Services and the knowledge industries are core to the UK - and ignoring the services in Brexit has cost the country dear. Instead of sneering at financial services, recognizing the massive GDP impact from that industry and ensuring it continues to be strong in the UK is far more important to the economy than the marginal gains that were "attempted" by brexit and similar industrial policy.

The US, Europe and their allies are clearly now trying to mitigate the impact of supply chains from China - we're seeing massive reshoring efforts. This recognizes the impact of COVID, of China's growing muscle around the world, and disruptions that could be caused around Taiwan...

 

But trying to reshore model railway making is.... pointless.... in the scheme of things. Semi-conductors, critical minerals, battery manufacturing - things that our industries depend on, rather than are discretionary. Our core industries can not be held hostage by the interests of another. Check out what the US is doing in this regard. Far more important we have secured semi-conductor supply chains than model trains. And factories pumping out those semi-conductors are far less focused on manual assembly, and far more capital intensive - and thus more suited for reshoring.

[Wheatley]

1 hour ago, rogerzilla said:

I know standards have improved generally, but I remember UK-made Hornby kit being absolute trash, and expensive trash at that.  Unreliable, bare plastic instead of paint, and nameplates printed on paper.

Hardly trash. It was comparable with other items in the toy market of which it was part (Scalextric, Corgi, Dinky, Action Man etc), Margate era Hornby was never aimed at collectors. It was reliable enough and on the odd occasion it went wrong there was a service agent in nearly every town of any size, assuming the shop you bought it from couldn't fix it.

 

Collectors were buying Wrenn, the switch to collecting Hornby didn't happen until Chinese production raised the game and brought adult collectors into the game, along with Lima ending the 'Any colour deisel you like as long as it's blue or green' status quo. 

Edited October 16, 2022 by Wheatley

[pete_mcfarlane]

4 hours ago, Wheatley said:

.., along with Lima ending the 'Any colour deisel you like as long as it's blue or green' status quo. 

In Lima's case, any colour diesel you want but it won't be very well applied. There's not a straight line in sight on my old Lima class 156 in Provincial livery.....

[rogerzilla]

14 hours ago, Wheatley said:

Hardly trash. It was comparable with other items in the toy market of which it was part (Scalextric, Corgi, Dinky, Action Man etc), Margate era Hornby was never aimed at collectors. It was reliable enough and on the odd occasion it went wrong there was a service agent in nearly every town of any size, assuming the shop you bought it from couldn't fix it.

 

Collectors were buying Wrenn, the switch to collecting Hornby didn't happen until Chinese production raised the game and brought adult collectors into the game, along with Lima ending the 'Any colour deisel you like as long as it's blue or green' status quo. 

Not quite: you could have a Desert Sand Western with the wrong running number!

[jjb1970]

We are seeing a global decoupling, I think we will also see the demise of the dollar as the worlds de-facto reserve currency. The part I find interesting is that this great decoupling is generally presented as a great benefit to the mature developed economies when it strikes me as much more nuanced. China is already a vast market for products and services, India is rapidly becoming one, the ASEAN member States represent a vast market, Africa is developing etc. I get the impression that many see in shoring as a one-way street without considering that it is actually very much a two-way street. 

[CKPR]

Surely the bottom line is that we clearly  have enough r-t-r model railway stuff to keep the hobby going for decades ? One of my interests is the M&CR in the 1970s and ALL my 4mm rolling stock has been bought S/H or as kits from UK cottage industry businesses. My tuppenceworth is that we will see a shift towards renovation (a la The Repair Shop), coupled with small scale  local remanufacture of parts, rather than consumerism as the main driver of the hobby [puts on tin hat and retreats to bunker to await incoming...]

Edited October 17, 2022 by CKPR

[Grovenor]

And while we debate this issue, the captains of industry are doing this.

https://www.bbc.co.uk/news/uk-england-oxfordshire-63269974

[Nova Scotian]

1 minute ago, Grovenor said:

And while we debate this issue, the captains of industry are doing this.

https://www.bbc.co.uk/news/uk-england-oxfordshire-63269974

You go where the supply chain is if you have a heavy component that's a large portion of the value of the product... UK needs to ramp up battery manufacturing. 

[Wheatley]

Read some of the  trade mags for the full story - making petrol and electric Minis on the same production line at Cowley is inefficient (quelle surprise) so Mini production (of a different model) restarts in 2025 once the Chinese have sorted the gremlins out. 

 

https://europe.autonews.com/automakers/bmw-shift-uk-production-electric-mini-china

[298]

4 hours ago, CKPR said:

Surely the bottom line is that we clearly  have enough r-t-r model railway stuff to keep the hobby going for decades ? 

 

Looking at my current projects, all I really need is a supply of wheels, drive components and track. But that doesn't stop me lusting after easy ways to complete abandoned teenage dreams, such as the purchase of a Heljan 1361 because I messed up kitbuilding one and the Bachmann Talyllyn/Skarloey range for pretty much the same reasons.

 

[maico]

I don't know what percentage of their production is in Germany but Tillig Modellbahn GmbH continues to recruit. Currently wanted:

1)Process mechanic for plastic injection molding machinery.

2)Painting and stenciling of components and assemblies and operation of pad printing machines in paint shop.

3) CAD model construction TT120/Ho

 

Serial production in Europe, of at least some models, is clearly possible as HAG in Switzerland, Roco-Fleischmann, and Marklin-Trix and some smaller specialists demonstrate...

 

Edited October 19, 2022 by maico

[Bernard Lamb]

2 hours ago, maico said:

I don't know what percentage of their production is in Germany but Tillig Modellbahn GmbH continues to recruit. Currently wanted:

1)Process mechanic for plastic injection molding machinery.

2)Painting and stenciling of components and assemblies and operation of pad printing machines in paint shop.

3) CAD model construction TT120/Ho

 

Serial production in Europe, of at least some models, is clearly possible as HAG in Switzerland, Roco-Fleischmann, and Marklin-Trix and some smaller specialists demonstrate...

 

But that is about the situation for a company in the EU.

Just in case you were asleep the Uk is no longer in the EU.

A vastly different set of circumstances.

Bernard

[maico]

1 hour ago, Bernard Lamb said:

But that is about the situation for a company in the EU.

Just in case you were asleep the Uk is no longer in the EU.

A vastly different set of circumstances.

Bernard

 

Wage costs are generally higher in Germany.

 

Edited October 19, 2022 by maico

[Andy Hayter]

Not as much as you might think

 

From 1.1.22 the German minimum wage was €9.82 - around £8.35 - compared with the UK minimum wage  of £8.91 -so actually lower than the UK.  

 

On 5.4.22 the UK minimum wage went up to £9.50 so widening the gap.

 

On 1.7.22 the German minimum wage was increased to €10.45 - around £8.88

 

And on 1.10.22 the German minimum wage increased again to €12.00 - £10.20.  So only now higher than the UK.

 

What I can concede is that the German cost of living is lower than the UK - at least it was and I have no reason to suppose that has changed. 

 

Of course if we are looking at jobs commanding wages above the minimum then comparisons become more difficult.

 

For ease I have used an exchange rate of €1 = £0.85 throughout.

 

 

 

[Nova Scotian]

There's a difference between a company that maintained a level of domestic production and has reinvested in the machinery and equipment to continue some production - and the situation for UK companies manufacturing/order complex models where the entire thing has been offshored and outsourced. It is much harder to bring back, because of supply chains, the level of capital investment, the skills required in the workforce etc, than it is to maintain production. 

 

There's a great video someone's shared before of Marklin manufacturing - imagine now trying to do something like that starting from scratch and the challenge you'd have.

[Andy Hayter]

You are right, but equally I think you are wrong.

 

You are right that if a company thought to bring everything back in-house it would cost a fortune;  but if a UK company starting from zero did decide to bring manufacture back to the UK, they would most likely, I suggest, simply use the China model but located in the UK.

 

In other words they would not invest in a factory, extrusion and moulding machines, warehousing etc.  They would simply go to a trade moulder and negotiate a price for the job.   The trade moulders already have the infrastructure so the investment would be in moulds - assuming that existing ones cannot be repatriated. 

 

What I don't think trade moulders have is staff with the skill-set to do the assembly or a mechanism to do it at economic cost.

[Nova Scotian]

I think this is the video previously shared by someone else

 

 

[newbryford]

On 16/10/2022 at 00:32, Dave John said:

So, the future...... 

 

 

Since ever more robots will demand ever more models with almost infinite livery variations the market becomes self sustaining, until all humans are gone and the earth is swamped in a vast morass  of super detailed model railways run by robots who just love model railways........... 

 

 

 

 

Sounds like a more preferable option to Skynet and Terminators......

[eldomtom2]

It is worth remembering that there are other low-wage countries besides China, and I strongly suspect that in the coming years they will continue to benefit at China's expense.

 

I could also make comments about how the idea that China has a comparative advantage to Western countries is in many ways a myth, but that is getting into political territory.

[Andy Hayter]

The problem with finding a location is that you have a number of criteria that really have to be met before you can consider opening an operation there.

 

1.  Political stability.  It may not be a regime that you necessarily sign on to (although in the future as people become more and more aware of things they see as "not right" that could change) but it needs to provide stability in terms of economic direction; unlikely hood of community breakdown, riots etc.; stable currency and so on.  [ Reviewing this I can already see why the UK is not a favourite just now.  😼]

 

2.  A workforce with a reasonable level of education.

 

3.  A stable workforce who once trained will remain and not just move on to better things.  [ China does fall down a bit here with Chinese New Year and the impacts that has on the workforce - a number not returning after the holiday break.  So nowhere is perfect.]

 

4.  Stable power supplies to keep machines running - and other services as well.

 

5.  Good logistics from your chosen town to a deep water port.  That port should have regular shipping routes to Europe - preferably direct but transhipment would not be a major hinderance.  

 

6.  Not likely to be subject to regular natural disasters - weather, tsunami, earthquake etc..

 

And so on.

 

You quickly end up eliminating very large parts of the world.

[jjb1970]

Something about China is they are already now making the same transition away from manufacturing to services as their economy develops, wealth has increased etc. Clearly they're still a manufacturing powerhouse but they are now developing their service sector and prioritizing higher value manufacturing in recognition that a lot of the lower value manufacturing has been looking for cheaper alternatives for quite a while now.

The other big consideration is perceived security and independence. Model trains are frankly irrelevant in this context, but we can see that secure access to energy, semi-conductors, food, certain categories of goods is now a political hot potato. That itself, however, is also very much a two-way street, just as Western countries are trying to bring certain industries to their own countries and sanctioning China to retard their home development so China is pumping money into domestic capability development for the same reason. I see a lot of people on aviation boards sneering at, for example, the COMAC C919 airliner without considering that whether it is as efficient and cheap to operate as an A320NEO or 737MAX isn't really the issue for China. If it works and allows them to move away from dependence on Europe and the USA for civil aviation it is working. In that context the increasing decoupling and difficulties incorporating Western systems and engines will be a huge inconvenience and added cost but will only accelerate the development of domestic alternatives.

To be honest I worry about the future as I think the world is becoming a more dangerous place by the day.

[eldomtom2]

On 20/10/2022 at 23:53, Andy Hayter said:

You quickly end up eliminating very large parts of the world.

But nor do you eliminate everywhere except China...

[Andy Hayter]

42 minutes ago, eldomtom2 said:

But nor do you eliminate everywhere except China...

 

Indeed you don't; but it does help explain why 100 or so model railway brands are still using China for at least part of their production.

[billbedford]

1 hour ago, eldomtom2 said:

But nor do you eliminate everywhere except China...

...until they start asking for payments in yuan.