Update on Rail Exclusive 33's

[david12345]

I got an email a few weeks ago as an answer to the same question and the reply was they don't know. They are still working away on them though.

[Mike Storey]

If anyone is still following this thread.....!!!

 

I had a very prompt and courteous reply from Jamie, the General Manager at RE, today, saying they should have some concrete news about progress on their Class 33's in the next few weeks i.e. before the end of October. That will, I would guess, depend on someone in China pulling their finger out. He is pretty certain that the product will be produced as they have already poured so much time and money into it, but it must be a nerve-wracking time for small businesses depending on the vagaries of such an increasingly unreliable supply chain. Despite the continuing, albeit narrowing, production costs advantage in using China, surely it won't be long before production returns to Europe, especially if 3D technology progresses into commercial viability at scales larger than N-gauge.

 

Regards to all

[Torr Giffard LSWR 1951-71]

Phil will deliver and it'll be well worth waiting for.

 

Hopefully before I need a monocle in both eyes!

 

Dave

[Pedro32]

There is an update on the Rail Exclusive website for those who are interested.

 

http://www.railexclusive.com/index.php?category=147

 

It explains the long delay in new information, and I hope that the project is restarted soon.

 

I'm prepared to wait and see the finished product whoever makes it! 

 

Regards

[angell328]

Just got my email from them, explains the reasons why they couldn't give any updates or say what was going on behind the scenes.

Sorry to hear they had all this hassle for nought, but at least they are sticking with it and looking at new avenues and new manufacturers.

 

Looking forward to see what the future brings!

 

Matt

[brittannia]

And what is a good gesture of a discount for those who pre-ordered the 33s when it finally arrives

[Torr Giffard LSWR 1951-71]

....maybe it should be Heljan compensating customers who have been kept waiting....the responsibility for the delay is theirs.

 

Dave

[Perchpole]

....maybe it should be Heljan compensating customers who have been kept waiting....the responsibility for the delay is theirs.

 

Dave

 

Absolutely right.

 

However, perhaps what's more important is that now the legal arguments are over Rail Exclusive can get the project running again.

 

The importance of this episode should not be understated. It has great implications - not just for people planning to buy the 33s, but also for other independent developers and the wider model railway community in general.

[Mike Storey]

Just got my email from them, explains the reasons why they couldn't give any updates or say what was going on behind the scenes.

 

Sorry to hear they had all this hassle for nought, but at least they are sticking with it and looking at new avenues and new manufacturers.

 

Looking forward to see what the future brings!

 

Matt

 

Matt - I placed an order many months ago but have not had the email you have had, despite having exchanged several emails with them in the past. The announcement on their web site does not really explain much. Could you possibly copy the relevant parts to this forum, unless it distinctly states "private", to save many of us chasing them up individually? many thanks

[Mike Storey]

Absolutely right.

 

However, perhaps what's more important is that now the legal arguments are over Rail Exclusive can get the project running again.

 

The importance of this episode should not be understated. It has great implications - not just for people planning to buy the 33s, but also for other independent developers and the wider model railway community in general.

 

Completely agree, with both points. There are severe delays across all UK products and companies, both mainstream and commissions, with the exception (I believe) of Bachmann (Kader) products, unless they have been more realistic with their forward announcements. There does not appear to be a particular problem with products produced in Europe for the continental market (according to the mags I read here in France) although some Jouef, Electrotren and Lima (ie Intnl. Hornby), now largely produced in China, are being announced but not appearing. So it would seem to be entirely a Chinese issue. Apart from Hornby's well documented problems with the closure of their original production supplier, there has been little made public about this clearly wider crisis in UK models. Whilst it is nearly impossible for companies in commercial negotiations to publish anything which could prejudice their position, I am amazed that the model media has stayed so quiet about this issue - surely somebody can explain what is going on without damaging delicate discussions. It is unbelievable that, in a recession, companies are unable to supply to clear demand. There is obviously no problem these days with design capability. So, is there a funding issue, a production capacity or capability issue or a price issue?? Is anyone willing to say, and to point to the medium to long term solution?

[34theletterbetweenB&D]

Growing pains in China. Same thing happened when Japan took off as a mass manufacturing for export base in the 1960s (same panic over 'all our manufacturing has gone forever' too). Initially the new manufacturing grows fast, but inevitably it reaches a point where in some respects it has 'eaten' all the locally readily available resources. This can be any (or even near all) of skilled labour supply, power, water, raw and finished materials prices and availability, transport and residential infrastructure, administrative, legal and regulatory process.

 

Then the 'drag' that hampers rapid growth in developed territory begins to kick in: the data I can recall for Osaka circa 1970 was that among other things it needed to put in modern mains sewerage for 80% of its population. Local tax rises to fund this and many many other projects to produce a fully developed industrial city, and the costs go up, effort is diverted, large areas are disrupted by major civil engineering works etc.

....maybe it should be Heljan compensating customers who have been kept waiting....the responsibility for the delay is theirs.

Got actual proof of that? It's all between the retailer and the manufacturing partner, and until one hears the full story from both sides who knows? Consider that this is hardly the first retailer/manufacturer project to have been significantly delayed and/or transferred to a  alternative manufacturer over the past few years. No business actively seeks to gain a poor reputation, so perhaps a little credit for good intentions, even if the end result wasn't positive...

[frobisher]

....maybe it should be Heljan compensating customers who have been kept waiting....the responsibility for the delay is theirs.

Any assumed contract is between Rail Exclusives and their customers. Any obligations Heljan may or may not have are to Rail Exclusives.

[Perchpole]

Got actual proof of that?

 

Yes.

 

And that's why this episode is so significant.

 

Lots of people are commissioning models from major manufacturers. Retailers, magazines, preservation groups - everyone is doing it. The costs involved can be vast and some will face financial ruin if it goes wrong. Once you sign the contract you are in the lap of the gods - or in this case, the manufacturer. All you can do is wait.

 

And wait...

 

For the first time, however, someone has finally said, "Enough waiting. We want our money back.". They took the manufacturer to court and got every penny back - plus costs.

 

This is a massive moment in the evolution of our hobby. It will surely empower the developers - especially the small ones - and demonstrate to the manufacturers that they cannot simply make their clients wait for ever.

[Bob Reid]

I doubt however any potential buyer would be able to prove that they had actually suffered some tangible loss - hence the reason the prospect of any compensation to "potential" buyers is hardly likely to be forthcoming.  I can't see anyone taking out a class action for loss of expectation.  At the end of the day, the loss lies unfortunately with Rail Exclusives and if what you say is correct then the all of the prospective losses will already have been taken into account.

 

From the opposite viewpoint, it might actually make it more difficult for the developers of these projects, the companies who they use to produce the models may well be very wary of this kind of work in the future when the outcome can often be out of their hands.

[angell328]

Matt - I placed an order many months ago but have not had the email you have had, despite having exchanged several emails with them in the past. The announcement on their web site does not really explain much. Could you possibly copy the relevant parts to this forum, unless it distinctly states "private", to save many of us chasing them up individually? many thanks

 There is nothing on the email that says this is an inconfidance conversation and most points are being aluded too on here so to set some of the rumors to bed here is the email I received explaining what happened from Rail Exclusives side.

 

Class 33 model postponed

 

Dear Matthew

 

I am writing to you personally and directly because you are a loyal customer with a pre-order for the RAIL EXCLUSIVE Class 33 locomotive and I regretfully have to inform you that the production of this model has been postponed. The ‘Cromptons’ evoke vivid childhood memories for me, so I am as eager as you are to get my hands on an upgraded Class 33 model and share your disappointment at this news.

 

The purpose of the rest of this letter is two-fold:

• To give you a clear explanation of the events which have caused the project to be delayed.

• To outline what we are now doing to bring the Class 33 project to successful completion.

 

What happened?

 

RAIL EXCLUSIVE chose Heljan as the manufacturer for our Class 33 for the obvious reason that it already had this locomotive in its range and it was believed that the required upgrade in quality and accuracy could be achieved both quickly and economically. RAIL EXCLUSIVE paid Heljan a substantial sum of money up-front to meet the tooling cost of the improved Class 33. During the following 12 months it became increasingly plain to us that, for whatever reason, Heljan was unable to meet our product specification and delivery date.

 

Attempts were made to resolve the problem but these were unsuccessful and we took the difficult decision to withdraw the project from Heljan in order to find an alternative manufacturer. Heljan disagreed with our position and chose to retain a significant proportion of our tooling money despite no tooling having been made. RAIL EXCLUSIVE was forced to undertake a long and costly legal battle which has only just been settled.

 

RAIL EXCLUSIVE is pleased to inform you that this matter has now been resolved to our complete satisfaction including the full refund of the tooling monies invested, along with all legal fees. Please accept my personal apology that we have not been able to provide more information during the legal action but this process demands complete confidentiality. The good news, at last, is that we are once again able to progress our quest for a top-quality Class 33 using our existing detailed research material and new drawings. Rest assured that this is a project that I am personally committed to.

 

What are the next steps?

 

To this end, we are now in advanced discussions with another well-known European manufacturer about producing this model for us. We will ensure that this company can meet our expectations and produce the product to our exacting specification but we must inform you this will not be an overnight process.

 

In the intervening period we have continued to expand our range of ViTrains Class 47 ‘special editions’ and have successfully diversified into digital command control products as distributor for the highly-respected ZIMO range.

 

Because so many people have committed to pre-ordering our Class 33, and there is likely to be further delay before we can offer you a ‘Crompton’ model to the standard that we all wish for, it is only fair to suspend the ordering process until we have more definite news. Of course, no payment has ever been taken for Class 33 models you have on order already and any outstanding cheques will be destroyed.

 

When the project is fully revitalised we will contact you again. As a thank you, for your patience and perseverance during this difficult time, all original customers will be offered a beneficial discount (that will not be available to new purchasers) on any future Class 33 model.

 

Yours sincerely

 

Philip Sutton

Director

 

 

Hope this help explain a few things for you all.

 

Matt

[frobisher]

Seems fairly clear cut to me. Rail Exclusives have (potentially - not knowing outcome of legal action) taken a serious hit on this, haven't taken any customers' money yet (correct?) and are offering discount rates to existing orders when the new model becomes available. You can't fault that as a response to what was a bloody awkward situation for them. Heljan probably over stretched themselves with the various commissions they've had on the go and this is what gave (speculation).<br /><br />And I suspect when Rail Exclusives reveal which manufacturer they're going with, there will be much comment and debate (regardless of who they are). I think the interesting answer would be Vi Trains, but Bachmann going in there would open up other interesting possibilities given how they've structured deals in the past.

[Mike Storey]

 There is nothing on the email that says this is an inconfidance conversation and most points are being aluded too on here so to set some of the rumors to bed here is the email I received explaining what happened from Rail Exclusives side.

 

Class 33 model postponed

 

 

Dear Matthew

 

I am writing to you personally and directly because you are a loyal customer with a pre-order for the RAIL EXCLUSIVE Class 33 locomotive and I regretfully have to inform you that the production of this model has been postponed. The ‘Cromptons’ evoke vivid childhood memories for me, so I am as eager as you are to get my hands on an upgraded Class 33 model and share your disappointment at this news.

 

The purpose of the rest of this letter is two-fold:

• To give you a clear explanation of the events which have caused the project to be delayed.

• To outline what we are now doing to bring the Class 33 project to successful completion.

 

What happened?

 

RAIL EXCLUSIVE chose Heljan as the manufacturer for our Class 33 for the obvious reason that it already had this locomotive in its range and it was believed that the required upgrade in quality and accuracy could be achieved both quickly and economically. RAIL EXCLUSIVE paid Heljan a substantial sum of money up-front to meet the tooling cost of the improved Class 33. During the following 12 months it became increasingly plain to us that, for whatever reason, Heljan was unable to meet our product specification and delivery date.

 

Attempts were made to resolve the problem but these were unsuccessful and we took the difficult decision to withdraw the project from Heljan in order to find an alternative manufacturer. Heljan disagreed with our position and chose to retain a significant proportion of our tooling money despite no tooling having been made. RAIL EXCLUSIVE was forced to undertake a long and costly legal battle which has only just been settled.

 

RAIL EXCLUSIVE is pleased to inform you that this matter has now been resolved to our complete satisfaction including the full refund of the tooling monies invested, along with all legal fees. Please accept my personal apology that we have not been able to provide more information during the legal action but this process demands complete confidentiality. The good news, at last, is that we are once again able to progress our quest for a top-quality Class 33 using our existing detailed research material and new drawings. Rest assured that this is a project that I am personally committed to.

 

What are the next steps?

 

To this end, we are now in advanced discussions with another well-known European manufacturer about producing this model for us. We will ensure that this company can meet our expectations and produce the product to our exacting specification but we must inform you this will not be an overnight process.

 

In the intervening period we have continued to expand our range of ViTrains Class 47 ‘special editions’ and have successfully diversified into digital command control products as distributor for the highly-respected ZIMO range.

 

Because so many people have committed to pre-ordering our Class 33, and there is likely to be further delay before we can offer you a ‘Crompton’ model to the standard that we all wish for, it is only fair to suspend the ordering process until we have more definite news. Of course, no payment has ever been taken for Class 33 models you have on order already and any outstanding cheques will be destroyed.

 

When the project is fully revitalised we will contact you again. As a thank you, for your patience and perseverance during this difficult time, all original customers will be offered a beneficial discount (that will not be available to new purchasers) on any future Class 33 model.

 

Yours sincerely

 

Philip Sutton

Director

 

 

Hope this help explain a few things for you all.

 

Matt

 

Many thanks Matt

 

The interesting bit is "European manufacturer" which suggests Vi-Trains, or possibly Fleischmann, LG or a few others. Although not of contractual interest to RE, I would earnestly hope that Heljan reveal whether their problem has been internal (as suggested by others) or with their Chinese production partners - the latter would seem more likely to me, given the problems faced by Hornby and independents using commissions through the majors.

 

It also seems that, for those of us that have not received this email, we need to get in touch with RE to confirm our original order status, to ensure we have not been forgotten whenever this project gets going again!

 

Thanks again

 

Mike

[Mike Storey]

Growing pains in China. Same thing happened when Japan took off as a mass manufacturing for export base in the 1960s (same panic over 'all our manufacturing has gone forever' too). Initially the new manufacturing grows fast, but inevitably it reaches a point where in some respects it has 'eaten' all the locally readily available resources. This can be any (or even near all) of skilled labour supply, power, water, raw and finished materials prices and availability, transport and residential infrastructure, administrative, legal and regulatory process.

 

Then the 'drag' that hampers rapid growth in developed territory begins to kick in: the data I can recall for Osaka circa 1970 was that among other things it needed to put in modern mains sewerage for 80% of its population. Local tax rises to fund this and many many other projects to produce a fully developed industrial city, and the costs go up, effort is diverted, large areas are disrupted by major civil engineering works etc.

Got actual proof of that? It's all between the retailer and the manufacturing partner, and until one hears the full story from both sides who knows? Consider that this is hardly the first retailer/manufacturer project to have been significantly delayed and/or transferred to a  alternative manufacturer over the past few years. No business actively seeks to gain a poor reputation, so perhaps a little credit for good intentions, even if the end result wasn't positive...

 

You draw an interesting parallel, but it is only partially applicable. The manufacturing capacity in China for this sort of high definition injection moulding process in the model world, actually decreased, with the closure of Kader's main competitor last year (or 2011?) due to bankruptcy. Japanese funding mechanisms of the 1960's to 1980's would not have allowed this to happen, and many apparently dead donkeys were nursed through into better times. China has not hit the step-change ceiling that happened in Japan, but has lowered the ceiling. It has many other problems that can dent its expansion (the latest to emerge being an acute water shortage), but potential output capability is not amongst them. In a free market, given rising demand, a new competitor would have emerged to absorb the growth and generate new growth. The state-backed private capitalism and public cronyism of contemporary Chinese industry, reminiscent of certain past (present?) European and current South American economics, begets its own rules. Yet another reason to get out of our dependency on them.

[34theletterbetweenB&D]

Trust me, I share your doubts about the massive investment in what is not remotely a democratic state with a libertarian civil society. I personally steered well clear of any personal business exposure, from experience with it from inside a major Corp. But Big Capital and major governments play by a very different set of 'rules'.

 

...For the first time, however, someone has finally said, "Enough waiting. We want our money back.". They took the manufacturer to court and got every penny back - plus costs.

This is a massive moment in the evolution of our hobby. It will surely empower the developers - especially the small ones - and demonstrate to the manufacturers that they cannot simply make their clients wait for ever.

It may have the result you foresee as desireable. But the law of unforseen consequences being what it is, it may just serve to make manufacturing vendors wary of potentially litigious developers, however justifiable their claim may be. After all, they have the capability to develop new models independently. The developer remains dependent on a manufacturing partner, which is under no obligation to accept the offered business.

[Perchpole]

I would earnestly hope that Heljan reveal whether their problem has been internal (as suggested by others) or with their Chinese production partners

 

As far as I'm aware, this issue had absolutely nothing to do with China.

['CHARD]

Hornby Railroad anyone?

[Guest maxthemapman]

it is, it may just serve to make manufacturing vendors wary of potentially litigious developers

It should force manufacturers to be more explicit as to expected timeframes of the various project phases, a good thing for everyone including the manufacturers. If a prototype exists, plus good drawings, the timeframe should be reasonably predictable and it should be possible to agree a fair timetable with all parties. Where prototype or drawings or both are unavailable, the timetable expands accordingly, as does the uncertainty, and that can be built into the contract. Likewise, if manufacturing slots are variable and difficult to pin down.

 

This would certainly prevent a future situation in which a hypothetical manufacturer offers advantageous terms, hoovers up more business than it can cope with, and just sits on everything, leading to a debilitating financial hiatus for the people who spent the money. Model manufacturers have been known to go bankrupt, and the situation that no one wants is a future nightmare scenario in which the over-ambitious hypothetical manufacturer goes bust and takes out a big chunk of the British retail sector with it.

[Mike Storey]

As far as I'm aware, this issue had absolutely nothing to do with China.

 

I would not disagree that you are probably right in strict contractual terms in this instance. But I also suspect it is part of a wider problem in the monopolisation of manufacturing in this specialist area, based largely upon the competitive labour pricing still available in China despite all its emerging capability problems ....ad infinitum, drum-banging, etc etc. Calling Heljan the villain here is like saying Poland started WW2. We need to understand or accept that they are/were probably trying to build a significant order book to have some clout in the Chinese manufacturing hiatus, in order to resist the dominance of others. It has clearly not worked.

 

Will our hobby be the better for it? Yes, if RE and others shift to truly European (or at least not Chinese) based manufacturers. No, if it puts our developers, or indeed competitors to the Big 2, at greater risk. Short-term, clearly RE and thus us, have lost out in respect of having the model they could profit from and we could have now. I guess we, as customers, need to decide whether we are prepared to pay a greater premium for our desires, to ensure long term viability of supply via alternative sources, or just hang on in there to save £20 and hope someone, somewhere gives a sh1t.....

[DJM Dave]

As this is the Heljan thread, it would be very interesting I think, to hear their point if view on this matter.

 

I think there are always 2 sides to a story and invite them to expound here.

['CHARD]

I have this morning received the following statement from Denmark:

 

"Vi er træt af dig britiske modeludviklere ønsker alt går, for lavere priser, vi har besluttet at købe en tropisk ø med Crompton værktøjer penge, og vi har flyttet dertil med Brianna Banks at tælle sine nitter."