Model Railroading > How did Kadee & Micro Trains Do It in America???

I was going to post this in the thread on the passing of Dale Edwards of Kadee and Micro-Trains fame, but thought better of it and decided to start a new thread:

This brings to mind the fact that Kadee and Micro Trains Line items were and are designed and produced in the USA. I mean I KNEW this, but I guess I forgot about it, in the sea of talk about things being made in a China. How is it that these companies are able to do this when virtually every other major or significant model railroad manufacturer insists that they CANNOT manufacture in America and still turn a profit? Perhaps it is the limited number of items requiring painting or other procedures that the EPA might stick their noses in. Having never been a manufacturer, I don't know. Is this simply a bottom line thing and do the current owners of Kadee and MTL simply accept much less in the way of profits than owners of companies who produce in China? Or, are they simply the only domestic makers who are willing to put up with the absolute trainload of SxxT that federal, state & local government agencies heap upon them, not to mention employee lawsuits, things like $20.00 minimum wage legislation, union organizing, etc. If you are or were someone who was the owner of a manufacturing company, I'd like to hear your thoughts on just how Kadee and MTL can do it here, in the USA, and nobody else seemingly can. The brothers Edwards were, indeed, so instrumental in improving our hobby. May their names and accomplishments always be remembered.

Makes me want to go out and buy some more Kadee products!

They did it with two superior products. One was a limited edition high quality model (freight cars) which were highly sought after. The other is a superior product which has the highest quality that even China tries to emulate but cannot achieve equality (the coupler). No one can compete with the coupler for reliability and it is or was a monopoly until the patent ran out. They can continue this longevity through their quality because, no matter what gets copied in China, none are as good as the Kadee.

Rick

First off, I understand that both had superior machining and production business experience. The Kadee Coupler was such a great product (genius) with great sales, that I'm sure it provided plenty of working capital to fund other lines like the N Scale Micro Scale line with the best technology available. When their products were introduced, the two had a jump on the "China Syndrome" as it was yet on the horizon. Now it's a dog eat dog world, because if your competitor is outsourcing to China, in most cases you are also forced to do the same. I seem to recall reading that each brother managed his own product line (at least in later years). Another thing that we can credit them for is continually adding new products, particularly adaptations of the coupler to fill almost any product need. That just makes good business sense. I believe Model Railroader had an article on Kadee about the time the first brother passed away. The couplers were essentially sold as kits, so their wasn't much time spend in detailing and painting a model though the N scale cars are great with collectors paying the price.

One reason for their success is that they established a quality product and patented it long before foreign outsourcing became an issue. Their domestically-produced, patent-protected products were so superior to other couplers and became so well established that even when outsourcing and the expiration of their patents took place they were able to maintain market share. And it's not as if they were operating a factory employing thousands of people.......

Been a Kadee customer for 50 years and I don't anticipate ever going to any of the other manufacturers.

Art House
Gettysburg, Pa.

rschonfelder Wrote:
-------------------------------------------------------
> They did it with two superior products. One was a
> limited edition high quality model (freight cars)
> which were highly sought after. The other is a
> superior product which has the highest quality
> that even China tries to emulate but cannot
> achieve equality (the coupler). No one can
> compete with the coupler for reliability and it is
> or was a monopoly until the patent ran out. They
> can continue this longevity through their quality
> because, no matter what gets copied in China, none
> are as good as the Kadee.
>
> Rick

I deal personaly with them in White City Oregon, very nice people there and if called you have the same type answer the phone and questions. Asked Sam about problems with another automatic coupler produced by San Juan for narrow gauge got a very direct answer from him. Don't know what to tell you got a couple of pairs when they came out and couldn't make them auto uncouple either. The answer from SJ was gee was before we took over the company and most cut off the part that hangs down as they cant get them to work either. Had they been produced by Kadee they would have worked is my take on things or they wouldn't have sold them. That's why they do so good.

Attention,, Walthers, Athearn, et al, all of the others that sell non USA couplers, I do not like your crap and I do not buy very much, if at all, due to the coupler issue!

wag216
(William A. Gibson Jr, a modeler for over 65 years)

This is actually a neat little lesson in small business management.

I am fairly certain that their priorities put quality way ahead of price.

Much of the "China Outsourcing" is the race to the bottom of prices both in the hobby and in the general consumer market.

With a unique, high quality, high demand product they could price to their costs and the market would pay (I do).

With their quality emphasis they could keep local and personal control over the design and production process.
With their reported personality styles they used old fashioned leadership (as much by example and anything) instead of "modern management" with its endless fascination about measuring costs, production, and trends through endless data streams.

They worked in a very livable place and could draw on the local population who appreciate the lifestyle and build a good career with Kadee instead of having to leave town for work in a big city. Employees do good work for good leaders.

And not being a publicly traded company they were free to save cash and invest in the future rather than maximize each quarter's dividend and share price.

Great conversation folks... one thing that's also true... the journey hasn't always been smooth...

As a kid coming into the world of horn-hook replacements, I bit into the Kadee program. The hallmark MK 5 had just been replaced by the MKD 5&10 which as far as I can see has been the same product for more than 40 years. There were MKD 4's that were a bear to assemble, and 6's, 7's and 8's with odd draft gear pockets that at least for me never worked as well as the 5&10's. But reflecting on all the comments about a small business's relentless focus on quality and customer service, these products ultimately evolved into the products most of us use religiously today.

But I miss the Rail Spiker. And I'm disappointed that the wheelsets I spent so much money on 25 years ago aren't very good with DCC today. But I can adapt...

Rich

I work for a medical device manufacturing company that basically does all work in-house. Products are designed, injection molds built, parts molded or machined, assembled, tested, and sterilized here in Orange County, California. We have our own print shop, rubber plant, extrusion lines, and even design and build our own automated assembly machines, all in-house.

We make top quality products and sell them for about 1/2 of what our competitors charge, who make theirs in places where English is not the primary language. That, and our clever designs (pat on back to self!) has caused us to become #1 in the world in our main area of focus.

Yes, the company is privately held, and money does get reinvested. Management is extremely sharp and proactive. A real sense of pride, quality, innovation, and almost total vertical integration have made this happen.

It could be we support Kadee by buying their products and complaining about their cost. I can't remember a post where anyone complained about the cost of Kadee couplers.

It's kind of interesting--people are mentioning kadee's superior quality product and a "race to the bottom" with "cheap imports from China" but nobody mentions Rapido--who makes no bones about making CLEARLY superior products in China...Just wondering why the double standard? I support North American made products whenever I can--but if you can build something as impressive as that GMD1 I have in my basement, no matter where it was made, I'd purchase it. And Jason's been probably the most open and forthright manufacturer on his blog explaining not just the "why china" but the "why NOT here."

I differ on the quality of the Rapido "MacDonald Cartier" coupler. I sure respect the Rapido quality over all but the coupler is not superior in my opinion. Trying to couple up my passenger cars: couple-miss, try again, couple-miss; once again, couple-miss. Switch to Kadee #148 ... couple (first time). It is embarrassing to say how many of their cars I have but suffice it to say my experience is not limited to a 1 or 2 car collection.

However, I would never "not buy" a model because of their couplers as I have come to accept the change over from the days of old when we used to throw away the horn hooks.

Don't get me started on Athearn's McHenry crap. Try running a long train with grades and curves and you'll soon find out why the leaf delrin spring is a disaster. I know this from the guy ahead of me (at running sessions) with his 60 car train which consistently breaks but who refuses to believe our policy of Kadee only.

If you want to know what the cost difference for a Manufacturer is for putting on a #158, the superior Kadee coupler, it is approximately $1.00 per car. I know of an Australian manufacturer who uses #158 for their car (wagons) and a bag of 8,000 couplers equates to $1.00 per pair additional to their manufacture cost. The problem is for a manufacturer who goes to China (USA based or otherwise) is the large cash outflow to buy the Kadee's and the hassles sending a USA product into a Chinese manufacturing line - even harder when a third country is involved trying to get them there as we have to add in import costs of freight and clearance twice.

With this in mind, one can see why manufacturers use Chinese clones. add to this, recently, Kadee has had problems getting the trip pins right. One can go back here in TO for the negative discussion over Exactrail's new D&RGW hopper derailing. This was, in my findings, the trip pin. I know the Australian company I've alluded to has had customer complaints over the trip pin height which Sam apparently awknwledged in writing to them (a change in the die). Most people adjust trip pins themselves - I know I've done it since I was spending my paperboy money on Kadee. However, we are now talking of a different generation who likely grew up being driven to school so heaven help them to have to adjust a trip pin.

Rick

Good point Rick. <G>

rschonfelder Wrote:
However, we > are now talking of a different generation who
> likely grew up being driven to school so heaven
> help them to have to adjust a trip pin.
>
> Rick

rschonfelder Wrote:

> However, we
> are now talking of a different generation who
> likely grew up being driven to school so heaven
> help them to have to adjust a trip pin.
>
> Rick

Well, if my observations are correct, the "being driven to school" generation has virtually ZERO interest in model railroading. As horrible as the thought is, I could see them roasting marshmallows over burning piles of H.O. equipment before I could see even one of them changing out a Kadee coupler. Sometimes I really wonder what will become of all our trains when our generation has all passed. Probably end up in land fills. Model railroading in 25 years will be about as popular as making your own clothes is today. Sorry, didn't mean to open another can of worms.

Well, probably true Steamliner, but I can tell you that I've been doing book signings since January and at some of those events young fellows in the six to eight year age group often show their enthusiasm for trains. And often its because of grandpa! (I sold one book to such a young man and I told him to tell grandpa that the book was not grandpa's but his!) <G>

And in November I've been asked to give a couple of presentations at a elementary school where the railroad in my book ran through. And since they've seen my book, and I've promised to bring some model trains, the teachers have told me that kids are thrilled. Thomas the Tank Engine has helped our cause! And though I have had no influence on a great nephew, I'm told he's loves trains (won't share them with me). And then there are my neighbor's grandkids. I have had no influence there either, but I did fill her in about the local train rides around Christmas as the kids were looking for something like that. Perhaps this blight will skip a generation?

A few years ago, a fellow church member, his son, the pastor and his son were over to see the progress on my layout. And often when I see Chris's son in church, he asks if I've been doing some more work on the layout. They'll be over again for sure.

Victor A. Baird
http://www.erstwhilepublications.com



Edited 3 time(s). Last edit at 09/24/14 20:08 by wabash2800.

Accurail is another company that does it all in the USA. And they do kits!

Stable company in the same location many years, low overhead as building(s) may be paid off, stable employees that are happy to have a stable employer, low cost area resulting in lower wages compared to a major city, a state that doesn't discourage employment with high taxes, worker's comp laws, etc., owners that are satisfied with a modest profit margin..... Just some thoughts.

Kudos to Kadee and Accurail, and all the others that do top-notch work. We live in global world whether we like it or not, and so it's more and more impressive when a company can keep it in the USA and make that work. Others have provided some good points here.

And, I think we need to be open to the discussion of how we keep young people interested in the hobby. It's a topic that all of us can help with - kids are changing, again whether we like it or not, and digital entertainment gets easier and more lifelike every day. The biggest thing we can do is to expose them to why model building, and operation, interests us. If you've got a layout or a display model, show it off! What we do is pretty neat, especially if the scenery is coming along. Throw in working signals or accessories, and most kids at least are entertained for a while.

One idea that came across my lap was to auction off 'layout tours' at a charity or church auction. It's for a good cause,and most people bidding on the tour have little kids that will buzz with the idea. You never know who you will inspire. I'll be doing that on my Onondaga Cutoff again this coming spring.

I'm only 37 myself, but there's several guys younger than 25 that are regular operators on my layout - they're out there, we just need to work to engage them on a level where they notice us.

~RGDave
www.onondagacutoff.blogspot.com

The only coupler beneath Kadee i accept is the Atlas with their longitudinal slot.

The Kadee is made in USA for a price 1,00 $. This is really not expensive.

And the models? Build a Freight in the factory needs minutes. The labor costs is a very little part of the end price.

I think that it is a management problem. Modern managers are all from the same drawer and they are fixed to labor in USA is to expensive and labor in China is cheap. But no one is able to calculate exact.

Erwin from Austria