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W. D. L. D. W.?

3.7K views 26 replies 17 participants last post by  c.midland  
#1 ·
What Did Lionel Do Wrong? In 1966?

Joe Algozzini and Roger Carp's article in the latest Classic Toy Trains, on Lionel's train sets for 1966 (below) is, frankly, depressing. Going into 1966, Lionel had made money the year before, after having lost money the previous four years. The company went all out on what it thought was the formula for success, a big color catalog, and lots of different, really cool train sets, including many with two boxcars each, a new feature.

But as Joe and Roger tell the story, Lionel lost $1.6 million that year (a lot back then) and its owners shut it down shortly thereafter.

I wonder what people here on the forum think was the reason Lionel did so poorly? The article talks about how Lionel had cut what back on the number of "uncataloged sets" it made in 1966. (It had routinely made more than 100 different special sets as promotions for retailers and businesses in previous years). Apparently the company decided the cost of making all those custom sets was not worth the profit, if any, that they made it (I tend to agree).

But what went wrong? My own thoughts, offered for what they may be worth, are that they still have way to many sets, including too many glamorous, "top end" sets. Maybe they had cut back on uncataloged sets, but they still have many, many cataloged sets - maybe too many? So many I think they competed against one another.

And in addition, I think maybe Lionel suffered from having too many "top end" locos rather than one over-arching halo product. In recent years when Lionel has managed to dominate the market's attention, it has done so by having one - and just one - awesome product that steals attention from everyone else, and all its other locos, too. The Vision Hudson, the Vision Big Boy, seemed to literally take all the oxygen out of the room for everyone else. In '66, I don't think Lionel created that type of excitement: every product tried to be the greatest!

Anyway, interesting article, even if the end of the story is depressing.
 
#3 ·
Maybe that is the problem. I am a bit younger than you, but in 1966, I had lost interest in things like model DDXs and diesel engines, and found a new love in things like GTXs and 426 hemis!
Toy trains sort of became not cool any more. Was that all it was? Stuff happens.
 
#5 ·
I graduated from high school in 1965, during the high school years, girls and hot cars were the priority, certainly not trains. 1966 I got the greetings letter from President Johnson wanting me to join his tour of SE Asia so electric train were history for a couple more years.

I am sure girls, cars, and the draft hurt Lionel sales during the late sixties.

Bill
 
#11 · (Edited)
By the mid sixties HO sized slot cars were very popular.

Aurora sold over 25 million slot cars in 1965!

Slot car racing layouts were a fun alternative to train layouts.

Paul



View attachment 231977
Totally agree with this!

I think Lionel was doomed as a kids toy by mid/late 60's no matter what they did. As somebody once said "the times they are a changin'....." and times just changed on them.
When I was a jr high kid kid in the mid 70's, trains were not "cool" to me, slot cars were definitely more popular, along with .049 gas powered cars and airplanes.

Back in the hobby a few years now, and quickly found a huge difference in the quality and detail between the 50's stuff and the 60's trains, and have no interest in anything after 1959.
 
#8 ·
High school senior, Girl, boat, trains put away in boxes.

My younger brothers were never interested in trains. Not sure why. In those years trains were a past event and future dream for me.

As I remember it, HO was the big deal in trains at that time. That had to be a tough adjustment.
 
#9 ·
I think it's all of the above, but societal changes and the coming of age of the 50's kids most of all.

For sure, Lionel exec's weren't making the best decisions, especially in light of market changes and 60's kids' play preferences, e.g., slot cars, etc.

So, no interest from the new kids on the block, and the older kids were moving on or were already gone. In short, Lionel's market dried up, but in retrospect it was revived in a surprisingly short time. Once those older kids got back from military service or started families of their own, the Holiday memories kicked in and we were off and running again. Says a lot about how ingrained trains have become in our society and in us as individuals.
 
#12 ·
This time-period is particularly near and dear to my heart, because I LIVED IT as a kid.

My first Lionel train set came from that 1966 catalog. It was an O-27 set, because that's what my parents could afford back in those days.

I can vividly recall my Dad often taking me to work on Saturdays, and we'd have lunch together and then visit Tiny Tots, a huge hobby/crafts/general toy store in Greenbook, NJ on Route 22. I believe the store closed many years ago.

At first, Lionel's presence in their train department was HUGE. I can still remember paging through that 1966 catalog at the store counter with my Dad. And the clerk highlighted some of the items they had in stock. One was the Virginian FM diesel loco that was listed for $65 in the catalog, and the store was selling it for $52. I remember that like it was yesterday. (Unfortunately, even $52 was a lot of money in 1966.)

That 1966 catalog also contained HO train sets as well as 1/32-scale and HO-scale slot-car sets. Lionel had also dabbled with the Porter chemistry sets and telescopes in the catalog too. So it wasn't quite the Lionel catalog like those we see today that are exclusively O-Gauge trains.

I can honestly say that repeat visits to Tiny Tots over the next couple of years saw a noticeably "thinner" selection of O-Gauge trains in general. Eventually, even the HO-scale display layout was dismantled. So the writing was on the wall.

By 1969, the Lionel catalog had shrunk to a mere 8 pages -- most of which were left-over O-27 train sets from prior years. Full O-Gauge rolling stock and track was relegated to the back cover of the catalog.

Meanwhile, the hobby shop / toy store in my local hometown of Bernardsville, NJ had largely migrated its inventory of "hobby toys" to HO slot-cars, which became very popular in the late-1960's. They had a huge 8-lane oval racetrack where kids (mostly boys) could have races. Saturday mornings became quite the scene there as guys would bring their small carrying cases with different HO cars that they had "souped up" for serious racing events. So the social element of those hobby years was set around slot-cars.

By the time the 1970's rolled around, high school and interest in girls took priority over trains and slot-cars. And it wasn't until the mid-1980's that I really got back into Lionel O-Gauge trains.

In general, I just think hobby/toy companies are ALWAYS competing for limited mind-share among young kids (and adults too). And the late-1960's just turned out to be the waning years for O-Gauge trains -- whether it be due to other hobby distractions, girls, guys growing up and going off to school, or whatever. Not sure I can put a finger on anything in particular that "Lionel did wrong".

Today, it's once again quite a different world for O-Gauge enthusiasts -- one that we could never have predicted.

David
 
#13 ·
IMHO- The only thing keeping Model trains alive today is guys like the majority of us, born in the 30s,40s,50s, and 60's, coming back to trains after we discovered them young and then eventually left them behind.
I may be mistaken, but I find it hard to imagine many kids born in the past 30 years discovering model trains down the road, after growing up on "Call to Duty" FPS games and Madden football.

I hope I am wrong.
 
#14 ·
I'm in agreement with everything that's been posted in this thread. Lionel has made some major blunders and back then had reached it's pinnacle in the mid-1950s. After Sputnik and Lionel's attempt to mate the space age with model trains, it began its downward turn.

I have a "Trains Unlimited" episode from the late 1990s on model trains that detailed this quite well. Problem is, it's on a VHS tape which I haven't yet converted to digital.

I don't subscribe to CTT, so haven't read the article. But it seems that 1966 was when Lionel's last Santa Fe Super Chief set with the aluminum, red-striped passenger cars was made. But I recall a very stripped-down Santa Fe F3, with no front grab irons, filled in portals where the circular windows used to be, and BLACK trucks! The ugliest Santa Fe silver warbonnet F3 I had ever seen. I couldn't believe Lionel had done this to their once beautiful and classic icon which had served it so well.

I would guess that lack of capital for more R & D, and subsequently just dying out in the market place helped bring Lionel down by the late 1960s. And yes, things were certainly changing. Again, 3-rail O scale trains are dying today, and postwar Lionel is really dying.

I remember an issue of Smithsonian magazine from the mid-1980s, 1986 I think, where model trains were on the cover, with the featured article inside about the resurgence model trains had made, mostly 3-rail O scale Lionel. But again, this was because of the renewed interest from baby-boomer men from middle-age on, who could now afford to build their own model train layouts and purchase the required motive power and rolling stock.

But now that we're aging and passing on, it's seriously doubtful that Lionel will enjoy the kind of future the past has brought it. There still may be a limited market for high-end command stuff. But nothing like before.
 
#17 ·
...

But now that we're aging and passing on, it's seriously doubtful that Lionel will enjoy the kind of future the past has brought it. There still may be a limited market for high-end command stuff. But nothing like before.
Gotta believe there's lots of truth to this thinking. We're literally approaching the point where nearly every purchase is a MAJOR purchase costing in excess of $1,000... and this at a time when folks already have enough trains to keep their great-grandchildren happy (assuming those kids even catch the train bug, which they probably won't.)

Just last month alone... Atlas-O Gunderson Maxi-IV well cars and containers arrived in the States. Generally speaking, one car with two containers will set you back $150, but you buy the cars in sets of three. So if you load them up with containers, that's about $450 per 3-pack. Buy 2 sets? That's an easy $900. Want 4 sets (to make a reasonably nice 12-car intermodal train)? You're just shy of $2K.

And this month, we have Lionel's GS-4's hitting our shores. Another $1400+ unless you're waiting for a sale that may take it down to $1200 or so. Still a good chunk of money for something we paid $900 just a couple of years ago.

And how many folks can "afford" to have another $5K tied up in pre-orders?

We all enjoy the hobby differently, so the prices are what they are. I just wonder how long the importers can sustain a healthy business model like this. For now, they've side-stepped the high risk and placed that solely on their dealer/distributor network. But that can only work in the short-term. Eventually everybody feels the pinch.

Despite all of this, I don't see another 1969 around the corner yet. But something's gotta give sooner or later.

David
 
#18 ·
Back in the hobby a few years now, and quickly found a huge difference in the quality and detail between the 50's stuff and the 60's trains, and have no interest in anything after 1959.
How True. 1959 or earlier is the only thing I consider as well. Anything else is not worth the time or dollars.
 
#19 ·
So here's an interesting twist on this theme... How many enthusiasts have "re-discovered" Standard Gauge tinplate? This was WAY before my time as a kid, but I've been drawn to it's toy-like charm in recent years. And now with the smoke and sounds of PS3, it's a step up from the Standard Gauge of yesterday -- although some will argue (rightly so) that modern-day electronics could be a maintenance issue for the next generation of owners.

Anybody else dabbling in MTH's licensed LCT Standard Gauge tinplate in the last 10 years? And if so, are you running them? Or just displaying them? I have no interest whatsoever in the collector's game that's playing out in original pre-war circles. My interest is purely in MTH's recent LCT and Tinplate Traditions line of Standard Gauge. Brand new... the stuff is absolutely beautiful... and a stark contrast to the scale-like realism most folks are headed towards in O-Gauge trains.

David
 
#20 ·
It sure is tempted. As you say, the toy-like charm of it is almos irresistable. But so far I have resisted, mostly because I have no place for a layout or to keep the trains. But they look and sound dandy! Very cool stuff.
 
G
#21 ·
I don't know that Lionel did anything wrong in 1966. I think the market changed and Lionel wasn't able to catch up quick enough, if it was even possible in 1966-69. Lionel sold toys and the toy train market was drying up, having been replaced by other, more relevant (to the kids of the late '60s) toys. Lionel didn't market model trains as much as toys and wasn't able to adapt to a hobbyist market. Model railroading was 2 rail, mostly HO, and Lionel couldn't compete. They needed to wait for us baby boomers to grow up and take up model railroading but with our 3 rail trains rather than 2 rail.

As the toy train market was shrinking Lionel made cheaper and cheaper trains to try to turn a profit, but it damaged their reputation for making high quality trains.

I wonder if Lionel had started marketing more strenuously to adult collectors and model railroaders in the '50s if they would have survived to the revival in the '80s, or if they were doomed by market forces beyond their control.
 
#24 ·
Speaking of HO slot-car racing... does anybody here remember the magazine, Car Model Magazine, that featured the super nice Scottsboro Raceway? I recall an entire publication "HO Model Car Racing: How to Build the Scottsboro Raceway" in 1967 that showed soup to nuts, how to build this beauty of an HO raceway that was essentially two 5x9 ping-pong tables set up end-to-end lengthwise. Here are a couple of pics to jog your memory. ;)

https://www.flickr.com/photos/go_tbirds/8628307629

and here's one in color...

http://s238.photobucket.com/user/Dominick327/media/ScottsboroRaceway.jpg.html


I never thought I'd see a resurgence of that hobby. But about 7 or 8 years ago I recall walking into a local hobby crafts store, Herbs in Doylestown, PA (now closed). And they had 1/32-scale slot-car racing sets again. It was like walking back into the 1960's all over again. Eventually, from what I understand, HO sets and track have become available again too. So if anybody had the burning desire to relive their HO race car youth again, the Aurora AFX track system is now widely available again. Who'd have thunk??? :)

The 1966 Lionel catalog we've been talking about here actually had Standard Gauge 1/32-scale AND HO Gauge raceway sets in it: 6 pages for slot-car racing vs. the 20 or so pages devoted to O-Gauge Trains.

David
 
#25 ·
ive always had a love for trains. since my first set my dad bought me at 4 and a set every year at Christmas i was hooked. he used to take me to all the local train shows. when i was 13 a received a huge inheritance of postwar trains from my great grandfather. in my later teen years i picked up an electric guitar and well you know girls the band and life made me forget about trains. when i was about 18 i picked it back up full swing. i started building my current layout. now at 23 still in love the mrs has accepted my obsession as she has her own hobbies(stained glass). we're in contract with a house right now that needs alot of work so sad to say i may have to put it off for a while while we start the beginning of our lives.
 
#27 ·
WW2 is probably the main factor. The men that came back from it wanted something that reminded them of a more innocent time, the trains of their childhood. They purchased trains for their boys in the early postwar period. Those boys grew up in the muscle car-era. Mustangs, Camaros, Chevelles, Chargers, Challengers, etc., hence the slot-car connection.

Lionel had made a lot of money with toy trains for a long time. It was hard to let go. Even today, there are companies living in the past, even though the past comes much faster now. They won't survive. Even Williams finally added sound, because they think the market demands it. The prices went up, and people complain. Lionel and MTH have gone to all remote control and plastic roadbed track. Will that save their market? Probably not. Both of them are now looking into different markets, Nascar and European trains. It's not a bad thing, just companies trying to stay in business.