China virus and production woes.

[red_death]

Of course, the original question did mix up mass manufacturers like clothing manufacturers and model railways so I'd tried to make it clear I wasn't targeting anyone in particular. I did also make the point is that model railways is a niche market and our expectations have come way out of line with what is possible for a number of reasons not just the availability of cheap overseas production. Perhaps I wasn't clear enough: Non-sustainable manufacturing has become the norm in most industries.
Eventually costs will have to go up in China. What then, move on to the next unsustainable place or use that as an opportunity to change things and bring manufacturing back?

Revolution is a pretty new to the market so I understand you are competing for hobby budget £'s against companies that have already outsourced so it's a very difficult market. Now the interesting question is then: would you still produce overseas if competitors manufactured here too?
The skills must already be here (perhaps latent) as you say you've been able to cost it.

Of course people will tell you they want everything cheaply if you ask them but model railways were not on Maslow's hierarchy of needs last time I checked.

I don't think you are being naïve, I just think that you are misattributing some reasons that production has moved. What you call unsustainable I would describe as the norm for an increasingly globalised society ie that production moves to what might start off as a cheap location but as you say it relatively quickly leads to increased wages for workers and ultimately higher prices.  We've seen that across the board that as capital flows into a country that the workers not unreasonably want higher wages, better living conditions etc all of which ultimately put up prices.  In localised markets we've seen some of those flows settle down but in others they have gone on to chase the cheaper workforce (model companies are no different - we've already seen India and Vietnam being used by some of the large companies). There's sometimes a fine line between globalisation and worker exploitation but we shouldn't pretend that everything is negative.

Maslow is a bit of a straw man - no one is claiming that model trains are necessary items, the exact opposite as most people recognise that they are luxury, discretionary items!

In terms of Revolution, we produce where there is the expertise at a price that we think the market will bear where we have good contacts.  We trust our suppliers even if sometimes it would be easier/quicker if they were closer to home.  The reality is that until Chinese wages come near to UK wages then it isn't even realistic to manufacture in the UK. Even then will the skills still be available or affordable.  The last time I saw a quote for a small piece of tooling in the UK it was several multiples higher than China and the irony was that it was ultimately being made in China (CAD in the UK, tooling in China and then QC in the UK) - I could have tooled a whole wagon and more for the price of the "UK" tooling.

[acko22]

Hi All,

So yet another question been asked about moving production to the UK due to the current virus and it's effect on production. As @red_death has pointed out there is the cost point aspects which make UK production unsuitable.

This virus is just another factor of the endless factors that could prevent any product arriving into the UK not just model trains, do we push for UK production because the Container ship carrying lets say the next batch of Farish models in an ISO sinks in the Indian Ocean? Or the factory producing a Revolution Trains model burns down?

If we produced back in the UK are we immune to people getting viruses and maybe having to go as far as China to prevent a potential pandemic, or can guarantee that there won't be a crash involving the transport taking models from factories to the shops or indeed a factory catching fire? I honestly suggest there isn't a chance of that, it's a reality of life these things can and do happen may it be in the UK or China.

The reality is unless you can guarantee that you can take any and every risk of life out these issues will still happen and well China currently has the skills and the best price point to produce not just model trains but many other goods!

[NScaleNotes]

Of course, the original question did mix up mass manufacturers like clothing manufacturers and model railways so I'd tried to make it clear I wasn't targeting anyone in particular. I did also make the point is that model railways is a niche market and our expectations have come way out of line with what is possible for a number of reasons not just the availability of cheap overseas production. Perhaps I wasn't clear enough: Non-sustainable manufacturing has become the norm in most industries.
Eventually costs will have to go up in China. What then, move on to the next unsustainable place or use that as an opportunity to change things and bring manufacturing back?

Revolution is a pretty new to the market so I understand you are competing for hobby budget £'s against companies that have already outsourced so it's a very difficult market. Now the interesting question is then: would you still produce overseas if competitors manufactured here too?
The skills must already be here (perhaps latent) as you say you've been able to cost it.

Of course people will tell you they want everything cheaply if you ask them but model railways were not on Maslow's hierarchy of needs last time I checked.

I don't think you are being naïve, I just think that you are misattributing some reasons that production has moved. What you call unsustainable I would describe as the norm for an increasingly globalised society ie that production moves to what might start off as a cheap location but as you say it relatively quickly leads to increased wages for workers and ultimately higher prices.  We've seen that across the board that as capital flows into a country that the workers not unreasonably want higher wages, better living conditions etc all of which ultimately put up prices.  In localised markets we've seen some of those flows settle down but in others they have gone on to chase the cheaper workforce (model companies are no different - we've already seen India and Vietnam being used by some of the large companies). There's sometimes a fine line between globalisation and worker exploitation but we shouldn't pretend that everything is negative.

Maslow is a bit of a straw man - no one is claiming that model trains are necessary items, the exact opposite as most people recognise that they are luxury, discretionary items!

In terms of Revolution, we produce where there is the expertise at a price that we think the market will bear where we have good contacts.  We trust our suppliers even if sometimes it would be easier/quicker if they were closer to home.  The reality is that until Chinese wages come near to UK wages then it isn't even realistic to manufacture in the UK. Even then will the skills still be available or affordable.  The last time I saw a quote for a small piece of tooling in the UK it was several multiples higher than China and the irony was that it was ultimately being made in China (CAD in the UK, tooling in China and then QC in the UK) - I could have tooled a whole wagon and more for the price of the "UK" tooling.

That's for taking the time to respond.

I still think it's a real shame the World has got like this and just feel sometimes people need to be reminded it doesn't need to be like this: globalisation is just another 'ism or set of rules that could be stopped or changed if we really wanted it to be but we'd all need to temper our wants and desires to allow that to happen. That goes for consumers, governments and business owners.
I still maintain there was definitely greed involved in the initial opening-up of China as a cheap labour source and you've only got to scratch the surface to see things aren't great for many, many factory workers in China and other cheap manufacturing hotspots in other parts of the World. However I do understand where you are coming from and that any new manufacturing endeavour probably has little choice but to go there now for production to remain competitive. I suppose I remain hopeful that manufacturers might at the very least consider ways to bring work back to their home markets where possible and that consumers will be willing to consider paying more for that.
It's a very complex issue that has come about over many decades of incremental changes, like I said way back in the thread, in our current system it's going to take equally as long for it to be changed again unless something very sudden and very drastic happens and this virus isn't it.

While I still don't agree with everything you are saying I do appreciate you being willing to discuss this potentially thorny issue and it's interesting to get to see things from a manufacturers point of view.

[trkilliman]

Some really interesting viewpoints on my original post, which I'm enjoying reading.

I still think that some production will slowly creep back to the U.K.  It may be that some emerging cottage industry type ventures eventually expand and offer employment to U.K. people as the Matchbox factory did, but on a smaller scale.
I understand Peco employ local people who carry out the nimble fingered bits of assembly. It would be interesting to know what prompted them to keep production in the U.K.

Wages in the pockets of U.K. workers means they have money to spend here, which can only be good for our economy, locally and Nationally. Anyway, only time will tell.

[woodbury22uk]

The owner of Little Loco Company attributes part of the woes of the company to trying to bring production back to the UK  and finding that his tooling sub-contractors had gone to China to get the tooling undertaken. The tooling is current not available to LLC.

Post on 13 January here:- https://www.rmweb.co.uk/community/index.php?/topic/145214-llc-update-from-steve/page/4/#comments

[Railwaygun]

ISTR that Cginese workers are getting annual pay rises, to slowly bring them up to European levels. whether this applies to vietnam etc...

[NScaleNotes]

ISTR that Cginese workers are getting annual pay rises, to slowly bring them up to European levels. whether this applies to vietnam etc...

Maybe but they've got a long way to go yet...
Minimum wage in Shanghai (the region with the highest minimum) is currently about £270 a month. Lowest is £190!

The current minimum for most regions does appear to equate to about a 150% increase in the last 10 years though so that's what manufactures are crying about.
However just like here it's quite difficult to live on the minimum wage in China and that's assuming you're a full-time employee.

Interesting reading: https://clb.org.hk/content/employment-and-wages

[red_death]

Minimum wage in Shanghai (the region with the highest minimum) is currently about £270 a month. Lowest is £190!

That in a nutshell is why model railway manufacturers aren't going to move back to the UK in the foreseeable future. £270/month is less than 20% of our minimum wage and given that a reasonable proportion of model costs are in assembly you can very easily see that even comparing minimum wages makes it very difficult to produce in the UK (and I would argue that assembling and decorating our trains is much more skilled than minimum wage work).

The sometime-posted riposte to that is that prices could be lowered by requiring less detail to be assembled and to a degree that is true, but the million dollar question is to what degree can detail be left off or simplified?

Cheers Mike

[njee20]

ISTR that Cginese workers are getting annual pay rises, to slowly bring them up to European levels. whether this applies to vietnam etc...

I'm not sure the aspiration was to ever bring them to European levels, merely to markedly increase them, which is what's happening. As Mike's said, to bring them to European levels would actually cause a huge disparity among those surrounding countries!

A lot of bike production moved away from Taiwan when it became more expensive, going to Cambodia and Vietnam, who were cheap, and frankly not quite as good. A lot of higher end products continued to be made in the US, but again, the Taiwanese usually did a better job, purely a perception thing that "the US must be better".

I still think it's a real shame the World has got like this and just feel sometimes people need to be reminded it doesn't need to be like this: globalisation is just another 'ism or set of rules that could be stopped or changed if we really wanted it to be but we'd all need to temper our wants and desires to allow that to happen.

But why? With the possible exception (and I don't say that flippantly) of reducing climate change, what would be better if we were totally relient on an area of 50 square miles around where we live? Why is globalisation a bad thing, or a shame? I can't understand why regressing 300 years would be beneficial.

[Paddy]

Maybe but they've got a long way to go yet...
Minimum wage in Shanghai (the region with the highest minimum) is currently about £270 a month. Lowest is £190!

The current minimum for most regions does appear to equate to about a 150% increase in the last 10 years though so that's what manufactures are crying about.
However just like here it's quite difficult to live on the minimum wage in China and that's assuming you're a full-time employee.

Interesting reading: https://clb.org.hk/content/employment-and-wages

Hi @NScaleNotes

Blimey, I had no idea their wages were that low (and that is after many years of rises?).  I suppose it all depends on the cost of living but even so...

May be these low wages are a contributing factor to the poor quality meat that was on sales in the markets?

It must be very tough for them and puts our "toy trains" in to perspective.

Many thanks

Paddy

[Paddy]

The sometime-posted riposte to that is that prices could be lowered by requiring less detail to be assembled and to a degree that is true, but the million dollar question is to what degree can detail be left off or simplified?

Cheers Mike

Hi  Mike ( @red_death )

It is indeed the million dollar question and I am not sure there is one answer.  Some people are more than happy with models from Union Mills whereas others want everything to be mm perfect.  I am not criticising either approach but they do seem a distance apart.

Having recently been repainting RTR items to form bespoke trains, it has made me realise the following:

1. It is fun to create something unique of your own i.e. the "modelling" in model railways.

2. The older rolling stock models are much easier to disassemble and repaint.

3. A lot of the detail on our latest RTR items (which is exquisite) I cannot see once the model is on the layout.

In the case of point 3, it almost makes me think that if I want this level of detail then I should really move to OO.

Kind regards

Paddy

[NScaleNotes]

But why? With the possible exception (and I don't say that flippantly) of reducing climate change, what would be better if we were totally relient on an area of 50 square miles around where we live? Why is globalisation a bad thing, or a shame? I can't understand why regressing 300 years would be beneficial.

I'm sorry but it's nonsense to say we need to regress 300 years. What we need is a further evolution in economics and global trade.

Manufacturing is the foundation of the economic system we currently have. We work to produce/sell goods. Work earns us money which we use to buy goods/services. Profits are taxed, taxes are re-invested; profits are re-invested in production or supposedly (LOL) shared with workers. Circular. Moving manufacturing abroad has been one step in gutting the economy because it has caused a big break in that circular flow. Allowing profits to flow freely around the World to avoid tax is another way the circular flow has been broken.
Now there seems to be a great deal of debate about whether moving manufacturing abroad saved manufacturers money or whether some only stayed in business because of it. Anyway, some (perhaps not all) have definitely pocketed a difference between wages here and wages in China and will continue to do so. Yes, you can argue some of these lost jobs have been made up by services but a visit to many former manufacturing areas will reveal many areas still haven't recovered and never will. That's not just here but in the US and other parts of Europe.

Globalisation in itself isn't necessarily bad but it depends what you mean by globalisation. If it's everyone trading goods and services for a fair price (and hopefully ideas) with controls on the flows of money to prevent tax avoidance then fair enough but that isn't what happens now.

Another issue with globalisation in it's current form is that it facilitates international monopolies and oligopolies. Yes, we might get some slight benefit in lower prices but monopolies/oligopolies don't tend to favour workers or consumers. You could still have a global economy with trade of raw material at fair prices which would go a long way to raising living standards around the World. You then have national and/or regional manufacturing and service industries run as worker co-ops, another way to raise living standards. Finally you need controls on financial services and the flows of money to prevent manufacturers and service providers dodging taxes in the markets they work-in, which would be the final way to raise living standards.

I don't see anything wrong with being reliant on an area of 10, 20, 50 even 100 square miles around us for the majority of our goods and services, the shorter supply chains are the more resilient they are likely to be. Yes, some raw materials and goods will always have to be imported but if we are paying fair price for them that shouldn't be a problem. With modern technology like the Internet is we could still have a free flow of ideas and have the best of both Worlds.

[Snowwolflair]

The sometime-posted riposte to that is that prices could be lowered by requiring less detail to be assembled and to a degree that is true, but the million dollar question is to what degree can detail be left off or simplified?

Cheers Mike

Hi  Mike ( @red_death )

It is indeed the million dollar question and I am not sure there is one answer.  Some people are more than happy with models from Union Mills whereas others want everything to be mm perfect.  I am not criticising either approach but they do seem a distance apart.

Having recently been repainting RTR items to form bespoke trains, it has made me realise the following:

1. It is fun to create something unique of your own i.e. the "modelling" in model railways.

2. The older rolling stock models are much easier to disassemble and repaint.

3. A lot of the detail on our latest RTR items (which is exquisite) I cannot see once the model is on the layout.

In the case of point 3, it almost makes me think that if I want this level of detail then I should really move to OO.

Kind regards

Paddy

As a tangent to this discussion the transformation of UK N gauge was when good quality injection moulded loco bodies reached the market. 

The difference between a die-cast body (Union Mills and early Farish) and an injection moulded bodywork is immeasurably better.  Minitrix and Arnold amongst others led the way and now it is almost standard.  Ironically the body moulding was not the problem it was the need for weight that delayed its use for locos.   FUD and Resin 3D printing is fast catching up with injection moulding.

[njee20]

But why? With the possible exception (and I don't say that flippantly) of reducing climate change, what would be better if we were totally relient on an area of 50 square miles around where we live? Why is globalisation a bad thing, or a shame? I can't understand why regressing 300 years would be beneficial.

I'm sorry but it's nonsense to say we need to regress 300 years. What we need is a further evolution in economics and global trade.

Seems like a lot of halcyon views in your post. Yes, no doubt some people did profit from moving labour abroad, but so did we, as consumers. It's not like there were no profits in days of UK manufacturing, or people taking enormous bonuses, so it seems a bit moot. It's not a new phenomenon, it's been happening for decades. Yes, ok, maybe 'globalisation' has meant people can more easily hide wealth, but it's naive to assume that somehow 'localism' or wahtever you want to call it would suddenly mean everyone would abide by the letter of the law and invest only in local co-operatives. Unless you want a communist economy there will always be a disparity in wealth.

As you identify you'd always need to move raw materials around the world to produce goods, so yes, unless you fancy regressing 300 years I'm pretty certain we'll never be entirely reliant on our immediate locality again.

[red_death]

I think that Nick raises an important point, one of the by-products of moving to Chinese production has been a massive increase in quality. Would that have happened without the shift? I'm not sure but there is little evidence that it would have done.