Micro-Trains "likely" ending the SW1500

u18b Dec 30, 2016

  1. randgust

    randgust TrainBoard Member

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    The real issue here is not unlike the automotive industry where 'he who controls the tooling controls production'. It's an interesting paradigm that in order to reduce delivered part cost, the producer agrees to underwrite tooling cost with it, as long as they control the tooling or do so for a fixed period. Sometimes the agreement has the customer owning the tooling, sometimes the manufacturer does. As a manufacturer, that's the ultimate grip; if you own or physically hold hostage the tooling you customer either puts up or shuts up, if you own it and control it you can shop around for a manufacturer or bring it in-house.

    The low(er) cost of tooling developed in China as part of the ultimate deliverable has really hurt some, and this is not just trains. They're not stupid, but the vertical rise in production cost is a shift that hasn't been entirely anticipated; increase yes, but the rate is phenomenal.

    In the automotive business, as a part supplier competing with worldwide sources, this can turn into hand-to-hand combat if a customer suddenly walks in the door and either demands tooling on the spot, or conducts an 'inspection' of tooling that mysteriously includes documenting the production line you are using.
     
  2. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    Under Mao, yes. It was the same old, same old peasants versus capitalists rhetoric. Since then, they have edged away from Maoism. "Reform" has made them much more socialist, but not all of the Maoists have gone away.
     

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