Sunday, August 4, 2013

Backshoring: Hornby Moving Model Train Manufacturing Back to UK

Assembling locomotives in China for Rapido Trains.

Here's a new word: Backshoring.

Backshoring is the opposite of off-shoring, as in bringing home manufacturing that had been sent to places like China.

CNN International reports that Hornby, a British manufacturer of model planes and trains that once sent its manufacturing to Asia, is bringing production back to the UK.

It is starting with its Airfix model plane line, which will soon be once again made in the UK.

"It's a very British brand with huge heritage . . . once upon a time it was all manufactured here in the UK," says Roger Canham, Hornby chief executive. "Airfix actually went to India, but the marketplace is changing now."

Hornby's reversal is the latest in the trend of "backshoring" that has seen British businesses such as Topshop, Symington's, Caldeira, and DFS, all repatriating some manufacturing from China in the face of rising labor costs overseas.

Hornby isn't the only model railroad manufacturer to backshore production. A couple of years ago Marklin decided to bring LGB production back to Hungary and Germany from China.

A couple of observations:

First, rising wages in China and other Asian countries is a good thing. Nobody should have to work for slave wages, even if the salaries are better than what people could make at home on the farm. 

It's a good thing even if it means we have to pay more for the various goods we have come to depend on here in North America--the lowest price isn't always best, especially for the people who make stuff for us. 

(Plus, people who make more money in the developing world might be able to buy more stuff from us.)

Second, should we expect more model railroad manufacturers to backshore their production? Not necessarily, or at least not soon. 

A large company like Hornby might be able to afford it, but smaller manufacturers will find it more challenging, especially those who add more detail parts.

Last year Jason Shron of Rapido Trains tackled this topic. He noted that it took 7.5 hours to make one HO scale Budd "Park" Series dome-observation car. Labour costs in China for that car in 2012 were $12.90. 

That same car, made in North America, would cost $127.50 (at $17 an hour). Add in the other costs (tooling, overhead and profit) and that car would cost between $400-$500 retail in a hobby shop. How many of us would buy one? (VIA Rail is selling them for $100 each.)

Says Shron: "I would love to bring production back to North America, and if 3D printing continues to advance to the point where it better resembles a replicator on Star Trek: The Next Generation, then we can certainly bring production back here. 

"It will happen--I am sure of it--just probably not for a long time.

"For now, it is simply too expensive to produce a ready-to-run model of Rapido complexity and quality in North America, much as we would want to."

1 comment:

  1. Hornby is only manufacturing their Airfix "Quick-build" kits in Britain.

    They have no announced plans to move model train manufacture back to the UK.

    The "Quick-build" kits are not their traditional plastic kits but are very similar to specialized LEGO bricks.