Marx vs. Lionel

In the 1950s, Marx and Lionel took turns being the biggest toy company in the world, largely riding on the popularity of O gauge trains. Neither company particularly liked the other, but both owed some degree of their success to being compatible with one another. Because of their interoperability, the two makes of trains are frequently compared and contrasted even today.

Focus

Marx was diversified–they made trains, but because they were a popular toy. Two enduring, iconic toys that are still on the market today, the red and yellow Big Wheel and the game Rock’em Sock’em Robots, were developed by Marx in the late 1960s.

Lionel started out as an electric novelties company, but it was the electric train that proved to be its big seller. Lionel tried to diversify over the years, experimenting with toy cars and toy boats in the 1930s and slot cars and construction sets in the 1950s and 1960s, but was never as diversified as Marx.

The result was that when electric trains declined in popularity, it hit Lionel harder than it hit Marx. Marx just simplified the sets and lowered prices; Lionel faded out and ended up selling out to General Mills in 1969. Marx remained independent until 1972. Not many people realize this, but Marx outlived its two postwar competitors.

Quality

Both companies made quality products. Marx’s quality was a bit more consistent; its cheapest trains run just as reliably as its most expensive ones and they even use a lot of the same parts.

Lionel’s cheapest sets were headed up by throwaway locomotives; with a few exceptions, you couldn’t just clean up a Scout locomotive, replace the brushes, and get another decade out of it. They worked well until they wore out, but once they wore out, you didn’t have a lot of options. On the other hand, Lionel’s high-end products ran like Swiss watches. Lionel’s middle-road products weren’t as intricate or as smooth running as the high-end trains, but they were extremely reliable.

With the exception of the Lionel Scouts, it’s not hard to work on either Lionel or Marx trains and keep them running, although the Marx trains tend to be a bit simpler to get apart and the Marx motor is easier to work on. If you want to learn to fix old trains, it’s not a bad idea to learn on Marx and then tackle Lionel.

Price then

In the 1952 Sears Christmas catalog, Lionel sets ranged in price from $22.50 for a basic set to $62.50 for a set headed up by one of their high-end locomotives that ran like a Swiss watch. Marx electric sets ranged from $4.98 to $24.89. The $24.45 Marx steam set wasn’t as good as the $62.50 Lionel steam set, but it stacked up well against a $39.98 Lionel set in the same catalog. Lionel gave you a bigger transformer but Marx gave you one more car and four more sections of track.

Lionel had a diesel set priced at $57.50. Marx had a diesel set priced at $24.89. Marx gave you one fewer freight cars but they threw in a set of passenger cars.

Before you get too excited about the prices, after you adjust for inflation, the Lionel prices ranged from $203-$564 in 2015 dollars. The Marx prices ranged from $44.95 to $220.59. So the Marx trains weren’t as cheap as they sound today, while Lionel was definitely a premium-priced brand.

The cheapest Marx set had no Lionel equivalent. It was very similar to sets Marx had been making since the 1930s. Lionel made comparable outfits only very briefly, during the height of the Depression. One way Marx kept its prices down was by keeping trains in production as long as was practical. That brings up another difference between the two: Marx made windup and battery-powered trains right up to 1974. Lionel only made windups during the Depression.

Price now

Generally speaking, Lionel trains are still worth more than Marx trains, but that’s an oversimplificaton. The sets that Marx sold in 1952 through Sears for around $25 are worth more today than their equivalent Lionel sets, for example.

If you’re like me and you like tin lithographed trains, 1950s Marx tin litho is still cheap today. The common engines from the old Marx $5 sets are worth about $10-$35 today, and most of the cars from those sets are worth around $10 today as well.

If diecast and plastic are more your thing, common Marx engines in those categories range in value from $20 to $100.

Lionel prices are all over the map. Gondolas and cabooses are worth about $5, and the cheap Scout locomotives are worth $15-$20. But prices for 6464 boxcars start at around $25 and can go up to hundreds of dollars, and Lionel’s Berkshire locomotives can sell for hundreds as well. You don’t want a $15 Lionel locomotive–a $15 Marx runs much better and you can actually fix it–but there are plenty of postwar Lionel locomotives out there that are worth $75-$200.

If you want something that looks like a vintage Lionel on a tight budget, get a Marx locomotive, a Lionel tender, and an assortment of Lionel freight cars–6014 boxcars, gondolas, and cabooses are all rather affordable. Few people will know the difference and it will run forever.

Scale

Lionel’s cheapest trains were roughly 1:64 scale. Its pricier trains were closer to 1:55 scale. Marx’s cheapest trains featured train cars that were six inches long, with no particular scale. They also had a line of trains that were 1:64 scale, and in the mid 1950s they introduced some trains that were closer to 1:60 scale to compete with Lionel’s pricer trains.

“Proper” O scale is 1:48; neither company produced much that was anywhere near 1:48 scale in the postwar era.

HO scale

Lionel’s attempts to enter the HO scale market were generally not successful. Marx, on the other hand, had a very successful HO scale line, and after Marx’s demise, Model Power acquired the Marx molds and still uses them to produce inexpensive HO scale sets.

Made in the USA

Lionel trains were made in Irvington, New Jersey. Irvington is a New Jersey suburb of New York City. Marx trains were made in Girard, Pennsylvania. Girard is north of Pittsburgh, off Lake Erie. Marx undoubtedly had less overhead making its trains in Girard.

Lionel’s successor company experimented with manufacturing in Mexico in the 1980s but wasn’t happy with the results. Offshore production in Asia started in the 1990s. Lionel briefly experimented with assembling boxcars in the United States this decade but the majority of its trains made in recent decades were made in China or South Korea.

Where are they now?

Lionel’s story is a bit complicated. Lionel Corporation sold its trains to General Mills, the cereal company, in 1969, then became an operator of toy stores. So for a while there was a situation where Lionel Corporation was selling Lionel-branded trains manufactured by General Mills in its stores. General Mills divested its toy company holdings in the 1980s and Lionel became independent again. Modern-era Lionel has changed hands and reorganized a couple of times since. The original Lionel Corporation went bankrupt in the 1980s, and Lionel the train company bought its trademarks after the bankruptcy. Old brands often take some odd journeys in their lifetime, and Lionel is no exception.

Marx actually outlived Lionel, or at least its first incarnation. In 1972 Louis Marx retired and sold his company to Quaker Oats, another cereal company. That acquisition didn’t go well and Quaker divested itself of Marx in 1978, selling it to a British company that promptly went out of business. Quaker discontinued the Marx trains in 1974. Numerous hobbyists have attempted to re-launch the Marx name, including Jim and Debby Flynn and their Marx Trains venture of the 1990s, but there was considerable legal action around the Marx trademark in the 2000s. The old Marx trademark still has value in the collector market, but little to none in the broad consumer market.

Many of Marx’s toys are still being produced by other companies, such as the Big Wheel and Rock’em Sock’em Robots. Marx’s HO scale trains are now being made by Model Power, and Marx’s surviving O gauge molds ended up in the hands of K-Line, who competed with Lionel with some degree of success for about two decades ending in 2005. K-Line’s tooling, including the Marx tooling, has changed hands several times since K-Line went out of business, but it’s entirely possible that some of the old Marx O gauge products will reappear yet again, under yet another name.

What I would have done to secure the Astros’ database

The now-infamous breached Houston Astros database sounds like a classic case of what security professionals call Shadow IT: a project that the business needs, done without adequate involvement from security and, most likely, from the IT department as well.

These kinds of things happen a lot. A go-getter implements it, cutting through red tape to get a useful project done in record time, and it’s great until something goes wrong.

In this case, “wrong” meant a competitor got into the database and stole trade secrets.

Read more

The Sony breach and why every company should be worried

To me, the Sony breach is noteworthy not just because of its magnitude, but because it doesn’t appear to be driven by profit, unlike the other big breaches in recent memory. Instead, it’s a return of vigilante hacktivism, and entertainment companies are particularly vulnerable because, the Washington Post argues, all movies have an element of politics in them.

That’s a problem for U.S. companies in an interconnected world, because much of the world doesn’t value free speech as the United States does. The plot of the movie “Red Dawn” was changed–China, not North Korea, was the original aggressor–to avoid offending the Chinese government, for example. Search Google for “movies that offended foreign governments” sometime. It’s amazing how many you’ll find.

Read more

A Comcastic-ally bad idea

If you haven’t heard about it, Comcast has plans to build a wifi network for its subscribers, on the back of its other subscribers’ routers. What’s worse is it’s an opt-out service. If you don’t hear about it and say something, you’re a hotspot for any other Comcast customer who happens to wander by.

I’m not a Comcast customer. I’m in Charter territory, and I’m not a Charter customer either. But I have so many problems with this it’s hard to know where to begin, so I sure hope other ISPs don’t copy this. Read more

Sculley on Jobs

John Sculley famously fired Steve Jobs in 1985, a move that’s pretty universally panned today. This week, someone asked Sculley about it.

Here’s the money quote:

“He was not a great executive back in those early days. The great Steve Jobs that we know today as maybe the world’s greatest CEO, certainly of our era, he learned a lot in those years in the wilderness.”

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Lionel in the non-hobby media

Cnet took a field trip to the official Lionel repair facility and wrote a feature story about it. It’s nice to see the attention outside of the hobby press, since it’s frequently news to people that Lionel is still around in any form. Read more

Kansas City and Google Fiber

I get a few questions about Google Fiber, because I have Kansas City connections, and I work in computers. People who’ve known me long enough know that I upgraded to first-generation DSL about 30 minutes after it became available at the apartment complex I lived in at the time. The question then was the same as the question in Kansas City now: What do you do with an Internet connection that fast?

Well, for starters, there’s this novel idea involving the public library… Read more

Fighting Web rage

There’s something about the Internet that turns people into jerks. Or maybe there’s something about jerks that turns them on to the Internet. — Tim Barker, the St. Louis Post-Dispatch

I loved that lead, and the rest of the story is good too. I first started using the Internet in 1993, and I first went online sometime in 1986 or 87.
I think people who started going online in the 1980s and early 1990s tend to be more polite because in those days, “going online” usually meant dialing into a computer that a hobbyist set up in a spare bedroom for the purpose of attracting like-minded people who wanted to talk about shared interests. It was an expensive hobby–generally the computer had to be dedicated to the purpose, and the operator had to pay for an extra phone line, and the software to run the operatiion cost money too.

Whenever someone would start acting rude, it didn’t take long for someone to step in and remind the person that he (in those days, it usually was a he) was essentially a guest in someone’s house, and he had to play by the owner’s rules or get thrown out.

There were still disagreements, of course, and if there were too many people I didn’t like on a particular bulletin board, I’d quit calling. At first I took it personally, but considering that in 1990 there were literally hundreds of bulletin boards running in St. Louis, it was always easy to find a new hangout.

One of my friends from those days ended up being the best man at my wedding. I ran into someone else I knew from that timeframe back in December at a train show. He and I probably talked for more than an hour, catching up.

The big problem today is that people think they own the Internet because they pay $20 a month for Internet access, so they have the right to go anywhere they want and say and do anything they want. And they also think they can do this without anyone knowing who they are or where they live. The combination of unlimited entitlement and zero presence of fear tends to bring out the worst in bitter, unpleasant people.

The thing is, you don’t own the Internet. That monthly fee just gives you the right to use it. If you hop in your car, drive someplace, and pay the cover charge, you don’t own the place. If you start threatening people or otherwise making things unpleasant, the guy who pays the rent can throw you out.

The anonymyty is a bit of a myth too. Ask anyone who’s been sued for downloading MP3s. Tracking someone down online is sometimes difficult, but it’s never impossible. There’s a guy on a train forum I frequent who uses the cryptic name of LS51Heli. Hiding behind a cryptic username, a throwaway Gmail address, and a bunch of false information in his user profile, he relishes in taunting and harassing anyone who disagrees with him–and some people who don’t.

But the security LS51Heli thinks he lives under doesn’t exist. Ask Lori Drew, the woman whose online bullying drove Megan Meier to suicide in 2006. Knowing nothing more than the name of a neighbor, hundreds of people tracked her down. A friend and I spent a couple of hours one Sunday night and Monday morning tracking her down, before her identity became widely known. Most of the tools we used were a bit more complicated than a Google search, but everything we used is free and open on the Internet, ready for anyone to use–provided they know where to look.

I can’t speak for anyone else’s motivation, but we unmasked her so that we could keep her away from his kids. Once a bully, always a bully. We never did anything else with the information.

I’ve never felt the need to go unmask LS51Heli. But it could be done.

Usually the troublemakers on train forums will eventually get banned, and then they’ll slink off to another forum and complain about how their rights to freedom of speech got stepped on. One forum in particular tends to be a real magnet for these people, and they refer to the more mainstream forums as “North Korea,” “Iran,” and “Iraq” while they talk about goings-on at the places that banned them and poke fun at the forums’ owners and anyone they don’t like.

They forget that the person who pays to run the web site has rights too–including the right to throw out unruly guests.

The Internet would be a much more pleasant place if we all remembered that we’re just guests in someone else’s house. I pay my monthly fee, but the site operator’s bill is a lot higher than my $20 a month. It’s no different from visiting my sister. It costs me $20 to drive there, but she pays the mortgage, so she owns the place and she makes the rules.

So we\’re complaining about our economy…

OK, so this is a bit late coming, and I haven’t really been able to think this through as well as I should, so I hope some other people will think through it with me. The problem: Our trade deficit is up.

The solution is to devalue the dollar. Supposedly.Americans crave cheap, foreign-made products. Multinational corporations crave cheaply made products from third-world countries that they can mark up astronomically because of the brand recognition and achieve monstrous profits that they can report to their shareholders every quarter.

To that end, the United States has encouraged outsourcing and granted most-favored nation trading status to totalitarian regimes such as China who are willing to create favorable conditions for this way of doing business.

And now the United States is complaining about continually breaking its own records for trade deficits.

The current administration is responding by devaluing the dollar. That’s a classic idea. By devaluing your currency, you make your own goods less expensive abroad and you make foreign goods more expensive inside your own borders.

But I see at least two problems with that policy. The ruthless Chinese tie the value of their currency to the U.S. Dollar. So devaluing the dollar does absolutely nothing to help our trade deficit with China. Chinese goods continue to cost the same amount of money here, and the price of U.S. goods in China remains the same.

The price of a BMW or Mercedes automobile goes up, but the people who are willing to spend $60,000 on a car are probably also willing to spend $65,000. It only increases the monthly payment by about $80. It might make the price of a Cadillac look a little bit better, but there are plenty of people who believe the BMW is the better car and will pay the extra money. Meanwhile, Europeans will continue to not buy U.S. cars, because Europeans just aren’t very fond of them.

The second problem is that the United States just doesn’t produce all that much anymore. Consumer electronics are almost exclusively made in China, with the main exception being some high-end consumer electronics still produced in South Korea or Taiwan. Toys are almost exclusively made in China. Some large items such as appliances are made here because they are too expensive to ship overseas, but that cuts both ways.

Buying American helps. But we didn’t do that 20 years ago when we still made stuff here. Now it just might be too late.

Part of me also thinks that we need to quit complaining. Look at these plans for a bungalow house from 1912. This house cost $900 to build–assuming one paid someone else to do it. You provided the land. Adjusted for inflation, that would be about $17,000 today. Our grandparents were raised in houses like this. By comparison, my house is a mansion.

Today, without blinking, we’ll pay that much for a car.

Just two or three miles away from me, houses fitting the modern idea of a proper size for raising a family are being built. They’re about twice the size of mine and they sell for about $400,000. Houses like those from 1912, no longer suitable for storing our lawnmowers, are claimed under eminent domain and razed to make room for big-box stores to sell more foreign-made goods. I’m not sure what becomes of the people who by their own choice were still living in them.

Republicans like to blame high taxes for what they call the decline of the traditional American family, where only one parent had to work. Democrats ask what was so great about that, and blame the modern struggle to make ends meet on low wages or discrimination.

But if we lived within our means, we’d be able to afford to buy U.S.-made goods from stores owned by our neighbors, who are far less likely to abuse eminent domain and deprive people of their property rights.

This is a mess of our own making. The government may have encouraged it somewhat, but the government didn’t make it and the government can’t fix it. That job belongs to us.

Assuming it isn’t too late, that is.

You still think outsourcing is a good idea?

Don’t be fooled by the topic I put this in: This has potential implications for any area of manufacturing.

Lionel, the most famous U.S. maker of toy trains and model railroads, has been found guilty of industrial espionage and ordered to pay $40 million to competitor MTH Electric Trains.

What happened? Well, both Lionel and MTH outsource their production. As it turned out, some work that was done for MTH ended up in Lionel designs as well.I really don’t think anyone has a good grasp of what happened, but the story I heard is that a contractor who worked for MTH’s subcontractor designing locomotives moonlighted for Lionel’s subcontractor, and that he reused some work that he did on an MTH design on a Lionel design. MTH claims Lionel knew about this. Lionel claims it did not.

Regardless of who you believe, somebody was wronged. R&D work for one company ended up benefiting its competitor, and now that mistake is costing lots of money.

As a consumer, I’m disappointed because I’ve been led to believe that Lionel and MTH do their own designs and outsource production to Korea and China. Evidently they outsource some of their lucrative R&D as well.

Apologists for both companies have said that Korean companies tend to be related by blood or marriage and that workers routinely move from company to company, taking trade secrets with them and using them. That’s the corporate culture. U.S. corporate culture, of course, is exactly the opposite. We demand that you somehow forget all of your proprietary trade secrets when you change employers. Or at least don’t use them in your new job.

The products involved in this case aren’t the $20 locomotives you see at Hobby Lobby or Toys ‘R Us either. We’re talking premium products that sell for five figures here. I’ve seen them in person–they’re definitely impressive looking. But they’re playthings for people who make six figures per year, minimum. I like O gauge Lionel stuff an awful lot. But I don’t expect to ever own one. They cost more than I’m willing to pay for a computer.

I suspect that with those kinds of profit margins, they could have afforded to build them in Michigan or New Jersey, where Lionel understands how its workers work and its workers understand how its employer works. That’s the scenario if you assume Lionel is innocent. If you assume Lionel is guilty, well, that scenario makes industrial espionage much more unlikely. It’s always best not to allow yourself to be tempted to do something wrong–it’s easier to avoid temptation than it is to resist it.

And if they’d had to raise the price of a $1,400 locomotive by another $100, I doubt too many people would have screamed. Especially if the words “Proudly made in USA” were prominently featured on the package.

There’s some question whether there’s even room in a $100 million hobby for both Lionel and MTH. When your industry is worth $100 million as a whole, and you have to share that pie with four or five competitors, you can’t really afford a $40 million jury award, can you?

Saving a few bucks in labor and R&D may have just cost Lionel its life.