American Flyer
Initially American Flyer—aka "Chicago Flyer"—was something of a budget brand, undercutting the prices of Ives, which was at the time the market leader.
Believing he would be given a significant portion of the company if the trains proved successful, Coleman refused when Hafner asked to exercise this option.
American Flyer's business grew during World War I, which locked out the German manufacturers that had dominated the U.S. toy train market to that point.
During this time, American Flyer also introduced bicycle and motorcycle toys, segmented its market by creating both a low-priced and a high-priced line, and began to depart from its earlier designs by William Hafner.
At that time the factory and administrative offices of the American Flyer Manufacturing Co. were located at 2219-2239 South Halsted Street in Chicago.
In 1925, American Flyer began offering Wide gauge electric trains at a premium price, attempting to compete with Lionel Corporation at the high end of the market.
Coleman sold American (Chicago) Flyer to Alfred Carlton Gilbert, a former Olympic pole vaulter who first made a name for himself in the toy industry earlier in the century when he created and manufactured Mysto Magic sets for youthful magicians.
The initial changes included substitution of the 'slot & tab' couplers with link and pin semi-automatic ones on the higher priced 10" freight cars and steam engine tenders.
A Reading Lines Atlantic, Pennsylvania K5 Pacific, a NYC Hudson, a B&O streamlined steamer (Royal Blue), a UP Northern (4-8-4) and an NKP 0-8-0 Switcher.
The design of the initial version of the HO track was significantly different from that of typical electric trains: the rails were mounted on lithographed roadbed.
But the smaller scale (1:64) became much more prominent with its introduction in the 1939 catalog, which features World's Fair imagery on the yellow, black & white cover.
Already experiencing materials shortages (due to Lend Lease), no new products were introduced in the 1942 catalog, which was only slight different than the previous edition.
The 'link & pin' automatic couplers that had been introduced on the 3/16s O products were reduced in size, with plastic replacing the sintered metal of the originals.
The advantages included eliminating the separate motor (power drain and cost) and ensuring precise (geared) synchronicity of the chugging with the rotation of the drive wheels.
With Louis Marx and Company dominating the low end and a handful of other brands relegated to entry level of the market, Lionel and American Flyer shared premium status.
Gilbert also renewed offering its HO trains shortly after the War, but aside from changing to DC motors and making the cars lighter by using plastic, the products were not updated to conform with the increasingly popular NMRA (National Model Railroad Association) coupler and track standards until 1951.
The discount stores demanded train sets at wholesale prices so low that the profit margins of the traditional manufacturers became unsustainable.
Gilbert took an especially hard hit when a majority of a poorly designed and manufactured red James Bond 007 slot car racing set flooded back as returns after component failures.
[1] In May 1967, Lionel Corporation announced it had purchased the American Flyer name and tooling even though it was teetering on the brink of financial failure itself.
A May 29, 1967, story in The Wall Street Journal made light of the deal, stating, "Two of the best-known railroads in the nation are merging and the Interstate Commerce Commission couldn't care less".
Within two years, Lionel Corp. was bankrupt itself and had sold its train lines to General Mills, including the unused American Flyer tooling.
One year later, the company was sold to Richard Kughn, a Detroit toy train collector who made his fortune selling and developing real estate.
For over a decade, Kughn moved both the Lionel and American Flyer brands forward, getting a shot of momentum from a resurgence in the toy train hobby in the early 1990s.
In 1996, Kughn sold a majority interest to Wellspring Partners LLD, a Chicago-based national turnaround firm headed by Martin Davis.
Kughn retained a small percentage, and rock star Neil Young, another toy train buff, also became a minor investor.
True American Flyer aficionados claim this narrow focus is a conflict of interest and prevents the growth of S Gauge among new train operators.
Complete with TMCC (Lionel's proprietary wireless remote control technology) and a superb sound chip/system (TrainSounds), the Mikados proved to be a hot seller and their success has led to future similar issues.
Also in 2007 Lionel started to sell American Flyer track, the popular 19" radius curve remaining unavailable to this day.
When K-Line fell upon hard times in recent years, it was purchased by Lionel LLC, who then got the Flyer track as well as the tooling for two 0 gauge locomotive designs; the UP Big-Boy and the C&O Allegheny.
Lionel's investment in new tooling is being interpreted among many S-scalers as a sign of commitment by the manufacturer to their market segment, as well as the brand, the gauge, and the hobby in itself.
