Another early and popular clockwork locomotive was the #0 with iron wheels. It was sold
in combination with a #328 tender and #1107 coach as a set. The #3 locomotive was a variation of the #0 that had an
open cab ventilator hatch and was combined with a #120 tender. Production of the #3 windup loco lasted without
substantial change into the 1920's.
In 1913, William Hafner left the company. 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. Hafner
started the Hafner Manufacturing Company, which sold a line of trains called
Overland Flyer. Sommers immediately stopped carrying the American Flyer trains in favor of Hafner's
brand. Initially, the Hafner and American Flyer product lines were very similar, suggesting they may
have been built using the same tooling. This suggests the possibility of the two companies continuing
to collaborate. Hafner's business survived as a manufacturer of clockwork trains until 1951, when he
sold his business to All Metal Products Company.
W.O. Coleman, Jr. joined the company in 1914. American Flyer's business grew during World War I, which locked out the German
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. They also expanded to other market territories,
In 1918, William Coleman died and his son, William Ogden Coleman, Jr., took over the company.
At that time the factory and administrative offices of the American Flyer Manufacturing Co. were located
at 2219-2239 South Halsted Street in Chicago. The factory had its own railroad sidings and dock so cars
could be slid inside the building for unloading/loading.
Also in 1918, after World War I, American Flyer introduced its first electric train, an 'O' gauge steam outline model that was simply a
windup model with an electric motor in place of the clockwork motor. This was a common practice at the
time. The electric loco used the castings of the large #15. This style of engine lasted through 1924.
From 1924 to 1930 electrified steam models disappeared completely from the American Flyer catalogues. Only electric outline locomotives were offered.
Between 1920 and 1934, the company released electric
toy trains meant to resemble trains running in New England at the time. They were made out of lithographed steel,
enameled steel, and cast iron. Electric-outline locomotives of this period were the #1201 (no headlight), and
#1217 (with headlight). These evolved into the well-known #1218, #1270, and the uncataloged long-framed #7011 of 1928,
and the #3110 in the 1929 Explorer set. The line of electric types in the later 1920's also included the #3011 and set, and the
little lithographed #1096 box-cab.
Even though electric trains were growing in popularity in the late 1920's the mechanical train continued to be a
big-selling item for American Flyer. A variety of trains were offered to the prospective buyer, ranging from the Empire
Express, the #7, the #13 set, powered by the #14 loco, and a train of double-truck cars drawn by the #16 steamer,
which was the largest in the line. The end of the 1920's signalled many changes at American Flyer. The electric
trains began to over-shadow the mechanicals in sales. Zinc die-casting began to replace cast-iron, and enamel replaced
lithographed finishes in all but the most inexpensive sets. No cast-iron locomotives were cataloged after 1932.
Wide gauge Passenger Sets
In 1925, American Flyer began offering 2⅛" Wide gauge electric trains at a
premium price, attempting to
compete with Lionel Corporation's Standard gauge trains at the high end of the
market. Marketed as “Wonder Trains,” American Flyer’s shiny, brightly colored train sets had patriotic names
like “American Legion,” “President’s Special,” and “Mayflower.” They were also extremely pricey for the 1920s.
The cadmium-plated “Mayflower” set, for example, ran about $100, a full month’s salary for an average person.
Wide gauge was the fad gauge of the 1920's, with Flyer
and Lionel the big makers, and Ives, Boucher and Dorfan
with significant shares of the market. In 1926 American Flyer used Lionel bodies for their first standard
gauge freight cars. In order to fit on the American Flyer engine coupler slot, one of the coupler inverted "T" tabs
was filed off. These freight cars are easily identifiable as on the bottom of each car is marked
"Made for American Flyer Lines".
In 1928, American Flyer's competitor Ives went bankrupt. American Flyer and Lionel
jointly purchased and operated Ives until 1930, when
American Flyer sold its share to Lionel. During this time of joint
operation, American Flyer supplied Ives with freight car bodies and other parts. Since American Flyer was in need of a steam engine
for its own Wide gauge line, in return, the Ives die-cast #1134 Wide gauge locomotives and tenders were handed over. Flyer
was also tasked with handling the Ives clockwork
line of trains in 'O' gauge. Flyer only used the #1134 boiler and tender casting. The running board had to be cut slightly,
to accomodate fitting the American Flyer motor. And some piping had to be eliminated, due to the cutting of the section of
the running board. The tender maintained the original Ives design. American Flyer utilized their own trucks and coupler.
A "Golden State Limited" name plate was installed on the tender. The automatic reversing version of the #1134 locomotive was
given an American Flyer brass button #4694. A whistle was added to the American flyer #4694, but not to the
Ives' #1134 versions.
American Flyer's 1929 catalog stated this "new" die-cast engine: "The 15" long locomotive and the realistic
10" tender follow exactly every element of design, construction and finish found in the real locomotive." The following year,
the former Ives engine was cataloged with a new Vanderbilt tender and appeared at the head of several sets, among them The Warrior,
carried over from the 1929 catalog, and a new, less expensive set called The Iron Monarch. Priced at $54.50 - a sum that only rich
families could afford in 1930 - The Warrior featured illuminated club, Pullman, dining, and observation cars, all with Pocahontas
letterboards. In contrast with Lionel cars, where an inserted window strip formed all the windows on one side of a car, the Pocahontas
cars had individual brass window frames with individual clear "glass" inserts - requiring a much more labor-intensive manufacturing
process. The catalog noted that "This passenger train offers a full measure of value, quality and long life which has no equal elsewhere."
At $47.50, The Iron Monarch featured the same style of cars as its more expensive stable mate, but without the diner. It was described:
"Its superiority is inbuilt. Long life and performance are obtained by building strength, efficiency and dependability into the individual
units that make up this quality train."
American Flyer #4000 Series Standard gauge Freight Cars
During the early 1930's, American Flyer struggled under increased competition,
especially at the low end of the market. In 1931, Flyer announced it would not produce an electric train set to sell for less
than $4 like its competition had. However, within three months, it relented and released a train without
transformer that sold for $3.95, and in 1932, it released a set with transformer that retailed for $3.50.
Sales increased, but the company was not profitable. Expansion into other toy arenas also failed.
The Great Depression killed all the Wide gauge lines
and 'O' became the mainstay of all makers that survived. Flyer Wide gauge production ended in 1932. Having
weathered the depression, Flyer, like Lionel, concentrated on more scale accurate trains that the public
was demanding. Like most of its competition, American Flyer did well in the 1920's, selling more than half
a million trains in its best years, but suffered in the Great Depression, during which the company's
focus shifted back to the more economical 'O' gauge trains. Low-end 'O' gauge trains became the mainstay product. One exception
was a very successful high-quality diecast New York Central Hudson locomotive with cast aluminum tender, produced in 1936.
Other notable trains from this era were the cast-aluminum CB&Q Zephyr, the Hiawatha and the City of San Francisco.
In 1938, W.O. Coleman sold American (Chicago) Flyer to Alfred Carlton Gilbert, a former Olympic pole
vaulter and Yale medical school graduate. Gilbert had made a name for himself in the toy industry in 1909 when he created and
manufactured Mysto Magic sets for youthful magicians. In 1913, his A. C. Gilbert Company also
became the makers of Erector Set construction toys. The two toy magnates were just finishing shooting
on Gilbert's game reserve in New Haven when Gilbert casually mentioned he was thinking about manufacturing
toy trains. Gilbert had been making plans to enter the HO gauge train market. Instead, Coleman said he'd give his struggling
American Flyer Co. to Gilbert in return for a share of the profits. Gilbert quickly agreed. Gilbert had just what the company needed —
high standards and the business smarts to pull the company out of debt. Coleman worked out a potentially lucrative royalty deal with
Gilbert, but he died in 1939 before he could reap any of the benefits.
Gilbert was a shrewd businessman. His accomplishments included not only winning an Olympic Gold medal
in pole vaulting, but he was also the developer of the bamboo pole and new techniques in vaulting. He was also in charge of the U. S.
Olympic team in the legendary 1936 games. He is credited with being one of the founders of Toy Manufacturers
of USA, Inc. in 1916. He was also credited with being a performing magician, a medical doctor, a hunter, a dog
breeder, home builder, and toy industry pioneer.
A. C. Gilbert had previously included trains as part of the Erector Set line. In 1915, the 3rd
year the famous Erector Sets were made, the manual included a design diagram for construction of a 4 car train that was comprised of
a locomotive, tender, gondola and caboose. The design contained so many parts, that no single Erector Set was big enough to construct
this train. Another pattern was published in 1926 that was for a locomotive and tender. This iteration was much more realistic
looking, as Gilbert had developed parts for a boiler and boiler top. Later on during the Erector Classic
period (1924-32), other rolling stock patterns were developed. Those included a more detailed gondola and caboose. In 1930 the
Erector 20th Century #8 set was produced. This was a highly detailed, almost scale, non-powered #4 gauge model of a Hudson J-3 4-6-4 locomotive.
At 28" long, 5¼" wide, 8" tall and weighing 9 lbs., this set was very large, and consisted of over 70 separate parts to assemble.
Initially the detailed 19½" long tender with New York Central markings to match was made available in a separate Erector Set. In 1931,
a #8½ set was introduced that consisted of both the locomotive and tender. Gilbert also offered this set in a factory pre-assembled
version. This static model could be outfitted with an electric motor capable of operating the driving wheels and valves.
The classic Hudson Erector Sets were made through 1937, and are very rare and highly sought after by collectors of
both Erector Sets and model trains today. They garner very high prices, regardless of their condition.
To A.C. Gilbert the American Flyer train was a real challenge. "Chicago Flyer" was a second rate company just
hanging on. The trains were no better than the Lionel items being marketed at the same time. In 1938
AF sales were not quite at the million mark. As an attempt to improve the image, A. C. Gilbert
decided in 1938 to release a line of HO gauge trains for the first time. The introductory American Flyer
HO line, was called "Tru-Model Trains." The emphasis was on producing scale models rather than toys.
Great pains were taken to obtain blueprints of prototypes and achieve accuracy. The HO line did not even carry the
American Flyer Lines logo. The HO line remained in
place through 1963, but it was not promoted very highly. The A.C. Gilbert Co., in what litte advertising they
did for the HO line, emphasized the high amount of precision within their HO steam locomotives. A valiant
effort was made to appeal to true scale modelers during the early HO years. Unfortunately,
Gilbert did not have quite the impact they desired in the HO market during its first years of production.
Gilbert had bought the name and nothing else when he got American
Flyer. He planned to redesign the entire line from track to transformer.
Gilbert soon moved the company from Chicago to New Haven, Connecticut, closing American Flyer’s Chicago plant.
He then began to completely re-design the product line. The main thrust - technically and financially - went into redesigning the 'O'
He pioneered the 3/16" to one foot (S-scale) variant of 'O' gauge in 1939, in which the locomotive and car
bodies are scaled to 1:64 scale, making them approximately 25% smaller than the standard 1:48 for 'O' gauge
while still running on the same type of three-rail 'O' gauge track. While this allowed the 'S'-scale trains to navigate
tighter curves that would cause a conventional 'O' gauge train to derail or jump the track, Gilbert actually
introduced a wider radius (20") track for added realism. This still resulted in curves that were much tighter
than those that appear in the real world, but appeared much more realistic than the 13.5" radius (O27) gauge
train cars that appeared "stubby" in length. The new 40" diameter circles allowed more track in the same space
as a layout constructed with O72 (36" radius) curves. Focusing on realism, Amercian Flyer put out this line of tiny,
high-quality, and highly detailed diecast train sets in 1939, led by the acclaimed Union Pacific 4-8-4 “Challenger” Model #806 and the
#1680 Hudson. Ironically, these were both they designed to operate on '0" gauge track, but were in reality 3/16 scale.
Lots of changes were introduced in 1939, including a new 3 digit numbering scheme. Gilbert also introduced
it's new remote directional control for locomotives in 1939. This reversing unit was operated via a remote control
button, that when pushed, would interrupt the current by triggering a relay. The engine Would continue in the same direction even after the
track current was interrupted, the only way to change the locomotive's direction was to push the remote control button. 'O' gauge locomotives that
had the new reversing unit relay installed were identified by the number on the cab, or by noting that the loco does not have a reverse unit
lever protruding through the boiler, but instead has a small pinhole in its place. Exceptions to this rule were the
#569 Hudson and the #571 4-8-4, both catalogued in 1940. A nail or pin inserted into this hole when the current is on will change the direction
of the loco without using the button. In 1939, Remote Directional Control came with the four offered Tru-Model
sets and all the HO gauge sets.
The first accessory made of lucite was introduced in 1939. This was the #587 block signal. The purpose of
the lucite was to make a smaller, better proportioned light. The bulb was located in the base of the unit and the light was
refleccted via the lucite to simulate light emission. The electromagnetic crane was also new in 1939. Flyer beat Lionel by a year with
this introduction. A station that would be around for several years, that is commonly called by collectors the MystiC Station or talking
station, first appeared in 1939. The Mystic Station was sold as a plain illuminated paSSenger and freight station and also as
a Koostikin talking passenger and freight station.
Model train hobbyists were even more taken with 1940’s diecast Pennsylvania K-5 locomotive and the Baltimore & Ohio
“Royal Blue” 4-6-2. American Flyer also produced inexpensive sheet-metal versions for consumers who didn’t have such deep pockets.
In anticipation of America’s involvement in the war, Gilbert opened the Gilbert Hall of Science in New York on September 17, 1941,
to keep his company’s name in the public consciousness. It was a brilliant marketing maneuver, showcasing American Flyer products
in an elaborate miniature scene featuring 80-feet of train track surrounded by mountains, waterfalls, crossings, and towns.
The hall also contained impressive displays of Erector sets and other Gilbert products like chemistry sets and microscopes,
as well as sales offices. Soon, other cities had their own smaller versions of Gilbert Hall.
By 1941, Gilbert had discontinued the earlier designs and advertised his new American Flyer products as
"Every train 3/16" scale from front end to rear end." Some boxes were labeled "3/16 scale" and others labeled
"Tru-Model" As most prior trains from American Flyer and other manufacturers paid little attention to scale
(proportional size mirroring the prototype), this new wrinkle made Gilbert American Flyer distinctive, as
his cars at 1:64 were much closer in scale dimension to the prototypes on real railroads than the
comparatively stubby 1:48 scale rolling stock that ran on 'O27' track. At the same time, Gilbert also released
a line of HO scale trains. Total A.C. Gilbert sales for the year 1941 were above $4 million.
During the war years, the A.C. Gilbert Company converted completely to war production. Hundreds of thousands
of parachute flares were produced. Drawing on their experience with magic tricks, booby traps that caught the
enemy off guard and triggering mechanisms were also produced. The motors that controlled the trim tabs on
the first American fighter planes came from the genius of the A.C. Gilbert Company. Designed in a record 72
hours from inception, these tiny motors were produced in thousands and became the prototype for the motor
that powered more than a million and a half engines that pulled a string of freight or passenger cars
around the family Christmas tree. For the war contribution and efforts, Gilbert won 4 Army-Navy "E" awards,
an honor presented to companies during World War II for excellence in production of war equipment.
In 1946, after World War II, Gilbert discontinued manufacturing three-rail 'O' gauge trains entirely
in favor of the slightly (25%) smaller and more realistic 'S' gauge and in the process eliminated the most
unrealistic aspect of toy trains -- the center rail. His 3/16" American Flyer used two-rail track sized
closer to 1:64 scale, or about seven-eighths inches between rails. The minimum radius for Gilbert's
curves was 19 inches, which added to the look of "realism" missing with larger 'O' gauge trains running
on curves with a smaller 13.5-inch radius. It was a new scale and a new gauge for toy trains. These
new trains ran on realistic two rail track that was not rounded on top due to some antiquated extrusion
process, but it was "T" shaped like real prototypical railroad track. The surface contact on this new track
was greater and so was the pulling power. AF never needed "magna-traction" - it had real traction in its
engines. American Flyer 'S' gauge was first unveiled at the March 1946 Toy Fair. The entire pre-war line of 3/16"-scaled
locomotives and cars were converted to 'S' gauge, 2-rail operation. Plus a whole new line of passenger
and freight cars went into production.
In 1946 the American Flyer #332 Union Pacific die-cast 'S' gauge locomotive was introduced.
This Northern style locomotive had a 4-8-4 wheel arrangement with 4 leading, 8 driving, and 4 trailing wheels. It was
accompanied by a 12 wheel oil type tender. At 21½" long, it was the longest locomotive and tender combination ever
made by American Flyer. It used a worm-drive Pull-mor motor, featured Red Glowing Smoke and choo-choo sound. Eventually,
there would be 8 models of the Northern 4-8-4 produced by Gilbert. Changes included the inculsion of a remote control steam Whistle.
Although it carried the Union Pacific herald, it was patterned after engines employed by the Great Northern R.R. and New York City also
had these but called them Niagaras. The American Flyer Northern (33x series) is modeled after a specific
Union Pacific Locomotive. It would remain in the catalogue through 1957 with both AC and DC versions being made, and
original selling prices in the range of $35.
In 1947 a 2 train contol system was introduced that facilitated operation of both AC and DC
powered train motors on the same track. The A.C. Gilbert Co. maintained factories in New Haven and Branford Connecticut along
with their famed Gilbert Hall of Science, in New York City. Other cites such as Chicago and Washington, D.C.,
also had Halls of Science. The New York Hall of Science, had a massive train layout on the main floor along
with displays of Erector and Science toys. On the second floor was another train layout not open to the public,
it was reserved for salesmen, buyers and selected guests. Work shops and offices occupied the remaining floors.
After World War II, A. C. Gilbert had lost some of his drive. A. C. Gilbert, Jr. came into the business and was
given increasing responsibilities. However, Al Jr. did not have his father's drive and decisiveness. He could
be influenced by others.
The Flyer 'S' gauge line developd a devoted following of fans, who were drawn to the detail and
realism of the trains. Lionel trains, however, had more bells and whistles—literally. Lionel’s patented built-in whistle
sounded just like a real steam engine’s, while American Flyer fans had to content themselves with “whistling billboards”
off to the side of the track. In 1949 the Flyer #314AW air whistle was
released, but this technology was found to be in violation of a Lionel half-wave registered patent. Royalty
costs were deemed to be too costly, and the product was withdrawn. In 1951 Flyer released its “Nathan air-chime” whistle,
but operators complained of its wheezy, fake sound. 1950 saw the release of new diesal locomotives with plastic shells and
a reverse loop relay, to deal with the track current issues presented when 2 rail loops were implemented. Also in 1950,
Gilbert released a Circus Train.
In order to further differentiate his product line from that of Lionel, Gilbert
employed a bullet-shaped
(link) coupler, but within a few years (1952), a newer, more realistic knuckle coupler design appeared.
Flyer played up its improved realism and attention to details, with two-rail track and prototypical couplers,
with Gilbert himself saying the design was inspired by his son's dissatisfaction with other toy trains
available on the market. "Kids want realism", he said. His trains, which were closely proportioned to their
prototypes, also had more detail elements than most 'O' gauge competitors. 1952 also saw the introduction of
red glow smoke, Pull-mor motors, and a dead man control on transformers. The company's rendition of the New Haven R.R.'s
distinctive passenger coaches became so recognizable that the full size prototypes became known as "American Flyer cars."
All steam outline engines were die cast to make
them look real and to have the heft of the real thing. There were, in the company's prime, seven basic
steam type engines. There was one basic diesel and one basic diesel switcher. 1955 saw the introduction of
the Diesal-Roar sound unit. In 1957 there was a model of the
New Haven R.R.'s EP-5 electric loco created and marketed. It cost $100,000 for the engine design.
The Gilbert HO line went back into production after the war also. The primary
difference being that trains that were previously produced in diecast, were now plastic. In 1951, the
HO line was idled due to the Korean War. No magnets were available
for motors. It was not offered again until 1955 when a new revitalized line
called Gilbert HO (instead of American Flyer Lines), consisting of ready-to-run trains made by Gordon Varney's
Florida based company was released. Varney provided the A-B F-3 diesels which Gilbert started offering for
the first time in 1955. And Varney created the first HO boxcar offerings that the Gilbert line ever carried.
They also made freight cars, passenger cars and steam locomotives for Gilbert. Once again however, sales
were not what Gilbert had expected them to be.
In 1957 the 3 digit numbering system that had been in use was replaced with a 5 digit system. This change
was made because so many differnt products had been manufactured, that available catalog numbers for new products were running out.
That year, 1957, saw the largest catalog of products ever offered by the A.C. Gilbert Company.
On their 50th anniversary in 1959, Gilbert produced the famous Frontiersman Old Time
passenger train in both 'S' gauge and HO. The 'S' gauge is fairly easy to find these days, but the
HO version is not so easy to come across. Gilbert manufactured the 'S' version, but looked outside to
Tyco/Mantua to manufacture the HO version. This set, which included a 4-4-0
wood burner type loco and two passenger cars is referred to as the 'Fifty Years of Progress' set
and is highly sought after by collectors.
Although the line was extensively redesigned, with interruptions during World War II
and the Korean conflict, by the time the redesign was complete in the mid 1950's, electric train sales had already begun their
long-term decline. While popular, American Flyer was always the No.2 brand to Lionel in terms of
market share at the
high end of the market. Based on comparative sales records taken from Moody's Industrials of the A.C.
Gilbert Company and Lionel Corporation between 1950 and 1960, the total train sales were about $340 million.
Of this, American Flyer is estimated to amount to $120 million, or as much as 1/3 of the market.
With Marx and a handful of other brands relegated to the
low end of the market, Lionel and American Flyer shared premium status. A rivalry emerged between both
companies' fans that continues today. Gilbert in its prime, was one of the largest, best known and respected
toy makers. It was also the largest manufacturer of fractional horsepower motors, holding the patent for
Like Lionel, Gilbert was caught off guard by the popularity of HO scale trains
that offered better realism
at a lower price than its American Flyer 'S' gauge products. But the true reason for the demise of the toy
train industry was the changing interests of American youth. A new technology called television was taking
the place of many traditional hobbies, and the toy market was subject to the success of unpredictable
overnight fads like the Hula-Hoop and yo-yo. Kids were also eschewing their Lionel and American Flyer
trains in favor of remote-control slot car racing sets.
Finally, the national phenomena of the discount store craze was ravaging toy train
distribution network -- mom-and-pop hobby shops -- and sending them into financial oblivion. The discount
stores demanded train sets at a low wholesale price and refused to offer the personal attention and repair
services of the hobby shop. In order to get product on the shelves of discounters, toy train manufacturers
cheapened their lines to get the price point down on sets -- which exacerbated the downward economic spiral.
Longtime train collectors and hobbyists were offended at this newer production, dismissing the new products
as "cheap junk", an accurate description.
A.C. Gilbert retained some control of the business until 1958, when illness forced him to minimize
his activities. The company's problems were compounded by A.C. Gilbert's eventual death in 1961, at the age of 76.
With the popularity
of toy trains and construction toys declining, and without another successful product line to buoy the
company's finances, Gilbert found itself in serious financial trouble. Finally, a majority of the company
was sold by the family to a holding company, the Wrather Group, in 1962 with A.C. Gilbert, Jr., acting
as CEO. The controlling interest in Gilbert was sold because in 1961 Al, Jr., A.C.'s son had
become aware that he himself had serious health problems. Within a few months, A.C. Jr. also passed away.
The company continued to manufacture trains of
limited appeal, thanks to the questionable quality. The family had sold all its 144,000 shares to the Disneyland
Hotel and Lassie Conglomerate owners (Jack Wrather was the producer of "Lassie") right after A.C.'s death.
It was the end of an era. Gabriel Industries bought the Erector Set line from Wrather Corporation for no money,
just a promise of future royalties. It became the Gilbert Division of Gabriel Industries, and was moved to Lancaster,
PA. Erector Set products continued to be manufactured in the US through 1988. The Erector brand ownership eventually was acquired
by the Japanese NikkoCorp., a maker of remote-control toy airplanes and cars. The toy is distributed in the U.S. by
Brio, a public company based in Sweden that is known for wooden train sets.
Under the new ownership, the A.C. Gilbert Co. continued to struggle, although the new owners took a
more aggressive approach to advertising and marketing than when the firm was headed by the more
conservative A.C. Gilbert. The Company never made money after that year. It lost and it lost and it
lost - for five straight years - up to $17 million. It manufactured a wide variety of poorly-designed
and poorly-conceived toys (dolls, racing sets, games) that sold slowly, if at all, and was nearly
overwhelmed by store returns of defective merchandise. 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. Because of the number of returns, these sets are rare and extremely collectable,
now selling for an average of $1000 on ebay. In addition, the company delivered many of its toy line
products to discounters with a "100% sale guarantee." When the merchandise didn't sell through, it ended
up back in Gilbert's warehouses. The company discontinued the American Flyer train line in 1966 and
finally declared bankruptcy in 1967. All the Gilbert Halls of Science had been closed by 1966.
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". Former Lionel treasurer Robert A. Stein
said Lionel did not initiate the deal; both companies had farmed out their accounts receivable departments
to Arthur Heller & Co., who initiated the transaction. While various accounts published over the years
valued the deal at $150,000, Stein's recollection was that Lionel simply liquidated $300,000-$400,000
worth of American Flyer inventory for Heller in exchange for the tooling, which, by some accounts, sat
unused and neglected in a parking lot for some period of time. Lionel Corporation never manufactured
American Flyer trains.
Within two years, Lionel Corp. was bankrupt itself and had sold its train lines to General Mills,
including the unused American Flyer tooling. In 1979, General Mills' Lionel division started to reissue
Flyer products under that name employing a mix of previously unused railroad heralds and traditional
Gilbert American Flyer designs.
In 1984, General Mills sold the Lionel Co. to Kenner, a toy manufacturer. 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 1990's. 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. Young's contributions include designing a sound system for trains (RailSounds) in 1992,
as well as the Trainmaster Command Control (TMCC), a unique radio control system. The new company is known
as Lionel, LLC.
The American Flyer brand name survives today under the guidance of Lionel, LLC, although Lionel's
advertising and marketing emphasis tends to remain skewed toward the 'O' and 'O27' gauge product
lines. True American Flyer aficionados claim this narrow focus is a conflict of interest and prevents the
growth of 'S' gauge among new train operators. Most of the initial American Flyer-branded product sold by Lionel,
LLC consisted of reissues of 1950's designs utilizing refurbished old Gilbert tooling, decorated in traditional
road names and paint schemes used by Gilbert, as well as an influx of some of today's modern railroad
heralds. For a long time, American Flyer devotees were concerned that Lionel was not creating Flyer products
that appealed to the toy train masses, but rather, focused on a small market of Flyer collectors. Lionel has publicly stated that
they are committed to the American Flyer product line.
Each year since 2002 Lionel has in-fact increased the number of American
Flyer offerings, a sign the demand for 3/16" 'S' gauge is growing. In late 2004, Lionel debuted
a new highly-detailed, 2-8-2 Mikado steam locomotive in multiple road names. Utilizing all new tooling
and issued under the American Flyer name, the Mike was the first original American Flyer steam locomotive
design since the late 1950's. It was touted by Lionel as "an engineering marvel which even brass collectors can admire".
It came complete with TMCC (Lionel's proprietary wireless remote control technology)
and a sound chip/system (TrainSounds). The Mikados proved to be a hot seller and their success has
led to similar product issues. In late 2006, Lionel began delivering an updated remake of AF's largest steam
locomotive, the famous 4-8-4 Northern, as well as a gray Union Pacific Northern with smoke deflectors
(elephant ears). Both of these new versions were equipped with digital sounds. The 2006 Lionel Catalogue One included
over thirty different products in 'S' gauge American Flyer. In 2006 and 2007 came a new high-detail
Pacific (4-6-2) with both TMCC capability and RailSounds. Additionally, Lionel released in 2006
the first newly tooled passenger fleet. These heavyweight style cars were neither a refashioning of older
Flyer designs nor a repurposing of Lionel '027' rolling stock (as some earlier Lionel/Flyer freight cars
had been.) Lionel's investment in new tooling began to be taken among 'S'-scalers as a sign of real
commitment by the manufacturer to their market segment, and as an optimistic future view for the brand,
the gauge and the hobby itself. Over the past few years, LIonel LLC has released scale SD70ACe and U33C diesals
and in 2011 a 4-6-6-4 Challenger steam outline loco was issued. In 2012, an American
Flyer 2-8-8-2 Y-3 class detailed locomotive was manufactured
based on the 1919 prototype that ran on the Norfolk & Western R.R.
As far as the classic American Flyer wide gauge and 'O' gauge trains of the 1920's and 30's,
reproductions have been made and sold over the years by the likes of McCoy Manufacturing,
Richart, Varney-Siris, and MTH.