American Flyer was a popular brand of toy train and model railroad in
the United States in the middle part of the 20th century.
Although best remembered for the 'S' gauge trains of the 1950's that it made as a division of
the A. C. Gilbert Company, American Flyer was initially an independent company whose origins date
back nearly a half century earlier. Chicago, Illinois-based toymaker William Frederick Hafner developed
a clockwork motor for toy cars in 1901 while working for a company called the Toy Auto Company. According to
the recollections of William Hafner's son, John, he had developed a clockwork train running on 'O' gauge
track by 1905.
Hafner's friend, William Ogden Coleman, gained control of the Edmonds-Metzel Hardware Company,
a struggling hardware manufacturer in Chicago, in 1906 or 1907. Hafner and Coleman began producing
toy trains using Edmonds-Metzel's excess manufacturing capability after Hafner was able to secure $15,000
worth of orders. By 1907, two American retailers, G. Sommers & Co. and Montgomery Ward, were selling
Edmonds-Metzel trains. In 1908, Edmonds-Metzel adopted the American Flyer brand name for the trains,
and by 1910, Edmonds-Metzel was out of the hardware business and changed its name to American Flyer
Manufacturing Company.
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. The trains proved
popular, and American Flyer was soon expanding its product line. However, the company's rapid growth
led to strains in the relationship between Hafner and Coleman.
In 1913, 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.
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.
In 1918, American Flyer introduced its first electric train, an 'O' gauge 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 same year, 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.
In 1925, American Flyer began offering 2 1/8" 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. 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. 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 1920s, 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.
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 car bodies and other parts.
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.
In 1938, W.O. 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. A few years later, 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. Instead, Coleman said he'd give his struggling American Flyer Co. to Gilbert in return for a
share of the profits. Gilbert quickly agreed.
To A.C. 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 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,
and re-designed the product line.
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 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.
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.
During the war years, the A.C. Gilbert Company converted completely to war production. Hundreds of thousands
of flares were produced. Drawing on their experience with magic tricks, booby traps that caught the
enemy off guard and triggering mechanisms were 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.
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.
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. All 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. In 1957 there was a model of the
New Haven's electric created and marketed. It cost $100,000 per 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. It was not offered again until 1955 when a new revitalized line
called Gilbert HO, 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.
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 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.
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
companies' traditional
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.
These problems were compounded by the death of its founder, A.C. Gilbert in 1961.
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. Within a few months, though, A.C. Jr., died. The company continued to manufacture trains of
limited appeal, thanks to the questionable quality. The family sold all its 144,000 shares to the Disneyland
Hotel and Lassie Conglomerate owners right after A.C.'s death.
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 manufacture 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.
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 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. 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 seems to remain locked on promoting its own '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 American Flyer-branded product sold by Lionel,
LLC today is reissues of 1950s 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. One complaint by longtime American Flyer devotees is that Lionel isn't creating Flyer products
that appeal to the toy train masses -- rather, focusing instead on a small market of Flyer collectors.
However, winds of change are blowing. Each year since 2002 Lionel has increased the number of American
Flyer offerings, a sign the demand for 3/16" 'S' gauge is growing. In late 2004, Lionel finally debuted
a new steam locomotive -- a highly-detailed, 2-8-2 Mikado in multiple road names. Utilizing all new tooling
and issued under the American Flyer name, the Mike is the first original American Flyer steam locomotive
design since the late 1950s. 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. In late 2006, Lionel began delivering an updated remake of its largest steam
locomotive, the famous 4-8-4 Northern, as well as a gray Union Pacific Northern with smoke deflectors
(elephant ears); both new versions have digital sounds. Due in late 2006 or early 2007 is 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 are 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 is being 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.
