K-Line Electric Trains is a brand name of 'O' gauge and 'S' gauge model railway locomotives, rolling
stock, and buildings. Formerly the brand name under which Chapel Hill, North Carolina-based MDK
Inc., sold its products.
MDK was founded in 1975 by Maury D. Klein. Maury Klein began his career in toy trains at age four,
while watching a battery powered train circle a loop of track. He was puzzled and unsatisfied. At age
six, he received a Lionel train set. He was no longer puzzled.
Maury's train collection began to grow, and by 1974 he was selling model trains through a small
mail order business while attending classes at the University of North Carolina. The more he sold the
more he realized that there was room for his own train company in the tinplate marketplace. Soon, on a plot
of land near Chapel Hill, NC, Maury constructed a building for his mail order business. Shortly thereafter,
in 1979, with the help of his father, Mark Klein, Maury and friends began building O27 and 'O' gauge track
under the name MDK K-Line.
Like competitor MTH Electric Trains, MDK was a large Lionel dealer, and its
mail-order ads appeared in magazines such as Model Railroader in the late 1970s. MDK first used the
K-Line name on a line of aftermarket Lionel-compatible tubular track as well as a copy of the
A.C. Gilbert American Flyer line of two-rail 'S' Gauge track which Maury Klein
acquired at Gilbert's demise.
Louis Marx and Company's final demise in 1978 led to MDK increasing the K-Line
product line. In 1980, MDK purchased the tooling for Marx's Plasticville-like Marxville buildings and
accessories for train sets at bankruptcy. In 1981, K-Line began turning out 'O' gauge scale buildings
as K-LineVille. K-Line was also able to recover additional Marx tooling by scavenging
through old factories and warehouses. In an oft-repeated story, Maury Klein and his plant manager, Brent
Chambers, found the molds for the Marx 1947 model #333 Pacific and #1829 4-6-2 Hudson locomotives in a
dilapidated Fisher-Price warehouse near Buffalo, New York in 1984. The warehouse was unlighted, unheated,
and was missing part of its roof. Snow was actually coming through the hole in the roof, as they scavenged
the molds.
The next acquisition was a collection of Kusan rolling stock dies. Kusan
Model Trains (KMT) Corporation built plastic toy trains using dies made by
Auburn Model Trains (American Model Trains in an earlier life).
In 1961, KMT bailed from toy train manufacturing and the dies were snapped up by Andy Kriswalus
for his Kris Model Trains Company. Kris sank in the early 1980's, however, and Jerry Williams bought
many of the dies for his Williams Reproductions. Williams used some of the
molds for his own models before selling them to MDK K-Line in 1986.
By 1986, K-Line was producing O27 locomotives, cars, and figures from former Marx and
Kusan tooling, and, with minor changes, began marketing them under the K-Line
brand, competing with Lionel at the low end of the market. The dies mostly remained unchanged, with
only the branding changing--for example, "Marxville" plastic buildings became "K-Lineville". K-Line
changed the couplers on the Marx-derived trains to make the cars compatible with Lionel,
and, eventually, improved the graphics.
K-Line's 1986 catalog featured track, buildings and rolling stock at very affordable prices.
Meanwhile, two KMT diesel locomotive molds an Alco FA-12 and an MP-15, were being reworked and updated
by K-Line's research and development team.
Maury Klein's 1987 catalog opened to reveal
train sets, track, and accessories that threatened to
catapault the company into the industry's upper echelon, alongside Lionel, Williams, MTH, and
Weaver. But while Klein offered quality products at low prices, he was a
step away from the premium grade models of the competition. K-Line continued to inch forward. By 1995
K-Line had upgraded the original Kusan dies to produce an Alco ABA version of the MKT Texas Special
with considerable detail added.
During the 1980's, K-Line filled much the same role that Marx had in the model railroading arena,
supplying similar trains at a lower price than Lionel, but with less prestige. Because K-Line's budget
offerings remain almost unchanged from the old Marx designs, Marx collectors
sometimes source spare parts from K-Line.
In the 1990's, K-Line was able to purchase more
disused tooling from other manufacturers, allowing
it to offer full-size 'O' gauge for the first time, which it supplemented with pricier 'O' gauge
locomotives and rolling stock of its own design, shifting its emphasis away from its budget offerings.
K-Line's 'S' gauge offerings are a recent entry, providing budget-priced cars as well as the
already produced track compatible with American Flyer-brand trains. Unlike its current 'O' gauge products,
K-Line's marketing on its 'S' gauge cars centers its price advantage over the competition. Most of the 'S'
gauge products are made from old Marx O27 molds, with 'S' gauge trucks replacing the 'O' trucks.
K-Line and Lionel were known to criticize one another's offerings in print advertisements, and the two
companies challenged one another in court as well. The two companies settled a lawsuit on August 10,
with K-Line agreeing to withdraw infringing products by January 31, 2006 and paying a royalty to
Lionel in the interim. K-Line also licensed some of its technology to Lionel, and reimbursed $700,000
of legal costs. Shortly thereafter the settlement fell apart and on August 23, 2005, MDK filed for
Chapter 11 bankruptcy protection. On October 27, K-Line and Lionel reached a new settlement, including
a permanent injunction against manufacturing products containing the disputed technology, a $2 million
damage claim in its bankruptcy case, and royalty-free access to several K-Line patents.
K-Line's 2005 bankruptcy petition stated that its annual sales were between $7 and $8 million.
Over the next few months, K-Line's operations slowed and there were numerous layoffs and rumors
of potential purchasers, which were highly publicized among hobbyists. On February 16, 2006, Lionel
announced it had purchased K-Line. Since Lionel was also in bankruptcy, the deal, which actually
involved the purchase of K-Line by Sanda Kan, its Chinese subcontractor, followed by Sanda Kan's
licensing of the trademarks and intellectual property to Lionel, took several weeks to become final.
The deal was finalized on April 18, 2006, and Lionel made the announcement the following day. K-Line is
now owned by Sanda Kan, the Chinese toy manufacturer that formerly
acted as K-Line's subcontractor. Sanda Kan has licensed the use of the K-Line brand and intellectual
property to Lionel Trains LLC
Prior to the 2005 legal action, the relationship between Lionel and K-Line had generally been
more amicable than Lionel's relationship with MTH. Lionel has licensed TMCC to K-Line, and K-Line
produces a number of repair manuals for postwar-era Lionel. K-Line has also produced commemorative
cars celebrating some of Lionel's significant anniversaries, which has sometimes caused confusion
among collectors.
Lionel is continuing a limited run of K-Line trains called
K-Line by Lionel. Missing are the extravagant passenger trains which competed directly with Lionel's
premium products. In a twist of fate, Lionel now has possession of the rights to produce American Flyer
track, which until now was missing from its American Flyer train line.
Link to K-Line by Lionel Web Site.
