Talking Toys: Lionel trains find a niche in the 21st century

By the end of the ’60s Lionel trains were no longer the powerhouses they once were in the late 1940s and ’50s.

After selling the tooling and licensing the name to Model Products Corp. (MPC), a division of General Mills, in 1969, things looked bleak for Lionel as a new decade dawned. But Lionel would eventually undergo a revival of its trains, with innovative technologies undreamed of during the early years. In the third and final part of our series on Lionel Trains, we look at the years 1970-present, known as the “modern years.”

Not long after taking over the Lionel trains line, MPC changed to Fundamensions. The MPC logo was soon removed from the side of the trains, though General Mills remained the owner. Lionel train production was rather small in the early 1970s, with Fundamensions using the traditional Lionel designs and color schemes. Many of the operating accessories were reissues or new designs of the postwar products. But Fundamensions’ biggest strength was its experience with toys and plastics, and as the years went by, Fundamensions greatly improved Lionel trains with new cars, engines, and accessories. By the late ’70s, the quantity of Lionel trains produced almost equaled the number produced during Lionel’s heyday in the ’50s.

By the early 1980s, however, Lionel saw sales declines once again thanks in part to the recession hitting the country at the time. In 1985, Fundamensions was consolidated into General Mills’ new Kenner-Parker Toys division. But the consolidation did nothing for the Lionel line, as the trains continued to shrink in production.

In 1986, Lionel was sold to Detroit real estate developer Richard Kughn. A passionate train collector himself, Kughn had the advantage of bringing to the table great knowledge of the costumer base and their point of view, and changes were made to Lionel almost immediately.

Kughn changed the name of the company to Lionel Trains, Inc., making the company an independent toy train manufacturer. In an effort to improve the quality and diversity of the trains produced, there were some changes made in the production line, such as semi-scale models and prewar reissues. The release of these trains were met with mixed results, and by 1991-92, they were eliminated from the Lionel line.

But there were other changes to the line that were met with much greater satisfaction among customers. Lionel trains soon had two operating couplers and solid steel wheel sets. Selection and quality were also greatly increased. Lionel Trains, Inc. took advantage of the latest electronics by including revolutionary systems like Railscope, RailSounds, RailSounds II, electronic e-units, and the Trainmaster control system, which was developed by Rock ‘n’ Roll legend Neil Young.

The company also produced contemporary locomotives and cars, such as Intermodal Cranes, Dash 40s, and TTUX. More often than not these new releases were based on ’50s or ’60s prototypes. In 1993, Kughn purchased the Lionel name outright when the original Lionel Corp. was liquidated, ending a 24-year run of paying licensing fees and royalties.

In 1995, Kughn sold the majority of his interest in Lionel Trains, Inc. Neil Young purchased 20 percent of the company. Any by September 1995 Wellspring Associates, led by former Paramount chairman Martin Davis, bought the remaining business and the trademarks of the original Lionel Corp. The new company was named Lionel Limited Liability Corp. (Lionel, LLC). One of the main goals of the company right off the bat was to increase marketing toward the general population as opposed to only the toy train market. Their intention was also to give the catalogs a nostalgic treatment by using artwork and a horizontal format used in the 1950s.

Over the years the company has retooled some of the traditional Lionel locomotives to give them a more realistic look in an effort to compete with contemporary toy train manufacturers like MTH. In recent years, MTH has developed a large line of imported, well-detailed, and reliable locomotives and cars. Occasionally, MTH has openly taunted Lionel in product-to-product comparison ads, a practice Lionel ironically made famous in the early years under the leadership of founder Joshua Lionel Cowan.

Since their humble debut as store displays in 1900, Lionel trains have seen many ups and downs. And through it all, Lionel trains have managed to survive well into the new century. There are not many toys that can boast having an existence of 110 years like Lionel. There’s no question Lionel trains are pop culture icons like Mickey Mouse or Superman. They are a part of Americana like baseball, apple pie, and ham and cheese sandwiches.

Ask any Lionel collector, and they’ll tell you there’s nothing like holding a Lionel train in their hands. Having such a piece in hand takes the collector on a nostalgic trip back to their youth, conjuring up memories of Christmases past, excitingly opening the present that contained the latest Lionel release. And that, my friends, is what collecting Lionel trains is all about. ?

Justin Moen is a collector of 1:18-scale die-cast cars, 1:16-scale die-cast farm tractors, and Hot Wheels. He has edited more than 25 titles for Krause Publications. He may be reached at

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