History Of Lionel Trains

Based in Manhattan, the history of Lionel Trains began when they first started production of their electric trains in 1901, and production continued at various locations, in and around the New York area, right up until 1941 when the factory was converted to the production of war materials for World War II. Lionel's first ever train was an open-topped carriage called Electric Express and this was powered by an electric fan motor.

The history of Lionel trains has seen the company suffer mixed fortunes and the prewar years were no different for Lionel, the 1920's saw hugely extravagant trains being built to meet an insatiable demand, but at the start of the following decade, the company had posted a loss of over $200,000 and went into receivership for the first time. Prewar Lionel Trains are still some of the most sought after by collectors.

By the mid-30's Lionel's were back in profit after the introduction of several new models including the Mickey & Minnie Mouse hand cars, of which they sold over 250,000 models. The success of the hand cars was so great that the company could never keep up with demand, but by 1934 the company was out of receivership and back in profit.

As the war drew to a close, Lionel's began to plan the resumption of train production, and in 1945 they produced a small but popular set that featured smoke production. Post war and up until the early 1950's, Lionel produced not only trains, but a huge range of locomotive accessories such as crossing gates, street lights, coal, logs and towers.

Towards the end of the 1950's, the recession and other factors conspired to create a huge decline in the market for Lionel Trains. The market had changed significantly since the beginning of the century, and children had moved on to other toys such as model cars.

By the end of the decade the company was posting record losses, and was over $1 million dollars in debt. Things went from bad to worse during the 1960's with the company losing millions of dollars, which resulted in the sale of all the train making equipment and the train making rights by the end of the decade.

The history of Lionel Trains stumbles on until the early 1990's, when the company went into bankruptcy again and was finally dissolved.

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Update
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It seems the phoenix has risen again - this statement was issued by the present owners of Lionel Trains on May 1st 2008.

"Today, May 1, 2008, marks the end of one of the most dramatic and difficult periods in Lionel’s 108 year history. After more than seven long years of legal warfare, a brutal financial restructuring, and a lot of corporate soul searching, Lionel has fully emerged from bankruptcy.
 

In addition to the settlement with MTH, Lionel’s emergence from bankruptcy has been achieved by paying all of its creditors all of the money they were owed, in addition to interest for all the time during which the company was in bankruptcy. As some of you might know, this is an extremely rare and beneficial outcome for creditors. This great result came at a high cost to Lionel’s pre-bankruptcy owners: Luella Davis, Neil Young, and Dick Kughn. It’s extremely gratifying that all of them will remain involved with the company, along with our new partners at Guggenheim Investment Management LLC, who provided much of the new money necessary for Lionel’s successful exit from bankruptcy."