American Flyer's History

The A.C. Gilbert Company's Demise

The A.C. Gilbert company manufactured American Flyer trains until 1967, when the company declared bankruptcy. There are many speculations as to why they closed, such as A.C. retiring and leaving his son to run the company who wasn't quite as committed to the company as his father was, or that the kids from the 1930s, 40s, and 50s were growing up and had no time for model trains anymore (this was probably the largest contributor, considering Lionel declared bankruptcy in 1969), or that the company had financially over-extended itself. Either way, the company closed in 1967, and that left no major manufacturer producing S-scale products.

History: Lionel Takes Over

Arch-rival Lionel bought the American Flyer name and most of the product line in 1967. However, as a sign of the times, Lionel itself subsequently declared bankruptcy in 1969.

General Mills

General Mills, the company best known for making breakfast cereals, bought the Lionel product line in 1969, but not the corporation itself. The sale included the American Flyer brand name. In 1979 General Mills, under the name Fundimensions Division, based in Mt. Clemens, Michigan, resurrected the American Flyer product line, with little success. You can identify these models by looking at the label at the bottom of the models, which will state "Lionel/Fundimensions". In the meantime the "Lionel Corporation" continued as a holding company for a variety of toy stores around the country and wasn't really involved in toy trains anymore. In 1993 that Lionel Corporation went out of business.

Lionel Returns

In 1985 Lionel Trains, Inc, owned by the late Richard Kughn and an entirely different corporation from the original Lionel Corporation, bought the brand name and product line from General Mills. This included the American Flyer brand. In 1994 famous musician and part owner in the company, Neil Young, invented, and still holds some patents related to, Lionel's TMCC system (their version of digital command control, DCC). In 1995 Richard Kughn sold his interest in the corporation to the Martin Davis Investment Group (later called Wellspring Capital Management), and that group renamed "Lionel Trains, Inc" to "Lionel, LLC". This company is the one that currently produces Lionel and American Flyer products.

Lionel's main business is O-scale trains, but they are now also actively producing both re-issues and newly-tooled engines, cars, and accessories under the American Flyer name for S-scale. Their products are backward-compatible with original American Flyer track, but they are also starting to make some of their models more true-to-scale.

Lionel, LLC filed for bankruptcy protection in 2004 due to them loosing a lawsuit filed by M.T.H. Electric Trains. Apparently, the Korean manufacturer for MTH's products was using some of MTH's designs and perhaps even molds to produce Lionel's products. The judgment against Lionel was more than they had, so Guggenheim Capital Management funded them and became a major stakeholder in the company. This also ended Neil Young's investment in the company, although he remains a consultant to the company. Lionel, LLC came out of bankruptcy in 2008.

Resources

• Eli Whitney Museum And Workshop (Gilbert catalogs, etc.)
• Gilbert Hall of Science in Chicago
• A.C. Gilbert Heritage Society (stop-motion animation)
• American Flyer promotional video
• American Flyer Boys Railroad Club #1
• American Flyer Boys Railroad Club #2
• American Flyer Boys Railroad Club #3
• American Flyer Boys Railroad Club #4
• American Flyer Boys Railroad Club #5
• American Flyer Boys Railroad Club #6
• American Flyer Train in 1950s Western Movie