MTH Electric Trains

Lore & Background

MTH's founder, Mike Wolf, started assembling and selling trains at age 12 in 1973 for Williams Electric Trains. By 1980, he operated a mail order business selling Williams trains and parts from his bedroom. When Williams ended its line of Lionel reproductions, Wolf bought the tooling and continued building replicas. From 1983 to 1987, MTH marketed these reproductions independently. In 1987, Lionel approached MTH's South Korean subcontractor Samhongsa, leading to MTH becoming a Lionel subcontractor. By the early 1990s, MTH was the second-largest mail-order Lionel dealer in the country.

The relationship with Lionel ended in April 1993 when MTH decided to market its own O scale model of the GE Dash 8 diesel locomotive after Lionel declined the offer. Lionel canceled MTH's dealership, and MTH filed an antitrust suit settled out of court in 1995. MTH then expanded its product line and by 1998 became the largest O gauge manufacturer. MTH and Lionel developed a rivalry similar to that between Lionel and Ives in the 1930s. MTH uses a proprietary Digital Command System (DCS) that can also operate engines using Lionel's TMCC and the open DCC standard.

MTH also produced New York City Subway cars licensed by the MTA and Chicago 'L' cars. The MTA license later transferred to Lionel and Walthers, partly due to MTH producing sets covered in graffiti. MTH traded lawsuits with Quantum Sound Industries and faced criticism for patenting elements of DCC. In 2005, Union Pacific sued MTH for trademark infringement; the case was settled amicably in 2006, leading UP to change its licensing program to a royalty-free perpetual license for model railroad manufacturers. In late 2007, Lionel and MTH settled their long-term fight over trade secrets, with a court-approved settlement in March 2008. From 2009 to 2019, MTH produced tinplate trains under the Lionel Corporation banner. In June 2020, CEO Mike Wolf announced his retirement; the company initially planned to shut down but relocated to Elkridge, MD and continues production. In January 2021, ScaleTrains.com acquired MTH's HO and S scale tooling.

Reader's Guide

MTH Electric Trains significantly reshaped the O gauge model railroad market. By the late 1990s, it had overtaken Lionel in market share, a feat that underscored its impact on an industry long dominated by a single manufacturer. MTH is widely credited with bringing innovations into a hobby that had changed very little since the 1950s, as well as lowering prices. Its aggressive marketing and legal tactics, however, drew criticism from some hobbyists and Lionel collectors, who felt that MTH's reproductions lowered the market value of vintage Lionel equipment. The company's legal battles with Lionel—including a $40.8 million jury award later overturned—highlighted the intense competition and intellectual property disputes in the model train industry. MTH's development of the Digital Command System (DCS) provided an alternative control system that could interoperate with other standards, reflecting its role in advancing model train technology. The Union Pacific trademark settlement, which resulted in a royalty-free perpetual license for all model railroad manufacturers, was a landmark change for the industry. MTH's later collaboration with Lionel to produce official Lionel tinplate trains from 2009 to 2019 demonstrated a temporary rapprochement between the two rivals. Despite its reduced scale after 2020, MTH remains a notable force in O gauge production.

Did You Know?

• MTH was founded as a mail order business operating out of Mike Wolf's bedroom in his parents' home.
• In 1998, MTH became the largest manufacturer of O gauge trains, with sales of about $60 million compared to Lionel's $50 million.
• MTH's Digital Command System (DCS) can operate MTH engines as well as those using Lionel's TMCC and the open DCC standard.
• The Union Pacific trademark lawsuit against MTH resulted in UP changing its licensing program to a royalty-free perpetual license for all model railroad manufacturers.

A Chameleon of Ownership

Lionel's corporate identity has shifted hands more times than most toy brands can claim. After the original Lionel Corporation filed for bankruptcy in 1967, the brand's product line was acquired by cereal giant General Mills in 1969, which operated it through its subsidiary Model Products Corporation starting in 1970. In 1986, Detroit real estate developer and railroad enthusiast Richard P. Kughn purchased the line and formed Lionel Trains, Inc. Then in 1995, the Marvin Davis Investment Group, operating as Wellspring, acquired the company and rebranded it as Lionel, LLC. Most recently, in 2026, Lionel, LLC merged with Round 2, LLC to create the combined entity Lionel Brands Group. Headquartered in Concord, North Carolina, the company's journey through multiple corporate parents reflects the turbulent life of a beloved American toy brand navigating the shifting landscape of the toy industry across more than half a century.

O Scale Dominance

By the time Lionel, LLC filed its reorganization papers as part of its bankruptcy plan in May 2007, the company's financial identity was almost entirely defined by a single product category. Approximately 95 percent of all sales came from O scale trains, with an estimated seventy million dollars in annual O scale revenue. Within that market, Lionel, LLC commanded roughly 60 percent of the total, solidifying its position as the largest manufacturer of O scale trains. This concentration made the company both a dominant force and a vulnerable one, its fortunes tightly bound to the health of one niche within the broader model railroad hobby. The O scale product line, which dates back to 1915 when the original Lionel Corporation first introduced it, had become the company's defining legacy and its primary economic engine for well over a century of continuous production.

The MPC Era and the Quality Question

When General Mills ran Lionel through its Model Products Corporation subsidiary from 1970 to 1985, the brand underwent significant product changes that remain debated among collectors to this day. Cost-cutting measures restored profitability but often at the expense of craftsmanship; metal components were increasingly replaced with molded plastic, and fine detail was sacrificed. Yet some MPC innovations proved lasting: needlepoint axles and Delrin trucks were introduced to reduce friction and enable longer train strings, changes still present in modern Lionel products. A 1973 experiment called Standard O attempted to scale cars to a true 1:48 proportion, but the effort failed due to the absence of matching locomotives and a caboose. Perhaps most controversially, in 1982 General Mills moved production to Mexico, sparking outrage from fans who had watched American-made trains for more than eighty years. Production returned to U.S. soil by 1984.

Beyond the Tracks: Lionel Racing

In late 2010, Lionel, LLC expanded well beyond its railroad roots by entering a joint venture with NASCAR Team Properties to produce diecast vehicles in both 1:24 and 1:64 scales. The partnership evolved in 2013 when Lionel acquired full ownership and rebranded the operation as Lionel Racing, which also began producing NHRA and ARCA diecast models. A significant milestone arrived in 2016 when Lionel Racing assumed distribution of the NASCAR Authentics line from Spin Master, a 1:64 diecast product line of NASCAR race cars sold inside major retail chains including Target, Walmart, Meijer, and Toys R Us. This diversification into motorsport collectibles represented a bold strategic pivot, leveraging Lionel's established brand recognition and retail distribution networks to compete in an entirely different collector market.