Joshua Lionel Cowen, born August 25, 1877 in New York City, started his toy train enterprise in the late 1900â€™s. Lionel’s dominated the toy train market from day on and still does to this day. This was mainly due to Cowenâ€™s personality and engineering skills. Cowen also had excellent marketing skills for his trains. One of the major marketing tools used by Lionel was the color catalogs they produced annually .
Cowen came to toy trains almost by accident. At the age of 22, he had perfected a small electric motor, but had not found a practical use for it. The story is that Cowen was standing outside a shop window when he came up with the idea of a powered gondola to carry items to attract customers to the shop. Cowen rented a store front. He began manufacturing of these gondolas in early 1901. People soon became more interested in the gondolas than the items that were in them.
Early on Lionel trains ran on two-rail track with 2-7/8 inches in-between rails. In 1906, Cowen introduced a new three-rail track, 2 1/8″ gauge. The new track was known as “standard gauge”. This new track was the start of Lionel’s dominance of the toy train industry. Many manufacturers soon started to offer this track type under their own names.
By the end of World War One, the major manufacturers of toy trains were Ives, American Flyer, and Lionel. All three manufactured Standard Gauge as well as O gauge trains.
What further pushed Cowenâ€™s domination of the toy train industry were Cowen’s superior marketing skills. Cowen was the first to link toy trains to the Christmas season. Cowen had the idea to use toy trains as part of nursery school displays. Later, incredible showroom and department store displays would leave every young boy wanting toy trains for Christmas. Toy trains still remain popular Christmas gifts today.
By the 1920s Lionel was on top of the toy train world. It was during this period that Lionel produced some of their most beautiful trains. The locomotives and rolling stock were highly detailed. Ives and Flyer were also producing wonderful trains. This era is referred to as the “Golden Age of Toy Trains”. Financial troubles forced the sale of Ives in 1928, both Lionel and American Flyer purchased the Ives Company. The partnership was short lived, and in 1930 Lionel became the sole owner of Ives. Ives continued as a separate corporation, but was managed by Lionel. The merging of these companies resulted in the production of some very unusual trains under the Ives name. These interesting pieces are some of the most sought after items today.
During World War II the Lionel company stopped toy production and manufactured items for national defense like so many other companies at this time did. Lionel company made nautical items for the Navy.
In 1970, the Lionel name and tooling was purchased by cereal manufacturing firm, General Mills and became part of its Model Products Corporation (MPC). MPC did have some success with Lionel despite a disastrous move of the production to Mexico in 1983. Production returned to shortly after Michigan in 1985. At this time and the name and tooling was sold to Richard Kughn, a businessman and Lionel collector. Under Mr. Kughn, the company became known as Lionel Trains, Incorporated. Mr. Kughn re-established the original reputation for quality.
In September 1995, Mr. Richard Kughn sold the company to a group of investors called Wellspring Associates L.L.C. of New York. The group consists of Martin S. Davis, former chairman of Paramount Communications, Greg S. Feldman, managing partner, and Neil Young, rock musician and avid model train hobbyist. Young was involved for several years in a joint venture with Mr. Kughn to build remote controls that make it easier for handicapped people to use model trains .
Mr. Kughn remains a minor shareholder of the new company and assumed the title of chairman emeritus. The toy train company is now called Lionel L.L.C.