@brianel_k-lineguy posted:Bill you say this quite frequently. I think it's worth pointing out that in the last few decades, Lionel is the only 3-rail train company considered worthy of purchase by an outside investment firm.
During the legal wranglings with Lionel, it was reported that an outside buyer was considering purchasing K-Line, but it fell through. Yeah, with the 5 million dollar preexisting debt K-Line had, no surprise that happened. And most of that debt was probably from doing too much expensive new scale product tooling without the necessary normal retail level sales to recover that investment in a satisfactory time frame.
Weaver tried to find a buyer to continue the company as was. That didn't happen so the tooling was split between Lionel and Atlas. S-Helper, though not 3-rail, was purchased by MTH, so as an independent company, it was no more. The UMD Industrial Rail tooling was purchased by Atlas, supposedly damaged along with the rest of their 0 scale tooling during the Sanda Kan upheaval, so who's what has happened to that tooling, who knows? It may not even exist anymore.
And there are other companies too. And then there's smaller niche companies and retailers, who have had to shut their doors because no one was interested in buying the business. Or because they didn't think they could make the investment back by purchasing the company.
And if anyone bothered to watch or pay attention to the TCA museum presentation videos, you would have heard Mike Wolf imply (around 6-7 years ago), that MTH was loosing money. What he said was that he had lots of ideas for new products, but every time he suggested one, Andy would tell him "you're going to put us deeper in the hole." That sounds to me like they weren't making money. And it would certainly explain the lack of new product tooling. And it might explain why no one has been interested thus far (as much as we know) in purchasing the company. What "savvy" investor wants to buy a company that is losing money, or performing marginally at best.
Look, I'm not knocking MTH here or any other firm. But there is a reality to being in business, and it means there has to be a profit made. Just as there is a reality to be a consumer: How many times have we seen threads about the best place to find for the lowest price on such-and-such a product? Sorry, there are a good many train buyers who are bean counters too. Or how about the folks buying Menards stuff (which is not without defects and quality problems) because it is priced so much lower.... welcome to the bean counter club
! And also worth stating again, Menards is NOT a train company: It is a home improvement chain that is contracting to have stuff made for them. They don't have any assets or tooling.
And Lionel has continued to do new product tooling, which is expensive. I wouldn't at all be surprised if Lionel recently spent $100K to retool the scale reefer car. How are they going to make that back? They should raise the list price on those at least 50%, but people are complaining now about scale product rolling stock prices that in many cases are only $15-$20 more than a traditional product. I laugh when I hear the complaint "$90 for a scale box car?" That happens to also be the price for a traditional one that has a licensed name on it.
Where is the new product tooling from Atlas 0 and MTH? (Yes, MTH did do the scale 44 ton switcher, and on average it takes 4-5 years just to recoup tooling investment costs... no profit til that happens).
Well I could say a lot more based on things I've heard inside the industry, but I'll say it again, just be thankful an outside firm saw fit to buy and continue Lionel as a company. I'm not defending everything Lionel does, as with the point of this thread. But there are a bunch of other companies who didn't have such good fortune to find a buyer.
I don't know many people that can afford $90.00 freight cars. I can't and wouldn't if i could. If that's the new normal than this hobby is doomed.
