Mike Wolf to retire and close MTH

@NIKHIL posted:

 

So, overall, I am going to tell you this: We need MTH to keep going!!! Mr. Wolf has to retire, but ownership has to transfer from private to public ownership. Whatever the reasons, ever since MTH has entered the O gauge market, MTH has now become a major player and has given the competition a serious run for its money. What started off as a line of replicas of Standard and O gauge trains from the tinplate era has now blossomed into a vast offering of extremely well-made O gauge trains, track, structures, and other accessories.

So, let's stay tuned. In the meantime, let's keep the World's Greatest Hobby on track - and be optimistic about the future of Model Train hobby, as long as we continue to keep children involved or get kids into the hobby of Toy Trains (and possibly sign them up for the TCA Kids and Teens Clubs) - or continue to get more people involved in this hobby and recruit more people into TCA. All we have to do is to learn patience with children and toy trains.

So when are you making your offer? 

There are too many signs that says MTH is done.  The auction, the sale of the building, the silence from Maryland, and the lack of a heir apparent.  As Rich pointed out the financials have to be there and in the case of O gauge trains I doubt they are.  The best hope for MTH was Andy and Rich but I don't see them, after already being in the business almost as long as Mike, wanting to start a new chapter.

I do hope MTH goes on but the warm and fuzzies that you listed don't add up to $$ and cents.

What's going to happen with the website and access to all the manuals, sound files, etc.?

@Mallard4468 posted:

What's going to happen with the website and access to all the manuals, sound files, etc.?

Unfortunately there are a lot of unanswered questions that comes along with this.  If MTH does get another entity to take over customer service, parts, etc.,  I would imagine they would become the keeper of that information sans the DCS stuff which is supposed to be handled by another 3rd party company.  All of us are waiting for the smoke to clear to see what ends up where.

People need to accept MTH is gone.  But maybe as a result, Lionel will gain more customers and in turn have more development money for new engines or technology.  Yes, having no competition is never good, but you have to deal with reality, not dreams.

ALAS, 'tis true.

Burrowing an axiom from ancient times, and massaging a bit I think "the writing was on the wall" of MTH closing began when Lionel moved primary production overseas, 20 years ago. It took Lionel some years--the lawsuit undoubtedly extended the time--but eventually, and this is my two-cent opinion, Lionel's technology advancements in their Legacy and Vision Line items out-paced MTH's innovations in their Premier line and Lionel's aggressive licensing broadened their market base such that the Lionel name made a resurgence of titanic proportions.

Yet, IMO the single most important factor in Lionel winning the final battle of the titans was the Lionel name, which is gold in worldwide sales and marketing and which Mike Wolf could never completely overcome (although he gave it a sincere effort and was able to market Tinplate trains under Lionel Corporation). In addition, there are some people, young and old, who cherish the Lionel name and the orange and blue boxes, and they don't even consider anything else, which of course is brand bias, but nevertheless represents a critical portion of market share. That level of brand loyalty is priceless to a company's owners (Harley Davidson has it, too).  

In actuality, MTH had some superior aspects in both their Premier and Railking Lines, too many to list, but apparently they weren't enough to warrant MTH being a profitable company such that Mike Wolf could've sold the whole kit and caboodle. If the "price is right", I predict Lionel will buy the tools and dyes to the Premier Line; there's just too many outstanding models, especially in the steam category, that have superbly engineered chassis and highly detailed superstructures (many with rounded boilers on their undersides  

I feel for the long-time staff who will be out of job, some of them have quite a few years working for MTH. Brand bias aside, it is a sad time for the hobby, not just for the lack of variety, but for the loss of a significant contributor in the O-gauge community. I've endeavored to make DCS and Legacy work on my layout, and the fun of operating trains has been enriched by both systems and both companies products.  

@Paul Kallus posted:

Burrowing an axiom from ancient times, and massaging a bit I think "the writing was on the wall" of MTH closing began when Lionel moved primary production overseas, 20 years ago.

 

You do know that Mike Wolf was originally a sub-contractor for Lionel arranging for Korean production of some of Lionel's O Scale...

Rusty

@Bill T posted:

...I have MTH locos going all the way back to the very early PS-1 era, have not had to replace the electronics or convert to unpowered yet.

Same for me.

MELGAR

I guess I shouldn’t be surprised this thread has flared back to life although I was more expecting it to occur next spring.

Here is a mental health suggestion; unless you or your closest friends and associates have perhaps $30-40 million to buy the tooling and whatever other MTH assets exist - there’s nothing you can do about this. Zip. Nada. Quit worrying about it.

And for anyone thinking the exit of MTH will somehow make Lionel “better”  - C’mon man! 🙄

Now; go to your basement or train room and run and enjoy the trains you have!

Curt

I was a die-hard Lionel-all-the-way guy up until fairly recently (save for rolling stock and accessories which of course work universally), but I've since invested in numerous PS3 locomotives.  For me, while Lionel I think beats out MTH in some ways (speed control, chuffing sound, quilling whistle, whistle smoke for a few), MTH beats out Lionel in a few key metrics:

- The ability to swap out sound files and even build custom ones to load (albeit with aftermarket software)

- The consistent addition of the drop plate between the loco and tender

- The ability to change the drawbar and make a closer engine/tender coupling

- Protosmoke: the chuffing and sheer volume just beats Lionel imo, and the load-dependent volume on diesels really wins the day

- Protocouplers: They're reliable and quiet and couple easily.  Electrocouplers always sound like I'm electrocuting something.

- While it varies from model-to-model, I think MTH Premier consistently puts just a hair more detail into their models than Lionel, as a whole.  MTH uses thinner wire on their steam engines, which makes them look a little less toy-like and a little more scale model-like.  (And if you're complaining about it being too thin and breakable, buy RailKing)

I, for one, will really miss MTH and all the advancements they brought to the hobby.  My hope is that, perhaps with their departure, some of these technologies and tooling could be up for grabs for Lionel and other model-makers.  But I guess we'll see!  At the end of the day, as devoted as many of us are to MTH, Mike Wolf doesn't owe us anything except for the remainder of the warranty on the models we purchase this year.  If he wants to retire, so be it and good for him.

Woody, you missed MTH has much better crew talk. "OVER"

@Dave Zucal posted:

Woody, you missed MTH has much better crew talk. "OVER"

Oh my God yes!!! 👍

Curt

Back in the 60'sand 70's Firestone tire co.Management decided to bankrupt the company. After getting some major concession from the union in the area of health and welfare, and retirement contributions by the rank and file, management secretly gave themselves some huge bonuses. Well now the WAR was on. Meanwhile 3 or 4 distributors got together and made a 3rd party purchase of a closed Firestone factory . They hired back the skilled workers who had been laid off and went back into production,with a quality product. The name of the new company is Hercules Tire .The rest is history. I think the same should be done today with MTH!

Wow. 

@fastman posted:

...The rest is history. I think the same should be done today with MTH!

But...the numbers STILL have to work!

I agree with MTH advantages but that's because I only have 2 modern (post 1990) Lionel Engines.  For me, I like the wide variety of MTH road names, subways, and specialty sets like the North Shore Line and Metra.  The problem has been for me, when you picked your command system, you pretty felt like you ought to stick with that manufacturer.  My LHS gave me that advice a long time ago.  I chose DCS.  I may now add Legacy.  But if DCS is going to die, wouldn't it be in Lionel's interest to modify Legacy to accommodate DCS engines (buying the rights to?) to get us to convert?  If they did that, it would be easier to justify buying Legacy and then adding Lionel's engines to my stock in the future.

Why don't MTH people chime in on this column?  If MTH was truly on a death spiral, what do they have to lose?  Inquiring train nut minds here need to know.  Also, I have spent more money on MTH products since the announcement than ever!  This week I am picking up an extra remote and TIU for insurance.  Yikes!  Cha-ching!  Fortunately I picked up some extra money from an inheritance (Thanks, Dad!).  That closing announcement might play into their end strategy to maximize sales before closing, or before transferring to new ownership in some form.  Some hobby shops are holding out hope and a few have told me they believe MTH will continue in some form.  

@IRON HORSE posted:

But if DCS is going to die, wouldn't it be in Lionel's interest to modify Legacy to accommodate DCS engines (buying the rights to?) to get us to convert?  If they did that, it would be easier to justify buying Legacy and then adding Lionel's engines to my stock in the future.

 

I always thought Lionel was lucky to have DCS operate Legacy engines.  Why?  To do so you needed to buy a Legacy base (or TMCC), and a Legacy or TMCC engine.  Lionel couldn't lose on that setup.  They were selling engines and equipment to the DCS crowd without any overhead.

Now the same could be said about doing it the other way around but what is the investment into the added engineering to do so for Lionel?  If they do nothing and you need a new locomotive you'll most likely need to buy a Lionel engine and base.  Unless there is an incentive to make money I doubt Lionel will invest the effort, time, and money to make PS engine work via Legacy.  Just my opinion.

On a side note, there was always a rumor from many years back that there was a way to operate PS engines from a Legacy remote in command but due to legal complications it was never implemented and no one would ever confirm it.  Would love to know if that was truly the case. I would assume you, as in MTH's case with a Lionel command base, would still need a TIU but only the Doctor knows for sure.

Rich I love your contributions to this magazine and the innumerable contributions you have made. PERIOD. But the human spirit and desire to succeed cannot be diminished. I was running a mid-size trucking company in upstate N.Y. at this time and would not have given Firestone a snowballs chance of surviving. But Hercule's saved hundred's of blue collar jobs with that move. Bridge stone saw real value in the established distribution system and ditto there. This magazine could be a MAJOR contributor to that effort. A couple of weeks ago I went Digital on my subscription,and Alan Arnold CALLED ME on the phone and we had a great conversation. That man cares about his company and us. I'll take that all day long.

..."don't they know it's the end of the world...it ended when Mike Wolf said goodbye"...

No way! 

The hobby will continue to strive even if MTH shuts it's doors forever.  Just look at the history of model railroading from it's meager beginnings from wind up toys to today's high tech computerized trains with minute detail that the hobby hasn't ever experienced before.  True, they come with a price, however the market still offers Nice Price affordable O gauge trains for those who just want to play train for the enjoyment it brings for any number of reasons.

Regardless, one thing remains a fact.  O Gauge Railroading with it's staff of professionals will be here to report the very best news and to share your dreams when you submit articals and photographs of your layout for all members of the OGR family to enjoy.  For without you, OGR would close it's doors just like so many manufacturers of model trains as well as several model magazines that lost their readership for failing to maintain the high standards that OGR does.  However, if OGR is to survive these turbulant times, it needs everyone of us to do more than just sign up for the fourm, which doesn't require any fee whatsoever.

Please consider taking out a Digital Subscription and becoming a Supporting Member to insure that OGR will not only be here for you to enjoy today, but so your children and their children's children will also be able to share in The World's Greatest O Gauge Railroading Magazine for generations to come.  Believe me when I say that doing both is the best investment I made in 2020!  You can loose your caboose on Wall Street, but with a OGR DS and SM you'll reap dividends beyond your wildest dreams!

Happy Rails to you!

Godspeed

Joseph Toth Jr. 

Please Pray for World Peace.  We owe it to our children and their children's children.  They deserve no less!

I think if we had the firmware/xilinx bitfile on the PS3 board/TIU/Remote available and opened up (like open source) and whatever software tool makes the sound file format.... we could probably hobble along and just design whatever we needed as we go. Without those items it's lights out though.

@Rich Melvin posted:

But...the numbers STILL have to work!

Ain't that the truth.  That's a universal truth in business.  No bank lends money if the numbers do not work.  I'm sure MTH's situation is complex because they have an established brand, intellectual properties, patents, and then you have tangible assets, many of which appear to be being sold now.  A lender and buyer might have their hands full in evaluating that, not to mention the production is done in China.  Plus, Mike Wolf's hard work is probably worth a lot more in his mind than what a buyer may be willing to pay.  

In my make believe train world, MTH is still running fine, though.

@Rich Melvin posted:

The numbers have to work. But the numbers may not work for a lot of reasons:

• Asking price too high?
• Business valuation too high?
• Do the financials show declining revenue over the last few years?
• Production logistic issues = high costs?
• Personnel issues?
• Licensing issues?

The bottom line? If the numbers don't work, there is no viable business here.

This is no different than our personal take on big ticket items ie house or vehicle.   Will a "McMansion" work for me or just a two bedroom  house?  Will the huge SVU be workable for family compared to a Prius?  Its really what Return On Investment that works for you, or in MTH case, potential buyer willing to risk their capital.

@Mallard4468 posted:

What's going to happen with the website and access to all the manuals, sound files, etc.?

I'm in the process of archiving the enter site, Manuals, Sound files, Upgrade Sound Files, Firmware, and parts diagrams. It's a bit tedious but the website "scraper" tools help a lot.

@MartyE posted:

On a side note, there was always a rumor from many years back that there was a way to operate PS engines from a Legacy remote in command but due to legal complications it was never implemented and no one would ever confirm it.  Would love to know if that was truly the case. I would assume you, as in MTH's case with a Lionel command base, would still need a TIU but only the Doctor knows for sure.

Marty,

Don't know if you have already seen this on another thread, but the Lionel  6-37146 Legacy PowerMaster  in conventional mode with a Legacy remote has a subset of PS2/PS3 macro commands documented in the PowerMaster owner's manual. I use the PowerMaster with an American Flyer transformer and Legacy base/remote to operate MTH S Gauge engines(PS3). This command set is incomplete as documented, but I suspect there are more commands available!

Mike

@Flyer 52 posted:

Marty,

Don't know if you have already seen this on another thread, but the Lionel  6-37146 Legacy PowerMaster  in conventional mode with a Legacy remote has a subset of PS2/PS3 macro commands documented in the PowerMaster owner's manual. I use the PowerMaster with an American Flyer transformer and Legacy base/remote to operate MTH S Gauge engines(PS3). This command set is incomplete as documented, but I suspect there are more commands available!

Mike

The Legacy Powermaster just has the appropriate conventional operation whistle/bell commands programed in, that's all. It's not operating PS2/PS3 locomotives in command mode. 

@Lou1985 posted:

The Legacy Powermaster just has the appropriate conventional operation whistle/bell commands programed in, that's all. It's not operating PS2/PS3 locomotives in command mode. 

Of course it's not in command mode.  However, there's a lot more than whistle/bell commands.  Page 20 of the Legacy PowerMaster User's Guide...

@gunrunnerjohn posted:

Of course it's not in command mode.  However, there's a lot more than whistle/bell commands.  Page 20 of the Legacy PowerMaster User's Guide...

 

The Powermaster is just programmed to issue the whistle/bell commands from the conventional operation instructions . One touch operation instead of having do press the whistle/bell buttons manually. 

Right, but the net result is you have a convenient way to access many of the features of the PS2/3 locomotives, the object of the exercise.  You made it sound like you just got the whistle and bell, not really true.

Endless speculations without any facts.

It sounds like this thread is morphing into how to control PS2/3 locomotives with Lionel Legacy. It could be an interesting thread but the topic here is "Mike Wolf is retiring" and even though I don't have a dog in the fight I found some of the posts so far fascinating. At least the ones on topic. I would hate to see it be closed out. 

Agreed ! Can we (Gunrunner, Marty and others), start a new post with this info - Controlling MTH Trains in Legacy Environment ? I've got several MTH engines PS2 and PS3 and operate with TMCC/Legacy control. Trying to avoid the duplication and headaches of adding DCS on top.

Kyle 

@IRON HORSE posted:

Ain't that the truth.  That's a universal truth in business.  No bank lends money if the numbers do not work.  I'm sure MTH's situation is complex because they have an established brand, intellectual properties, patents, and then you have tangible assets, many of which appear to be being sold now.  A lender and buyer might have their hands full in evaluating that, not to mention the production is done in China.  Plus, Mike Wolf's hard work is probably worth a lot more in his mind than what a buyer may be willing to pay.  

In my make believe train world, MTH is still running fine, though.

Let's tackle this from two fronts.  The post by Iron Horse isn't quite true.  Banks were forced to lend money to home owners by the Clinton Administration but as that makes this a political post, we'll ignore the facts.  I am sure he is referring to normal business loans.

Secondly, I doubt if anyone in this forum(other than Mr. Wolf himself) knows the corporate structure and relationship of his (what could be) corporations or his personal balance sheet.  For example, did MTH Trains own the building in Columbia and was leasing the land for thirty or fifty years from MW Limited?  Did MTH Trains lease the building and land from Mike Wolf Holdings?  What depreciation schedule was being used?  Were payments made ahead of time or were they in arrears?  Disregard the toy train aspect, look at it as a building, land and investment venture.  Mike Wolf is a pretty sharp guy with I feel certain a competent staff to advise him.  

John

@rattler21 posted:

Let's tackle this from two fronts.  The post by Iron Horse isn't quite true.  Banks were forced to lend money to home owners by the Clinton Administration but as that makes this a political post, we'll ignore the facts.  I am sure he is referring to normal business loans.

Secondly, I doubt if anyone in this forum(other than Mr. Wolf himself) knows the corporate structure and relationship of his (what could be) corporations or his personal balance sheet.  For example, did MTH Trains own the building in Columbia and was leasing the land for thirty or fifty years from MW Limited?  Did MTH Trains lease the building and land from Mike Wolf Holdings?  What depreciation schedule was being used?  Were payments made ahead of time or were they in arrears?  Disregard the toy train aspect, look at it as a building, land and investment venture.  Mike Wolf is a pretty sharp guy with I feel certain a competent staff to advise him.  

John

I was only referring to business loans in general -- I doubt handouts were at play from the government unless MTH got a TIF loan for creating jobs which isn't a direct handout.  Assets plus blue sky (what the name is worth) = MTH's value.  Without their financials none of us know.  It's private company.  We know he sold his property.

As Melvin stated perfectly:  The numbers have to make sense to a buyer.  Period.  That includes market potential for model trains moving forward.  Here's to hoping the numbers make sense.  Cheers!

@rattler21 posted:

 

Secondly, I doubt if anyone in this forum(other than Mr. Wolf himself) knows the corporate structure and relationship of his (what could be) corporations or his personal balance sheet. 

John

Exactly! 

We can speculate and pontificate all we want, but Mike Wolf's gonna do what Mike Wolf's gonna do.  He will be the one making the final decision and we have exactly zero input.

Rusty

Part of the "numbers making sense" in the sale was/is the cost of the real estate, and unfortunately the MTH facility in Columbia, MD, which Mike Wolf owned, has become, from what I learned recently, a very expensive area. Perhaps that is good for Mike in selling and making money, but a hinderance in someone wanting to buy and continue its present use. 

As I am going through refinancing currently, I've also learned that burrowing money has never so advantageous due to record low interest rates (the lower the interest rate the better chance a good accountant can make "the numbers work"). Unfortunately, starting a business in a pandemic is risky, although there are some businesses doing very well. On the flip-side however, I believe that if it was the present owners of Lionel wanting to retire or sell, the Lionel name is of such notable recognition that multiple buyers would lining up ready to bid regardless of the pandemic.

I am still holding out an inkling of hope that someone will buy the tools and dyes, patents, and continue the Premier and Railking lines under a new name, although it would be in a different facility.

@Paul Kallus posted:

Part of the "numbers making sense" in the sale was/is the cost of the real estate, and unfortunately the MTH facility in Columbia, MD, which Mike Wolf owned, has become, from what I learned recently, a very expensive area. Perhaps that is good for Mike in selling and making money, but a hinderance in someone wanting to buy and continue its present use. 

The MTH facility (7020 Columbia Gateway Dr., Columbia, MD 21046) was sold last April. I don't know when MTH has to be out.

"The property had been on and off the market for years with competing real estate agencies and was previously marketed as an office/flex building given the park’s tenant base."

We need to start a simple poll with about 5-6 outcomes to choose from. 

Where is the popcorn emoticon when you need it?   

@GG1 4877 posted:

Where is the popcorn emoticon when you need it?   

I was thinking more along the lines of a regurgitate and beat the dead horse emoticon. 

I'm sure Railking/MTH tooling will live on in some way shape or form. If not as one company maybe spread out through the industry. The big question is if whoever acquires the tooling will continue to use the DCS platform or go with something else.

If MTH does not survive as a whole, I think the best option would be for someone to purchase the Railking line.  Railking produces some very nice semi scale models that are affordable, for people that prefer grater detail then available in some starter sets.  If Railking were to survive and use its current operating system, then DCS would have a sustainable market for its electronics.  Otherwise, I don't see a very bright future for DCS.

I don't think there's much value in the premier line, as Lionel, 3rd Rail and Atlas already produce models with detail that is equal to or greater them Premier.  This includes rolling stock as the above manufactures also make nicely detailed cars.  There are exceptions of course the European models being one that are still in demand and would fit in well with Lionel or 3rd Rail offerings.

But as Rich Melvin states "The bottom line is if the numbers don't work, there is no viable business".

I have a number of MTH products and would hate to see them completely gone, but in the end it's up to Mike Wolf.  Is he willing to negotiate a reasonable price for the company?, Would he be willing to sell it off in parts?, Is he willing to sell off the tooling? Would he want to company to go on without him?

Remember, MTH has its fingers in a lot of different pies, aside from the O gauge offerings, there's Tinplate, Gage One, S Helper, HO and all the building and accessories. One would think that someone would want at least some of this, maybe operating on DCC instead of DCS. 

Only time will tell.

24 pages of gossip and conjecture about this subject.  And it isn't going to change anything.  Seems like it would be time to move on.

OUCH!  My right knee is in severe pain, after having slapped it violently for hours upon hours as a result of laughing my caboose off at all the idle speculation that's been posted since it was announced that Mike Wolf is retiring, thus putting the MTH product line in jeopardy. 

Guys, it's time to return to the real world.  If you have locomotives, equipment, structures, whatever, you want to see produced then you've come to the right place.  Don't think for a minute that the manufacturers, that's made up of O Gauge Railroading advertisers and those who don't, keep a sharp eye out on the OGR Forum so they can receive as much feedback as possible from you guys in order evaluate which product(s) will make a smart investment before producing any of them in the first place?  Of course they do!

Manufactures are in business to make a profit, not to make modelers happy, by releasing their favorite locomotive that may also include their hometown railroad.  It just doesn't work that way.  This is the reason why operating socities and clubs alike will propose to release a popular roadname which hasn't been announced by a manufacturer make their own announcment in newsletters before proposing a specific model and/or roadname, but require X number of prepaid orders beforehand.  They aren't in a position to make such a committment themselves on sheer speculation and send in an order to a manufacturer without proper financing by the members, thus consulting with them to see the feasability of having a model produced in the first place. 

As a rule, manufacturers probably demand that X number of units be guarenteed and prepaid before they will set up production to begin with, however I stand to becorrected by the Legal Eagle Department!

It's apparently still too soon to know the final results what Mike Wolf and MTH have proposed to do in regards to liquidating the remaining inventory and the future of the businees in general.  I'm certain that the employees have been informed but are held to secrecy due to legal matters.  The thing to do now is remain calm and await the announcement which you can be sure will be released as soon as it's made final to the OGR staff as Breaking News!

Happy Rails to You!

OK....this thread has pretty much gone off track enough times that it should have been either closed or deleted a long time ago.  Plenty of speculation here based on nothing other than "opinion" rather than pure facts.  As has been said above, the horse has been beaten to death!  In fact, it has been been beaten so much that it is unrecognizable!  This topic is closed and any future attempts to resurrect it by starting a new thread will result in that thread being deleted.  Use your time to enjoy the hobby and don't sweat over details that take away from that enjoyment.