Thinking more about this I think trying to predict the death of MTH or the industry from a single data point is fruitless. Lionel and Atlas bought "only" 20% of MTH tooling? Could be that represented what fit their business model. Lionel isn't going to buy engines or cars that match their existing product, Atlas already is limited (they don't do steam, for example).
Of course there are financial considerations, and that to me looking back tells me that a lot of this was decided a long time ago and there was a plan (Mike isn't Russian as far as I know, but kind of reminds me of the admiral in 'The Hunt For Red October' "Son, the Russians don't go to the bathroom without a plan"). In retrospect:
1. The key to a lot of this is that he announced DCS was splitting off at the time of the original announcement, that they would support DCS/upgrade it. Thinking about it, the DCS group (yeah, I know, it is a couple of people or so),isn't going to go forward without knowing a revenue stream. Would you commit to buying a business when you didn't know if the prime customer was going to be operating or without knowing projected revenue? Simply supporting the existing base wouldn't be lucrative, replacement boards or people buying TIU/AIO components wouldn't generate much. Even being allowed to license it wouldn't do it, because they would have no way to know if anyone would license it.
Put it this way, if last year when Mike made his announcements everything was in the air, literally, the people taking over DCS wouldn't do it.
2. Given 1 above, then it is likely Mike when he had the announcement already had been talking to Lionel and Atlas and they already had at least a framework for an agreement, a handshake deal if you will. While Lionel would be unlikely to use DCS, Atlas would and of course Atlas would have the ability to license the dcs boards and use them. TMCC is an older, limited command control system, Lionel licenses it because quite frankly it doesn't compete with their products. MTH when a going concern never licensed DCS for the same reason. But if he had a vision of the future he could sell to the DCS group, where there was still MTH (but one that is maker of the trains only, not the command control system) and Atlas using DCS for both bought tooling and their own stuff, they would be willing.
3. The fact that Lionel and Atlas didn't buy MTH lock, stock and barrel is a good thing. If Mike was planning to shut down MTH, he would sell it for any price he could get as sole proprietor and Lionel could have bought the whole thing at a price they determined. That only 20% was sold off tells me that Mike wasn't willing to let it go for whatever.
4.But if 3 is true, why did MTH sell any tooling, if there were plans to move forward? Answer is in what we see today, those taking over the company didn't want to run the existing MTH, especially the repair portion of it. They wanted a stripped down MTH that would produce a limited range of products, likely what they saw as the most lucrative. So selling the tooling to Lionel and MTH made sense, as did closing the repair operation and the like. Again likely someone went over the numbers and figured out, to them, what would make sense.
5. But then why did some of the MTH only dealers close, anticipating this future? I can't answer that, since all this is speculation and inference. It could be they knew something of what was planned and figured in a BTO world, where shops contracted with MTH to build stuff, they couldn't surprise; could also be that MW shafted them, didn't tell them what was going on, and they thought likely MTH was no more (I suspect it was more the prior rather than the latter, but just my hunch).
6. Big thing to keep in mind is business deals take time, the reason this stuff is being announced relatively recently is it takes time to put together a deal. I never really thought Mike just decided to throw out a bombshell and a year later walk away, and the DCS deal should have rang bells in my head at the time. I suspect that before he made that announcement there were already advanced discussions, enough to make the DCS group want to go forward, that it was the details being worked out over the last year. In the big time business world it usually takes a year from the time the deal is announced until they sign on the bottom line, there is all kinds of diligence that need to be done, regulatory issues, deciding if some parts of the company need to be sold before it can happen, etc. Obviously MTH is small fry relatively, but again details take time.
So why didn't they announce all this last year? Likely because they had a framework of an agreement, a fluid one, and it is only now that the full parameters are in place. This happens in business too a lot. Once that framework was in place, Mike (again, this is just speculation, I have not 0 but negative inside knowledge of MTH) felt comfortable enough to announce to the customer base his intentions to retire.
Again, as many thought Mike announced his plans to retire with no deals other than DCS group done, and was letting the cards fall where they may, a lot of what has happened makes no sense. If Atlas and Lionel took this long to decide to buy tooling, they would have done it at fire sale prices; not to mention MTH 2.0 would need the year roughly from him announcing his intentions to now to figure out how they were going to operate, too once "MTH 1.0" ended.
Its amazing what just a "couple" of Lionel fans can stir up.
. For your sake and that of the MTH enthusiasts, I hope you are correct, but the facts on the ground don't look all that terrific for the continued long term existence of anything remotely recognizable as the MTH of the previous 25 years. Remember that Cassandra and Jeremiah turned out to be correct.
