Large Scale Central

Can I get simple narrative of what happened to LGB?

General Discussion
#1

Is it possible for a newbie to get a simple, clear, snark-free narrative of what happened/is happening with LGB? One that doesn’t degenerate into six guys throwing cryptic insults at each other? I can never understand what the h-ll is going on in those LGB threads

I first got into G scale when my father in law gave my son an LGB starter set, sometime in the early 90s. I had no idea there was such a thing as G scale. Cool! Over the years he sent my son some more sets and I bought a little track here and there, set it up temporarily and took it down. LGB was the big dog, I noticed, and they seemed to have very high quality. Years pass, I have no involvement whatsoever in the hobby, and then two years ago decided to dust off those old starter sets and make a Christmas layout. We get bitten by the hobby bug, do some major looking/buying, and find out that LGB is in some kind of financial trouble, indeed has gone belly up.

So here’s what I’ve been able to piece together.

According to some guys I talked to at a hobby store, two younger members of the family owning LGB came into control of the company and made a bunch of bad decisions, including expanding the product line in wacky directions. They shifted some production to China.

LGB incurred too much debt from this expansion and went bankrupt, despite great customer loyalty. A negotiation for the rights to LGB’s name and tooling ensued, in which LGBoA–a licensee which had the right to distribute and do parts and repair for LGB in the US–lost out to Marklin. Marklin severed all ties to LGBoA and at this point has no plans to make product for the US market.

Is that the story, in basic form? Just yes or no would be great!

#2
mike omalley said:
Is it possible for a newbie to get a simple, clear, snark-free narrative of what happened/is happening with LGB? One that doesn't degenerate into six guys throwing cryptic insults at each other? I can never understand what the h-ll is going on in those LGB threads

I first got into G scale when my father in law gave my son an LGB starter set, sometime in the early 90s. I had no idea there was such a thing as G scale. Cool! Over the years he sent my son some more sets and I bought a little track here and there, set it up temporarily and took it down. LGB was the big dog, I noticed, and they seemed to have very high quality. Years pass, I have no involvement whatsoever in the hobby, and then two years ago decided to dust off those old starter sets and make a Christmas layout. We get bitten by the hobby bug, do some major looking/buying, and find out that LGB is in some kind of financial trouble, indeed has gone belly up.

So here’s what I’ve been able to piece together.

According to some guys I talked to at a hobby store, two younger members of the family owning LGB came into control of the company and made a bunch of bad decisions, including expanding the product line in wacky directions. They shifted some production to China.

LGB incurred too much debt from this expansion and went bankrupt, despite great customer loyalty. A negotiation for the rights to LGB’s name and tooling ensued, in which LGBoA–a licensee which had the right to distribute and do parts and repair for LGB in the US–lost out to Marklin. Marklin severed all ties to LGBoA and at this point has no plans to make product for the US market.

Is that the story, in basic form? Just yes or no would be great!


No, yes, maybe!

  1. item missing from your narrative: how much market share LGB lost in NA!

  2. how Märklin was awarded the remnants of EPL on the second go around.

Most of the detail you’ll find here on LSC. :wink:

#3

Mike Not getting into the specifics your anwser is YES at this point, but mabe not in the future.
Ed
And thanks for your support on the other forum!

#4

I’ve decided to just wait for the movie… :wink:

Paul

#5
Paul Lambert said:
I've decided to just wait for the movie... ;)

Paul


I’m waiting for the book … movies have a tendency to leave out some details, in this case the devil is in all the details! :wink:

#6

Personally I think the devil is on this website!

#7

Mike, I think you’ve got the basic gist of it. Yeah, there are a lot more details involved, some of them possibly quite “interesting”, but of little direct impact to the average hobbyist.

#8

Mike,
basically as you have it, although the manner in which LGBoA ‘received’ worldwide marketting rights to the brandname, is highly questioned as to its legality. EPL was at the point of insolvency and handed on a ‘valuable’ asset (without the consent of the banks determining its fate). This was the final act that drove the banks to close the company down. Apparently, under German law, any asset disposed of less than 90 days prior to claiming insolvency, automatically demands the return of that asset to the parent company, to be included in that company’s assets. This has yet to be tested in a courtroom along with the alleged worldwide distribution rights granted to LGBoA. It is not the fact that EPL failed but the manner in which it fails that irks many.

  Marklin has had no problem issuing worldwide distribution to countries outside of Germany (under the famous handshake deal,  EPL retained LGB distribution and naming rights inside Germany,  with LGBoA receiving those rights for worldwide distribution).  It would appear that rather than 'testing' those rights inside America,  Marklin has made a decision to simply 'starve' the continent of the product line.  Of course it may just be that production in Gyor, Hungary,  at this stage,  simply is unable to meet local (European) demand and thus on the surface may be construed as an attempt to limit any distribution to America.  Much to their relief,  LGBoA were very fortunate enough to receive container loads of the product line in 2006, just prior to EPL closing its doors.  It is this stock that has provided the range we see now on dealers' shelves,  alas at higher prices than one was able to obtain back in late 2006/early 2007.


  Of course the facts are just facts,  but the continuing 'discussion between the famed "RhB bullies' and the infamous 'ventilators' is the fun part of this whole fiasco.  Who is the hero and who the villain,  or is it just bravado or maybe just a bit of fun?  Whatever the motives,  it makes for good reading and does provide some light-hearted humour for those interested in the saga and does provoke the ire of those with no interest and yet it is the members with no interest,  that seem to provide the impetus for these threads to propogate.


   I feel that a tactic is being employed to allow the now 'shell' company,  to simply languish in obscurity and thus any potential courtroom action would find the company devoid of any 'real' assets.  The golden goose simply ran out of gold to lay its golden eggs and was left to starve to death.
#9

Anytime you remove a major product line from a relatively narrow industry there will be some interest from the consumer side. Most people are only curious about what happened to the product line, and will there be any more in the future. The tangled web of international legal issues are what make the story compelling at this point.

HJ, I’ll read the book for those technical details, but the added drama (and tendency to skip over the facts) would make the movie much more entertaining. :slight_smile:

Tim, I checked the Large Scale Trains Wiki, and found no mention of any “RhB Bullies” or “Ventilators”. I wonder what you could be referring to… :wink:

#10

And remember Paul,
everything you read above is pure conjecture on the part of the posters who have no actual connection to the companies involved and therefore should be considered about as reliable as the National Enquirer.

#11

John,
one must assume that the National Enquirer is a thoroughly reputable publication. Not being American, I am not aware of such quality publications, but knowing your innate integrity, take the conclusion that a man of your stature would not lower himself to read publications that would tend to gild the lily and thus propogate falsehoods. No doubt they get the names right, although some disreputable journalists have been known to use pseudonyms to hide their true identity and thus free themselves from ridicule.

#12
John Joseph Sauer said:
And remember Paul, everything you read above is pure conjecture on the part of the posters who have no actual connection to the companies involved and therefore should be considered about as reliable as the National Enquirer.
Including Marvin, is all his personas.
#13
Paul Lambert said:
Anytime you remove a major product line from a relatively narrow industry there will be some interest from the consumer side. Most people are only curious about what happened to the product line, and will there be any more in the future. The tangled web of international legal issues are what make the story compelling at this point.

HJ, I’ll read the book for those technical details, but the added drama (and tendency to skip over the facts) would make the movie much more entertaining. :slight_smile:

Tim, I checked the Large Scale Trains Wiki, and found no mention of any “RhB Bullies” or “Ventilators”. I wonder what you could be referring to… :wink:


Paul

Yes, there will be more, as a matter of fact the production line in Györ is running. There are additional pictures and reports (apart from the Märklin press release), but those are not officially sanctioned. :wink: :slight_smile:
Last report: (some of) the tooling for US proto items - formerly in China - is now in Györ; probably prevents a lot of tempting hanky-panky in China. :wink: :slight_smile:

“Ventilators” is explained in one of the threads. “RhB Bullies” is so new we haven’t heard yet how that was “coined”, but with the currency situation the “Ventilators” have at present - a lot of froth doesn’t mean they have liquidity - I don’t expect a coherent explanation any time soon. :wink: :smiley:

“So it goes” Kurt Vonnegut