Large Scale Central

One year ago .... it was Märklin

General Discussion
#1

Hi all,

It never hurts to have a little bit of background how things unfolded or developed. First some “ancient” commentary, since a reference article in another post is also a bit dated.

From the FinanzNachrichten.de (FinancialNews) dated April 24th 2006

FN said:
24.04.2006 19:50

Südwest Presse: Kommentar zu Märklin

Ulm (ots) - Der Wunsch des Märklin-Betriebsrats hat Seltenheitswert am Standort Deutschland. Er spricht sich, wie auch Mitarbeiter und Gewerkschaft, für den Verkauf des Unternehmens an einen ausländische Finanzinvestor aus, einer Spezies, die Sozial- und Arbeitsminister Franz Müntefering einst als Heuschrecke gegeißelt hatte. Gleichzeitig gibt der Betriebsrat den drei Gesellschaftern, die sich gegen den Verkauf sperren, eine verbale Ohrfeige. Ausgerechnet die Verwandtschaft des Firmengründers blockiert den Einstieg eines finanzkräftigen Partners, dessen Strategie auf eine nachhaltige Sanierung des angeschlagenen Unternehmens und Wachstum, nicht auf dessen Zerschlagung ausgerichtet ist. Die Zwistigkeiten unter den 23 Gesellschaftern haben das Unternehmen gelähmt - und das in einer Zeit, in der durch die Konjunkturflaute und den schrumpfenden Markt längst ein beherztes Vorgehen bitter nötig wäre. Zudem waren und sind die jetzigen Gesellschafter nicht in der Lage, Märklin die dringend benötigte Finanzspritze zu geben, damit die Marke ihr Potenzial am Markt besser ausnutzen kann. Vom Verkauf profitieren letztlich alle Beteiligten. Das sollten die drei sich zierenden Gesellschafter bedenken. Spielen sie weiter Bremsklotz, schaden sie Märklin noch mehr, als sie es bisher getan haben. Die Alternative zur Sanierung ist das Abstellgleis - und das will wohl keiner.


my translation

HJ translation said:
[b]Southwest Press: Commentary on Märklin[/b]

Ulm - The wish of the union leaders from the Märklin local has rarity status in Germany. They favour, as do the employees and the union as a whole, the sale of the company to a foreign investment company; a species which social affairs and labour minister Franz Müntefering at one point flaggelated as “locusts”. The union leaders simultaneously dish out a verbal slap in the face to the three partners who oppose the sale. Of all things, some of the relatives of the founder block the participation of a financially strong partner, whose strategy envisions a thorough reorganization of the battered company and future growth, not a dismantling. The disputes among the 23 partners paralyzed the company - and this at a time when due to the stagnant economy and the shrinking market some stout-hearted action would be desperately needed. The present partners haven’t been and are still not in a position to give Märklin the required financial injection, which would enable the company to optimize its
potential in the marketplace. A sale will, in the end, benefit all the participants. That should be food for thought for the three recalcitrant partners. If they continue to play the brakeshoes, they will harm Märklin still more than they have thus far. The alternative to reorganisation is the dead end track - and nobody would want that.


Chances are that the same union local leaders also organized the protest which took place in Göppingen on March 19th 2007 in which several hundred employees participated. Märklin has approx. 700 employees in Göppingen. More on that later.

#2

And then the sequel (it hurts to read whatever Google translates!)

This was a few weeks ago! March 19th 2007

Stuttgarter Zeitung said:
... Märklin

Protest gegen Stellenabbau

Mehrere hundert Beschäftigte des Modelleisenbahn-Herstellers haben am Montag mit einem Protestmarsch durch die Göppinger Innenstadt demonstriert

Göppingen - Mehrere hundert Beschäftigte des Modelleisenbahn-Herstellers Märklin haben am Montag mit einem Protestmarsch durch die Göppinger Innenstadt gegen einen geplanten Stellenabbau protestiert. Nach Angaben der Gewerkschaft IG Metall zogen nach einer Betriebsversammlung rund 500 Arbeitnehmer von der Stadthalle zum Stammwerk.

Unter den Demonstranten waren auch auch Arbeitnehmer aus Nürnberg und vom thüringischen Standort Sonneberg. Das Werk in Sonneberg mit rund 220 Mitarbeitern soll komplett geschlossen werden. Das Werk in Nürnberg soll zum Marketing- und Vertriebsstandort vor allem für die Marke Trix umgebaut werden.

Die IG Metall kritisierte den geplanten Arbeitsplatzabbau. Es würden nur Stellen gestrichen und es gebe kein Gesamtkonzept. Zudem widerspreche der Plan, die Produktion in “Billiglohnländer” zu verlagern, dem Qualitätsgedanken der Traditionsmarke Märklin. Unter anderem soll die Fertigung in Nürnberg mit 30 Beschäftigten geschlossen werden und nach China und Ungarn verlagert werden. Am Hauptsitz in Göppingen sollen rund 120 von 700 Arbeitsplätzen gestrichen werden.

Die Standortschließungen sind nach Angaben der Geschäftsführung Teil eines Programmes zur Sanierung des Traditionsunternehmens, das in den vergangenen Jahren große Umsatzeinbrüche hinnehmen musste. Nach der Stabilisierung des Erlöses im vergangenen Jahr, soll nach Unternehmensangaben 2007 die Kostenseite angegangen werden. Zugleich soll aber weiter investiert werden - etwa in Fertigungsanlagen sowie in Forschung und Entwicklung.

Märklin war im Mai 2006 nach langem Tauziehen mit den Familiengesellschaftern vom britischen Investor Kingsbridge Capital übernommen worden.

dpa
19.03.2007 - aktualisiert: 19.03.2007, 14:03 Uhr


my translation, please feel free to compare with the Google version. :wink: Happy reading!

HJ translates said:
... Märklin

Protest against job cuts

Several hundred employees from model railway producer Märklin participated in a protest march through Göppingen’s downtown.

Göppingen - Several hundred employees from model railway producer Märklin participated in a protest march through Göppingen’s downtown to oppose the planned job cuts. According to information from IG Metall (Metalworkers Union) about 500 employees participated, after a union meeting, in the march from city hall to the Märklin headquarters.

Amongst the participants were union members from Nürnberg and the plant in Sonneberg (Thuringia). The plant in Sonneberg, with approx. 220 employees, is to be shut down. The plant in Nürnberg will be converted to a marketing and distribution point to mainly serve Trix.

IG Metall criticizes the planned job reductions. There will only be job cuts and no overall strategy. Furthermore runs the plan, production in “low wage countries”, counter to the quality principal of the venerable “Märklin” name. Amongst other things there is the closure of production in Nürnberg (30 employees), to be outsourced to China and Hungary. Of the 700 jobs at headquarters in Göppingen approx. 120 will face redundancy.
The plant closures are, according to company management, part of a program to restructure the venerable enterprise, which, in recent years, had to accept large reductions in turnover. After the stabilisation of returns in the past year one will, according to company information, in 2007 concentrate on the production costs. At the same time there will be additional investments - in production equipment as well as in R&D.

Kingsbridge Capital, the British investment company, acquired Märklin in 2006, after a protracted tug of war with the Märklin family partnership.


And what has any of this to do with Large Scale??

a) Märklin has a nice line of Spur 1 (Gauge One) items in proper 1:32 scale.

b) Märklin has been loudly announcing that they will produce a garden railway line even if they can’t acquire the remnants of LGB.

That statement was, of course, taken with a grain of salt by the German industry participants. But hey, you just never know! :wink:

#3

The first article was published before Kingsbridge “took over” Marklin (with help from thier bankers)
I find it hard to believe that the same union that would indorse the sale in 2006 would have a protest March against it a year later!
Maybe that’s when they found out that Marklin was going to close down Germany. Perhaps they were under the impression that they wouldn’t lose thier jobs. A large investment group would never do something like that! :wink:

quote from 2006 article:

“The present partners haven’t been and are still not in a position to give Märklin the required financial injection, which would enable the company to optimize its
potential in the marketplace. A sale will, in the end, benefit all the participants.”

Sounds like Woerhle and LGBoA have thier act together and have a good offer as well as the marketing and logistical support (from Woerhle) that would be necessary to turn the economic situation around.

Sounds like the banks can make thier money and keep jobs in Germany- IF they really want to and have no ulterior motives.

Careful now- we don’t want to get booted off of another forum now do we? :wink: :wink: :):):):):slight_smile:

#4

I can understand the German workers frustration with Marklin wanting to outsource their manufacturing. It’s been going on for years in the US and it sucks. It’s destroyed the manufacturing job market here in the US. I just wish we here would take note of those workers in Germany protesting. I feel that overall our workers just don’t speak out loudly enough when they get screwed by big business.

#5
Warren Mumpower said:
I just wish we here would take note of those workers in Germany protesting. I feel that overall our workers just don't speak out loudly enough when they get screwed by big business.
And that's exactly what's going on over there . The banks want the label for thier investment group and they're attempting to do it any way they can even if it means destroying businesses and laying off workers. It doesn't really matter how you feel about LGB one way or the other it's more about business ethics at this point.
#6

Or…a lack of business ethics on the part of the banks.

#7
John Joseph Sauer said:
The first article was published before Kingsbridge "took over" Marklin (with help from thier bankers) I find it hard to believe that the same union that would indorse the sale in 2006 would have a protest March against it a year later! Maybe that's when they found out that Marklin was going to close down Germany. Perhaps they were under the impression that they wouldn't lose thier jobs. A large investment group would never do something like that! ;)

quote from 2006 article:

“The present partners haven’t been and are still not in a position to give Märklin the required financial injection, which would enable the company to optimize its
potential in the marketplace. A sale will, in the end, benefit all the participants.”

Sounds like Woerhle and LGBoA have thier act together and have a good offer as well as the marketing and logistical support (from Woerhle) that would be necessary to turn the economic situation around.

Sounds like the banks can make thier money and keep jobs in Germany- IF they really want to and have no ulterior motives.

Careful now- we don’t want to get booted off of another forum now do we? :wink: :wink: :):):):):slight_smile:


JJ

You’re right on being careful, :wink: and you’re welcome to the proper translation. Google, Babelfish and Altavista translations just don’t turn my crank at all.
BTW I have a translation program on the 'puter which does a passable job (German, French, Italian and Spanish) when one uses it in the “elaborated mode”. Problem is I can do it faster by using my noodle and the LEO dictionary for the words/terms that don’t spring to mind right at that moment.

In order to evaluate the Wöhrle offer one needs to look at the track record (no pun intended) of that company and from what I have read on that, it is rather mixed. But it is well known that the Germans, like most other nationalities, like their “locusts” to be homegrown. So we just wait and see what transpires in the next week. But the banks insistence that it will be a “leased property” deal is certainly a good indicator that they’re not interested in any additional hanky-panky from whichever side. That much seems certain. :wink: :slight_smile:

On how the banks make money; by asking for really good collateral on any loans and by looking at “the big picture”. As mentioned I have relatives in the banking industry - in leading positions - and to listen to them is mighty interesting! :wink: :slight_smile:

#8

HJ, is this your relative?

Hans-Ulrich Müller, Credit Suisse

#9

No, but would it matter? :wink: :slight_smile:

#10

Of course not, but if I had a brother high up at Credit Suisse I would be very proud of him! I’m also proud of my brother who is not.

#11
Hans-Joerg Mueller said:
But the banks insistence that it will be a "leased property" deal is certainly a good indicator that they're not interested in any additional hanky-panky from whichever side. That much seems certain. ;) :)
From what I've read it sounds like Woehrle wants to buy the property straight out and doesn't want the banks involved. This seems to make the most sense.
#12
John Joseph Sauer said:
Hans-Joerg Mueller said:
But the banks insistence that it will be a "leased property" deal is certainly a good indicator that they're not interested in any additional hanky-panky from whichever side. That much seems certain. ;) :)
From what I've read it sounds like Woehrle wants to buy the property straight out and doesn't want the banks involved. This seems to make the most sense.
Sure the Wöhrl/LGBoA partners would like the whole shebang, but it looks like the banks have a different appraiser for the real estate than Wöhrl. That happens quite often with real estate collateral, those who hold the securities made damn sure that the securities are "real" (again, no pun intended).
#13

There’s only one thing banks care about and it isn’t heritage, nationalism, workers,etc…
It’s- http://www.youtube.com/watch?v=GlS8O257Gi0

Whoever waves the bigger carrot in thier noses gets what they want.

Banks with a conscience- what a hoot!

#14

Banks with any ethics is a hoot…!!

#15
Warren Mumpower said:
Banks with any ethics is a hoot..!!
..........or an oxymoron.
#16
John Joseph Sauer said:
There's only one thing banks care about and it isn't heritage, nationalism, workers,etc.... It's- http://www.youtube.com/watch?v=GlS8O257Gi0

Whoever waves the bigger carrot in thier noses gets what they want.

Banks with a conscience- what a hoot!


JJ

One of the interesting wrinkles in this mess is the role of the banks just prior to the declaration of insolvency - you know that act that happened to prevent a “hostile takeover” or at least that’s what some people would like us to believe.

OK here is what is common knowledge:

LGB gets into substantial financial trouble circa 2004/2005 (dates vary according to source),

takes out some substantial loans (the total of debt at insolvency was approx. 20 million Euro),

the loans are due end of Aug 2006,

the banks call the loans, freeze all accounts and obtain a temporary injunction preventing LGB from doing any business.

LGB declares insolvency - supposedly in order to prevent a “hostile takeover”.

Without going into any detail tell me: have you heard of a bank being able to freeze accounts, obtain an injunction to cease all trading without some very pertinent reasons and well documented affidavits. Perhaps in a corrupt third world country or a banana republic; but Germany is neither! Yes the banks were entitled to call the loans, the term was up.

There is a lot more to this than what has met the eye so far! :wink: :wink:

As I mentioned before if people would have continued buying at the rate they used to buy, this may not have happened. But people didn’t do that, the reasons are very many and I think we discussed a few of them on the fora. I know why I buy LGB products in a very selective manner and there are plenty of others who also buy selectively.

You reap what you sow!

#17

If it was as clear cut as you say there would be no negotiations going on at this point in time.
Banks do not play games. As you say there is more here than meets the eye. :wink: :wink: :wink: :wink: :wink:

#18
John Joseph Sauer said:
If it was as clear cut as you say there would be no negotiations going on at this point in time. Banks do not play games. As you say there is more here than meets the eye. ;) ;) ;) ;) ;)
Oh so much more!
#19

Maybe it all came about because of “the kids playing with the trains”.

With apologies to Ric Golding of course. (I would put s smilie but I can’t remember how to do them).

#20
John Joseph Sauer said:
If it was as clear cut as you say there would be no negotiations going on at this point in time. Banks do not play games. As you say there is more here than meets the eye. ;) ;) ;) ;) ;)
JJ

The part I outlined was just as clear cut as that, but there is plenty of murky stuff both long before and since that I would be very foolish to put in print. And since I’m not foolish, I won’t! I wasn’t referring to the banks when it comes to playing games. :wink: :slight_smile:

Suffice to say that the German papers have developed a “keen interest” in this matter. No I don’t have that from a “reliable source”, I have that from one of my sources! :wink: :slight_smile: