Hi all,
Yes there is plenty of reaction and various opinions, to get a bit of insight here is one translation. Yep, this has been posted in best Germlish already, problem is Germlish looses the context and the gist in plenty of instances. So I sat down and translated the whole shabang from the original German
From the LGB Freunde Much http://www.lgb-much.de/index1.html IIm - Online News
Happy reading!
translation of IIm - online News article said:
EPL in insolvencyMonday Sept. 18th 2006 it was announced that Ernst Paul Lehmann Patentwerk in Nürnberg had to report insolvency. In the night from Monday to Tuesday the fact was official proclaimed on EPL’s website.
As disturbing as the News is: for Insiders it had been obvious for many years that a business model was being
followed which was bound to fail. Lehmann is “advise resistant” is the way one of the large LGB dealers phrased it and he was absolutely correct. Despite there being plenty of advisers and consultants at Lehmann in the past years, who for plenty of money wrote many “white papers” and evaluations. Were any of those put into action? And the product, LGB trains, couldn’t have been the subject of the evaluations - the advisers and consultants couldn’t have had the slightest inkling in that respect.But the product was always the most important part: what was the consumer looking for and how much could that cost for him to afford it. That was the question of all questions and for years and years there were nothing but incorrect answers. The own employees, most of all the sales people in the field who were on the front lines, as well as the dealers, were seldom asked, but rather presented with “faits accomplis”. Add to that the hiring of the invariably wrong people, which as a result didn’t neutralize one’s own incompetence.
“The pilot is leaving the ship” wrote someone else, on the occasion of the retirement, respectively being “put out to pasture”, of Klaus Baumann, the former EPL sales manager. That remark was right on target as well! In difficult times, such as are being experienced at the moment and have been experienced for some time, it is important to have someone on bord who knows the shallows and the hidden rocks along the way. Not one of that type can presently be found at LGB - and promptly the ship runs a-ground. It was listing for some time and the leakage points in the hull were clearly visible. But one didn’t want to see them. The captain of the ship lacked a licence…
And then one added the eXtra size hole to the hull. However that only accelerated the process, it wasn’t the cause. But it showed the arrogance, the overweening opinion of oneself, the misjudgement of reality. Obviously one had no idea what the market demanded. Namely no Disney-, Coca-Cola, Peanuts- and other colourful and often ugly repaints and in the main no Standard Gauge items which have a forced scale appearance. The customer wanted something different. But the group that had experience, was no longer needed and not asked. Nonetheless there were a few years with good new items and one was rubbing one’s eyes in surprise. But it was like with a pride of lions, when a newcomer joined, he thought he had to first bite everything in sight. Well, if top management allows that, it will later on have to take the responsibility…
“The true blood was only noticeable in small drops” was our comment in regards to this year’s line-up of new items. Even that could have been no more than tinted water! A company which was to a large extent comprised of a huge legal department couldn’t possibly function. Most certainly not with products for the hobby field, for people who would like to get their enjoyment. That one had to lower certain quota points was of importance! At a point in time when the final point had been visible for quite some time…
And the “LGB Family” hadn’t been taken care of for a long time. One was eager to take, but reluctant to give anything. The LGB-Depesche, at one time an item that produced positive connections, seemed no more than just a piece of sales literature. Flat and indicative of all the rest!
Old friends were neglected and withdrew by and by. Those who missed the customary Christmas card greetings were consider unimportant. But one forgot that it was the “unimportant” who lent the support and were waiving the LGB flag. They saw the disaster coming a long time ago. And wondered why no one at Lehmann pulled the emergency brake. Instead one got big words and a big show, as if nothing was amiss, as if the clock didn’t show one minute to twelve…
Still ringing in one’s ears was the statements of the first CEO at LGBoA, how the influental people in the States were courted and the success one had by doing that. How all this showed up in large profits on the bottom line. Lehmann never saw the necessity. The opinon was “We make enough money as it is with our products.”
The packaging got thinner, the cardboard sleeve went by the wayside, the labels got printed in house, black and white was sufficient, the quality did a nose dive thanks to China, but increasing prices made up for that. That just couldn’t work out! The eXtra Shop concept took care of the rest. Despite friendly advise there was no stopping it or at least have it cancelled in short order. A New Items selection concept with mostly repaints is hard to fathom. What speed LGB had in the early years - our compiled LGB-History is a good indicator and witness! We also remember very well the statement from the senior company owner that of every 1Mark (1 dollar) earned, 99 Pfennig (99 Cents) belonged reinvested in the enterprise. But that was a long time ago, otherwise one would have had all the items in the program with which the competition has been running away, respectively which are still missing from the LGB line-up.
It ist too late now! Selective actions, like bringing back the USA-Exclusives or for that matter starting an in house LGB-Club, were much too late! “You snooze, you loose!”LGBoA was the first domino going down! And the stories one hears in the USA on the decline of LGB are absolutely absurd, incomprehensible. To run a flourishing business like that completely off the rails takes some real talent! Where are all the models the American customers were willing to buy? The “Galopping Goose”, Heisler, Climax, a K28 or K27? Instead one built a Mikado, that no one wanted, which had lots of drive problems and which paralized the Lehmann mould making department for a full year. And a transparent F7 was also available…
Even the LGB/Aster line was throttled. To finally choose a GG1, that bordered on sabotage! The Württemberg Mallet was scalewise too big und didn’t sell well because of that. The remaining 200 were repainted in green. It was forseeable that customers would then in larger numbers ask for the black version. But now they were all green.
For quite a while one heard the comment that none of this would be happening if Eberhard Richter were still alive. Quite possible, but that that doesn’t advance the thought process either. Why wouldn’t his brother intervene at some point in all these years? Permission for that question must be given - notwithstanding our friendship.
The next question will be, what’s next? For starters an insolvency trustee has taken the reins. That should result in resumed deliveries to the dealers. The basic job of the trustee is to keep the enterprise functioning until such time as a buyer is found. Or alternatively to wind down and liquidate the company if no interested buyers can be found.
What damage this caused the “LGB” make! What becomes of the employees, the dealers, the suppliers and again their employees? Who will be ready to assume the company? Strictly financial backers are not enough. What is required is a complete new management team! One recalls how POLA was taken over by Faller. There was plenty of noise from the defective transmission while shifting and the POLA make has still not fully recovered. LGB is also tied down by their Saganer location in Nürnberg. It won’t simply be a case of moving the machinery to a new location…An Insider had the following advice: Complete change of the management team. Pick the best of the remaining staff, invite the 50 largest dealers to Nürnberg and present them with a new concept and a new/revamped product line-up. Then slowly but steadily resume business! Following this simple concept there might be an investor who advances the necessary funds. But first one would need to find him…
Please excuse the occasional missing letter/typo
