Post Number: 37
|Posted on Friday, May 09, 2008 - 9:28 am: || |
I just caught this in the current edition of Crain's. Lionel is a Michigan institution with its headquarters in Chesterfield Twp. The newly acquired company includes Neil Young as an owner. Their facility in Chesterfield includes a tour and impressive train display. Does anyone know if they will keep this facility open?
Post Number: 401
|Posted on Friday, May 09, 2008 - 9:50 am: || |
Where in New York are they moving to?
Post Number: 6120
|Posted on Friday, May 09, 2008 - 9:53 am: || |
http://www.chicagotribune.com/ news/chi-ap-mi-lionel-comeback ,0,4955564.story
Post Number: 2257
|Posted on Friday, May 09, 2008 - 10:18 am: || |
What goes around comes around:
Lionel started in New York, their headquarters were in New York until 1969, and now they are going back to New York.
I spent a little time at the 23 mile headquarters, not as an employee of the company directly, though.
Post Number: 1612
|Posted on Friday, May 09, 2008 - 10:26 am: || |
From the May 7, 2008 Macomb Daily:
Lionel LLC’s chief executive says the toy train maker has moved its headquarters out of Chesterfield Township to New York to focus on expanding retail sales but is keeping its longtime hobby business and other operations in the Detroit area.
Here is a May 3rd wire report:
Lionel LLC has emerged from bankruptcy protection, ending more than three years of restructuring and a bitter fight with a rival model train company.
The 108-year-old Chesterfield Township-based toy maker formally came out of bankruptcy Thursday, leaving the company poised to move out of the hobby shop and into the broader pop-culture marketplace.
Chief Executive Gerald Calabrese, a former Marvel Comics executive who shepherded Lionel through bankruptcy, said in an interview that he sees the new Lionel as an entertainment company and not just a toy maker.
“The way people buy and sell things has changed dramatically since 1900,” said Calabrese. “We’re not the distribution and sales mechanism anymore, we’re the intellectual property. And that’s the major change in the outlook of this company.”
Breaking into the broader toy market is key to Lionel’s growth, said Calabrese. During the company’s stint under bankruptcy protection, sales for Lionel starter sets — kid-friendly systems that range in price from $129 to $300 — more than doubled. The company sold some 200,000 sets last year with much of that growth coming from sales at department stores and big-box retailers.
“We had virtually no sales at outlets like Target and Macy’s and FAO Schwarz when the bankruptcy started,” said Calabrese.
Developing new products that appeal to kids and getting them on the shelves at big retail outlets is only part of what Calabrese, who worked on Marvel’s television programming in the 1990s, calls the pop-cultural segment of the toy market. He says that in today’s marketplace, movies and television are the key drivers to sales.
Lionel found itself in bankruptcy in November 2004, just months after Calabrese was named CEO, when federal jury awarded rival train maker MTH Electric Trains $38.6 million in a trade-secrets dispute with Lionel. Faced with a judgment it couldn’t pay, Lionel filed for Chapter 11 bankruptcy.
An appeals court later overturned the verdict and ordered a new trial. Lionel and MTH settled their long-running fight late last year, paving the way for Lionel’s exit from Chapter 11.
According to Wikipedia,
Following the reorganisation plan, Neil Young is no longer a minority shareholder in the Lionel company; however, Calabrese insists that the company wants Young to remain involved, claiming that Neil will have an "ongoing role in the company", but that this role is "up to [Neil]"
Post Number: 402
|Posted on Friday, May 09, 2008 - 10:45 am: || |
Yes, it's just their HQ that is moving. Thought it would be odd if they moved their operations to NYC seeing how pricey this area is. Also looks like they're making a comeback.
Didn't realize the model train world was so complicated until I read that Lionel LLC wikipedia entry.
Post Number: 820
|Posted on Friday, May 09, 2008 - 10:47 am: || |
Where the headquarters goes...
Sure, NYC is pricey, but it is perceived to have status. It's not always about dollars and sense.
Post Number: 403
|Posted on Friday, May 09, 2008 - 10:54 am: || |
True, having your HQ here helps, but why your daily back office operations if its successful as is?
Post Number: 6123
|Posted on Friday, May 09, 2008 - 10:58 am: || |
When you are trying to market to retailers, you almost HAVE to be in NYC
Post Number: 2259
|Posted on Friday, May 09, 2008 - 1:12 pm: || |
Neil was never more than 3% of the ownership when Wellspring associates bought the company from Dick Kughn. The late Martin Davis was the principal owner of Wellspring with I think 51%, and there was never any mention of him, the media had file video of Neil "rocking in the free world" with a voice-over stating "rocker Neil Young buys Lionel train company".
Neil was a partner in a subsidiary of Lionel, pre-Wellspring called "Liontech", they developed the higher-tech control devices Lionel has marketed for the last 12 (or so) years. They were developed out in California by a couple of electronic engineers/tinkerers that Neil employed. One aspect of these products is to make controls that the handicapped could use easily. Neil's son has cerebral palsy and he wanted his son to be able to enjoy his trains.
Post Number: 2324
|Posted on Friday, May 09, 2008 - 3:14 pm: || |
For the last 30 years or so, I believe the bulk of Lionel's sales have been through traditional mom and pop independent hobby stores, rather than the large retail outlets. The Crain's article also quoted the Lionel president as saying that Lionel will now "partner" with Macy's, which leads me to believe that they will now start placing their train sets in the large retailers rather than the earlier reliance on independent shops ( which appear to be going down in numbers yearly ).I would not think this will sit well with the independents,some of which may have real trouble staying afloat as Christmas sales are such a big part of their year.
I read the Federal Appeals Court ruling that reversed the big award against Lionel. They held it was reversible error for Judge O'Meara to have allowed the testimony of a U of M Professor of Engineering who testified on behalf of MTH ( Mike's Train and Hobbies), the court holding that professor did not really have the expertise to testify as to the patent issues,control devices,schematics etc. involving the software each manufacturer was disputing. The reversal came out a few days before Christmas a couple of years ago, quite a Christmas present for Lionel!
Post Number: 6795
|Posted on Friday, May 09, 2008 - 3:33 pm: || |
What!! They're moving their HQ out if Michigan!!
Dammit, I'm moving all my assets out of Lionel and into HO.... I'll show them!!
(Comerica sarcasm alert)
Post Number: 11656
|Posted on Friday, May 09, 2008 - 3:38 pm: || |
I don't get it. According to our state government taxes are killing us but they move to NYC were taxes are higher.
So there must be something beyond taxes that is attractive to business. What a concept.
Post Number: 1686
|Posted on Friday, May 09, 2008 - 4:07 pm: || |
Taxes in NY may be higher but there is more access to the business leaders and movers and shakers than in the midwest. NY is the retail HQ capital it seems, so it makes sense to be close to them.
Gotta respect capitalism...
Post Number: 6584
|Posted on Friday, May 09, 2008 - 4:17 pm: || |
It's all about the N-Scale. Harder to find products for it, but you can make a whole frickin' state on a piece of plywood, and everything is so small, the detail looks awesome.
Post Number: 2092
|Posted on Friday, May 09, 2008 - 5:21 pm: || |
Wow, they pulled a Comerica on us.
Poor Metro Detroit.
Post Number: 186
|Posted on Friday, May 09, 2008 - 10:35 pm: || |
56packman, actually in the middle of their slow fade in the 60's they had their HQ in Hagerstown, Maryland for awhile...but I dunno what THAT was about. Ironic if you consider the origins of Jerry Williams & Mike Wolfe down the road
I think the sole reason they wound up in Mt Clemens is General Mills had the space there-maybe an old Craftsmaster factory?(I know AMT model kits were out of Troy)
Post Number: 6004
|Posted on Friday, May 09, 2008 - 11:05 pm: || |
Not really base news, at all, especially with Lionel on the upswing.
Post Number: 188
|Posted on Saturday, May 10, 2008 - 12:18 am: || |
Lmichigan, I haven't heard that, the rule of thumb is when the economy gets shakey the toytrains are the 1st to go, much like 1929's "State Set" and AF's "Prosperity Special". There's been too much drama in the hobby lately, anyway. No offense to the brick & mortar guys I grew up with(PH&D in Fraser, et al) but the mega dealers back East & E-Bay are the only way 2 go. The_rock, they were also bogged down in a major lawsuit in the 60's involving deep discounts by proto-Big Box appliance retailers. Cowen's nephew, Roy Cohn(yes, THAT Roy Cohn) pretty much took them into the ground. I don't think Kueghn had the highest bid anyway, he was Taubman's right-hand man & I recall hearing the money was from Ford Motors
Post Number: 2326
|Posted on Saturday, May 10, 2008 - 8:09 am: || |
When General Mills took over and things shifted to Mexico, the quality went south, too. Those were bad years. We all hope for the best for Lionel. There are only so many dollars to be made in the model train industry. If you take a look at Model Railroader magazine, you would be surprised how many manufacturers there are who compete for those dollars.
Great deals can be had on eBay, both new and used locomotives and rolling stock. eBay has also become the hobby shops enemy.
Post Number: 2261
|Posted on Saturday, May 10, 2008 - 10:22 am: || |
FlyingJ--the reason they ended up in Mt.Clemens (later to be KA Chesterfield Township) is that the technology used to make the rolling stock and some cheap locomotives changed to more injection-molded plastic and that was already up and running at AMT in Mt. Clemens. AMT had been in Troy but were in Mt.Clemens by then.
As to Dick Kughn's 1986 purchase of Lionel from General Mills/Fundimensions, He had already retired from Taubman and had his own firm, Kughn Enterprises, which he still runs today, albeit at a slower pace. He received two calls in the same day from two different train freaks who heard a rumor that General Mills was going to dump Lionel. He had his attorney call General Mills and inquire, and they got a quietly positive answer. The money would have come from banks, he's a businessman, businesses borrow from banks all the time. General Mills/Fundimensions had sent production to Mexico, which was nothing but a disaster. Dick predicated the closing of the deal to take place once the machines were shipped back from Mexico, set up in Mt.C, and running. GM/FD did that, they closed and Dick was off and running.
Mike Wolf wanted to replicate Lionel's old 20s-30s Standard gauge/O-gauge tinplate product through the manufacturing contacts he had established in Korea, this was in the late 80s.
(Mike married the daughter of one of those manufacturing firm's presidents)
Lionel became aware, said "no way, everything about that screams Lionel, we won't have you do that with your name on it" so they reached a deal where Lionel would market those products as "Lionel classics" which Lionel marketed marketed until 1993, when they discovered (at the York, PA train fest) that Mike's Train House (hereafter referred to as "MTH") was making other/obsoleted identical locomotives and trains bearing the MTH brand. Lionel sued MTH, MTH counter-sued for a breech of contract on Lionel's end and Mike out-lawyered them and won. He took the award from that lawsuit and used it to go after Lionel, and did so with amazing market savvy. All of his product come from overseas, Korea for the high-end product, China for the starter sets.
A part of this latest suit relates to a Korean outside engineering firm where two unscrupulous employees took MTH drawings/plans and passed them to employees at Lionel. MTH embarked on making and selling a series of very high detail, expensive locomotive/tenders that retailed in the $1,600 range. They modeled many prototype locomotives that had never been made. Lionel LLC (Wellspring associates, after Kughn Enterprises) jumped into this, making the exact same locomotive with equally as fine detail and quality, and somehow would come out with the exact same historical locomotive model the same year. It came out that the employees of the Korean engineering firm were passing plans/marketing information (the plans told what loco was being replicated) to an underling at Lionel here, and all of a sudden he was a soothsayer.
All that said, Dick Kughn built the O-scale hobby back from the brink of death such that there are now several cottage industries and two majors (Lionel,MTH) active in producing.
I think had Dick not bought/built Lionel back it might have limped along with new owners, but that the O-scalers would manly be trading older Lionel product and that would be the extent of it.
Post Number: 2329
|Posted on Saturday, May 10, 2008 - 1:12 pm: || |
packman---you should have testified at the trial, and Lionel would not have lost!
It's amazing to me as an attorney how much litigation there always has been between different model train maufacturers over patents,intellectual-theft, infringements etc. Blood-feuds, actually. Some of the litigation going on for years.The write-up of the Lionel-MTH trial posted above indicates that this was a jury award, but I believe it was a bench trial with the Federal Judge sitting both as trier of the fact and trier of the law. O'Meara really got a work -over from the Appellate Court when they reversed his findings and Judgment rendered in Detroit at the trial.
I heard that MTH took a real financial beating to undergo the trial, costs thereof, atty fees etc.,and now they are really struggling. I think they put out a pretty quality product and hope they, too, can survive.
I also hope to catch up with Bob Cosgrove whom you probably know is the Curator of the Glancy trains at the Detroit Historical Museum and now works part-time for Lionel. I think he also is Editor of the Lionel publication. I am interested in his views as to what the future holds for both Lionel and MTH.
I see that Marklin is now out of bankrupcy and is now owned by a British group after so many years being identified with its roots in Germany. Lot's of turmoil in what some call 'the toy-train industry".
In the meantime, my O/027 Lionel trains go round and round, whistle and hiss,while my Fleischmann, Bachmann, Broadway Limited, IHC etc, HO's do their thing on 4 different tracks, oblivious to what's happening out there in the "toy train" world.
Post Number: 6798
|Posted on Saturday, May 10, 2008 - 2:34 pm: || |
Wow some train hobbyists!
Did any of you folks go to the national NMRA Train Show at Cobo Hall last summer?
It was pretty awesome.
Funny thing is that LEGO has a line of 9 volt trains that have been appearing quite often at model railroad shows in recent years. There's a lot of regional LEGO train clubs that have appeared in the last 10 years around the world. The regular model railroaders don't care for the LEGO train folks, but LEGO seems to steal all the thunder at these shows due to the large skyscrapers, train stations and other buildings that can be built with LEGO.
Check out what Oakland County LEGO enthusiast Jim Garrett can build (that's hime next to his Penobscot Building):
Jim has been building iconic Detroit buildings for several years now. He's spent thousands of dollars on LEGO parts to build some of these Detroit beauties (Fisher Bldg, Stott Tower, Griswold Building, DIA, Main Library, etc.):
His displays have been featured (along with other Michigan LEGO enthusiasts layouts) at the MAX for the last 2 Christmas's. There's a few AFOL (Adult Fans of LEGO) on this forum besides myself.
Post Number: 2330
|Posted on Saturday, May 10, 2008 - 4:52 pm: || |
WOW, yourself Gistok! I was down at the NMRA show last summer and met Jim Garrett and his dad, Wayne at the Lego exhibit. Wayne and I served on the Dossin Board for several years. I did not know that his son was so talented. Unbelievable structures. Such detail.
Nor did I realize there is some apparent animosity between the model rail buffs and the Lego RR folks. Maybe it is jealousy, as you are correct that the Lego exhibit is a real fan draw at these model shows. I think they compliment the shows very nicely. The grandkids love the Lego RR exhibit.
Tell Jim it's time for a Guardian Building!!
Post Number: 1125
|Posted on Saturday, May 10, 2008 - 5:18 pm: || |
Packman is correct. What goes around comes around. Especially model trains.
Post Number: 6484
|Posted on Saturday, May 10, 2008 - 6:35 pm: || |
This is a great thread in a world that jjaba knows nothing about. The Forum is THE place to learn about another Detroit, another world.
There is almost an Eastside angle here, on the edge of it all. Thanks for the ride.
Post Number: 2262
|Posted on Saturday, May 10, 2008 - 6:39 pm: || |
I would like to go on record as saying that I'm not a toy train enthusiast, it was a business I worked in for 12 years or so, and I couldn't help but come by some of this knowledge.
Post Number: 606
|Posted on Saturday, May 10, 2008 - 11:41 pm: || |
Early on, this thread seemed to say that Lionel had just moved their headquarters to New York City. Actually the HQ has been there since 2004, when Jerry Calabrese became the president.
I have a hard time understanding why Federal Judge John Corbett O'Meara did not enter a directed verdict overturning the Jury's decision, since the damages were never anywhere near $40 million+ even if Lionel had been guilty. O'Meara's decision was thrown out upon appeal.
Post Number: 2331
|Posted on Sunday, May 11, 2008 - 6:48 am: || |
So it WAS a jury verdict. That being the case,to overturn the jury's verdict, O'Meara would have had to grant a post-trial Motion J.N.O.V. rather than a directed verdict as that procedure ( D.V.)would have been entertained by the Judge following the submission of proofs by the respective parties during the trial itself, and prior to rendition of verdict. Reduction of damages would have been through a Motion for Remittitur. I don't recall if Lionel even went that route.
It's been a good 8 years since I stepped into a Federal Court Room. I hope I got this right.
The Appeals Court action resulted in a new trial, literally starting all over again. The parties then settled rather than continue their battle with another protracted and costly trial.
packman is right. This is hardly a "toy business". And we are all glad that Lionel is back in business, and Joshua Lionel Cohen should be proud. Don't move to NYC,Bob. You're needed here to run those Glancy trains.
Post Number: 688
|Posted on Sunday, May 11, 2008 - 7:51 am: || |
This is the direct result of SMART leaving the city to Livonia.
The loss of good bus service and other essential government services with large tax increases is costing the state of Michigan many thousands of jobs.
I voted to keep SMART, but my vote did not count because of massive state cuts to the crippled people who can not drive.
Learn the real facts about the federal and state cuts to fund the handicapped and crippled. Learn the truth that your property have replaced state funds and your taxes will not get more jobs back or federal funds.
Obviously, unless we work to improve existing transportation needs first, no transportation tax increase of any kind will benefit the taxpayers.
Post Number: 2263
|Posted on Sunday, May 11, 2008 - 8:10 am: || |
Post Number: 366
|Posted on Sunday, May 11, 2008 - 8:22 am: || |
Nobody cares about SMART, Livonia or cripples here. We are trying to learn and enjoy people's knowledge of Lionel trains. (even though I don't really appreciate O gauge)
(Message edited by Shark on May 11, 2008)
Post Number: 2333
|Posted on Sunday, May 11, 2008 - 2:05 pm: || |
Well, trainman has a great handle so I will give trainman the benefit of the doubt. However, I am a tad confused, trainman, regarding the correlation between SMART leaving Livonia and Lionel setting up corporate headquarter in NYC.
In the meantime, I will work on enhancing Shark's appreciation of O gauge, though I favor HO myself.
Post Number: 689
|Posted on Sunday, May 11, 2008 - 10:29 pm: || |
The correlation is tax increase coupled with cuts in government services. It's the high cost of medical care and high union wages for government workers.
Wal-Mart officials in Livonia knew about keeping SMART.
I was there and the top executives of Wal-Mart looked at me with blank stares when I told them about my efforts to help out SMART.
I know that this thread has nothing to do with SMART since New York has high taxes like Michigan. But, in New York they spend 16 percent of their fuel tax on mass transit compared to our roughly 7 percent.
I think trains has to do this thread. So, I'm posting here to get people to understand that railroads do not work without trucks. This is just like passenger rail to buses. You see, without good bus service there will not be enough passengers to support commuter rail. We are too spread out to do this without high mass transit taxes.
So, the correlation is that southeast Michigan government officials SEMCOG really need to do more to get jobs to our regions as opposed to giving great speeches and free pop and cookies.
Post Number: 6800
|Posted on Sunday, May 11, 2008 - 11:03 pm: || |
Don't bother, The_rock... according to Trainman... even global warming is due to Livonia and Smart. He's stuck in a perpetual Livonia/Smart rut... (Autism?) Every SINGLE one of his 689 posts has to do with Livonia and Smart, regardless of what thread they're on.
Post Number: 679
|Posted on Monday, May 12, 2008 - 12:17 am: || |
I was going to make the same observation, but thought I would defer to someone who has been here longer.
Trainman... only 11 more posts about busses, trains, cable cars, trolleys, Livonia, and SMART; and I will take you for a ride in my gas-guzzling SUV!
I might even let you play with the 175dB freight train horn and aircraft landing lights.
Won't that be a thrill for you?
Post Number: 1268
|Posted on Monday, May 12, 2008 - 12:31 am: || |
Train, "top executives of Wal-Mart" have never been to Livonia, Michigan and do not know it exists, even though they have a store there. Anyone directly involved with the Livonia Wal-Mart is not by any stretch any kind of "executive" much less a top one, and is not likely to have enough time in his or her day to even think about things like bus service. They work those unit managers to death, does Wal-Mart.
Back to the main topic though - was Lionel traditionally a Michigan company or did that come later? Also, had they been giving tours in recent years? I know they did in the past but I had got the impression that had stopped some time ago.
Post Number: 2336
|Posted on Monday, May 12, 2008 - 8:21 am: || |
J.Lionel Cowen started his train business in 1900 in NYC. The Chesterfield Twp visitor Center is still going strong with "tours" of its exhibit area (WOW-a real wonderland for kids and adults alike) open during the week and weekends, although they prefer that you make a reservation by calling 1-586-949-4100. They also have a nice gift shop with very competitive prices for their products.
Lionel has had a very fascinating corporate history, the recent litigation being just another facet of it. For instance, in the late '50's since they had always geared their marketing and sales to young boys, father and son, etc. they came out with a "pastel train set for girls" powered by an ivory and gold transformer. All this in an attempt to lure little girls into the fold and, of course, for their daddies to buy them this pretty feminine set and increase sales. Well, it had lots of publicity, but very few sales. The girls wanted the black locomotives just like their brothers had. The pastel sets were soon discontinued. Rare to find them today, although we know a lady who still has a working model. It's probably worth a few bucks and the amount is ascertained by looking into one of Greenberg's Price Guides to Lionel Trains.
To support the Detroit Historical Museum, I'd suggest a trip downtown to see the greatly expanded and improved Glancy train collection.The Forum's Bob Cosgrove is there to both run the trains and answer your questions. I saw the Glancy trains when Mr. Glancy had them running in his beautiful home on Lakeshore Blvd. Since being donated to the Museum ( and surviving a devastating fire), the collection has been refurbished and is really worth seeing.
Post Number: 2265
|Posted on Monday, May 12, 2008 - 8:46 am: || |
Professorscott--the short version:
1900-1969 Lionel was founded by Joshua Lionel Cowen (Anglicized from Cohen) and was headquartered in NYC, their plant was in Irvington NJ.
1969-~1982 Lionel moves to Mt.Clemens (later KA Chesterfield Township), MI to use the facilities of MPC (later KA part of the "Fundimensions" toy combine), manufacturers of plastic model kits. This was to capitalize on the increasing use of injection molded plastic used in Lionel products.
~1982 Lionel (under General Mills/Fundimensions) ships production to Mexico, whole effort is "a train wreck" production falls way behind, return/failure rate skyrockets.
spring 1986 Detroit-area real estate developer Richard "Dick" Kughn purchases Lionel from General Mills/Fundimensions after production is brought back to Mt.Clemens, beginning the Lionel Trains, Inc. period.
1995-present Kughn sells Lionel to Wellspring Associates, a partnership led by Martin Davis. Minority owners in Wellspring include Neil Young and Kughn.
(Message edited by 56packman on May 12, 2008)