Lionel statement to dealers 6/22

[Bob Keller]

We've posted the text of the letter Lionel sent to the dealer network. It is off of the homepage.

Everybody remain calm and breathe deeply, no reason to get worked up...

http://www.trains.com/maghomepage/maghomepage.asp?idMagazine=4

[Anonymous]

Finally, a response from Lionel.

pax[C):-)]

[willpick]

Having read the text of the Lionel statement(on the OGR board [:p]) I was struck by how formulaic it read.
You could have substituted MTH for Lionel and not changed another word[:)]!.
It read(to me at least) like the annoucement you would hear on a cruise ship that just ran aground : "This is your captain [4:-)] speaking- Do not be alarmed! While we just hit a reef, I am assured that no harm has come to our vessel- There is no need to panic, the watertight doors are sealed, we are still afloat, and the crew has exstinguished the fire in the engine room. Please wait for the crew to lower the lifeboats- DO NOT jump overboard"[:)] [:p][:)]
Please- I felt a little levity was needed[:)]- I sincerly hope that MTH and Lionel can settle this whole mess soon.

[Anonymous]

I wonder what took them so long to respond. It will drag on in court for several more years so I doubt if we any immediate change in business.

[Gorgeman]

If Lionel would only make ONE item per year, in the US,
people would buy it .
The only problem is with the company statement,is that
last sentence. It should be corrected to read :

"Lionel will continue to make the best trains made in China " .

[Anonymous]

Lionel's response seems to me quite genuine.

It reminds me of the story in which a fellow is falling \off a tall building. Another man leans out the window and yells to him as he passes:

"How is it going?"

And while rapidly decending, the falling man shouts back :

"So far so goooood!"

Alan

[3railguy]

It kind of reminds me of the Rodney King videos that got America so upset with only one a glimpse of what really happened. I mean Lionel's subcontractor did wrong but it works both ways. MTH's subcontractors have been reproducing Lionel pre and postwar Lionel for over two decades. MTH even put it's name on the boiler plates of tinplate reproduction steamers. Nobody except *** Kughn really cared.

[garyseven]

Too little - Too Late.

Too little...
"We continue to assert our innocence..."
Lionel needs a decent PR firm, and quit using Cut'n'Paste forms from the attached CDROM in the book "PR for Dummies Whose Got Hands Caught in the Cookie Jar."
I may be just a big dumb guy who plays with trains, but, as a stand alone statement - it just sounds guilty. How about " We are innocent, and will to continue to assert that fact."
The rest, sheer boilerplate.

...Too Late
"The recent events have sparked too much disturbing speculation regarding the future of Lionel"
Where was Lionel on Verdict Day or even V + 1?!? Unavailable for comment. E ven a simple boilerplate statement from Lionel would have ended the "disturbing speculation" that we have all read (and authored) on various forums.

All this uust goes to prove my original comment way back on Verdict Day - there's no strong leadership at the top of Lionel. IMHO Someone from Wellspring needs to bring in a wartime consigliere. But even that just may be...
Too little - Too Late.
Don't you think?!? or don't you?!?

[Anonymous]

While I've been under my rock for the last few years, I completely missed the Lionel v. MTH lawsuit. Can some one give me the quick run down of what happened and why MTH sued Lionel?

[garyseven]

dgoodlander
http://ogaugerr.infopop.cc/eve/ubb.x?q=Y&a=tpc&s=63160042&f=57660482&m=848101109&p=1

[nblum]

I'd venture a guess that in the days after the verdict, the small number of Lionel managers involved in these leadership decisions were meeting with, and without legal counsel, and with Wellspring representatives to plan strategy, examine options and continue to do their day to day jobs. I don't think the difference of a few days versus a few weeks makes any difference in how consumers or dealers now view Lionel or their future. Some uncertainty is now in the mix whatever Lionel says or doesn't say, until a final verdict is announced and the appeal commenced.

Indeed, I was assuming there wouldn't be a public statement until their strategy was determined, having been a bystander to similar legal matters. In fact, usually what you get is a terse statement to the effect that "the jury/judge made a mistake" and "we will be victorious upon appeal," full stop. This statement by Bill Bracy represents not only that content, but a low key declaration of defiance and resolution. And a subtle knock on MTH as a copier and purveyor of subtle disinformation.

The people at Lionel, understandably, believe they were screwed by a jury that didn't fully understand the issues and the law, and plan to soldier on and hopefully reverse the decision or reduce it. Nothing shocking or surprising to those of us who have followed the case for 4+ years.

[garyseven]

Neil opines:
"I don't think the difference of a few days versus a few weeks makes any difference in how consumers or dealers now view Lionel or their future."

Then why send the letter now, if at all?!? ?!?

In the letter, Lionel states:
“The recent events have sparked too much disturbing speculation regarding the future of Lionel.”

IMHO - Obviously, Lionel is trying to change consumers or dealers view about Lionel, or Lionel’s future that have been alowed to propagate do to "recent events."
Neil, help me to understand that the “disturbing speculation” would not have been, at least lessened by any sort of positive release by Lionel soon after the verdict. After all Lionel had 4+ years to think proactively.

I just don’t see it.

[willpick]

Garyseven, Neil sees things differently[:)], due to the fact that he only sees in two colors: Orange & Blue. Having read his postings on AOL (where I finally filtered him) and on other forums, I tend to ignore him as much as possible, as the content never varies much[:p]. He has his opinions, i've got mine, and that's that.

[nblum]

I think that many, including myself, upon the shocking revelation of the jury's bizarre decision, wondered about Lionel's future. People are still wondering about Lionel's future. There is little Bill Bracy or anyone else can do about that, as events in the future will determine whether this decision injures Lionel or not, and how severely. I don't see how any of that speculation would have been altered by this letter appearing the same day as the jury verdict. It may, of course, be mildly reassuring to read this letter, and nice to know that an appeal is planned. But the letter would have provided no more or less reassurance two weeks ago than it does today. The appeal had not been decided upon two weeks back and its announcement had to wait until now. Words don't matter much here is what I'm saying, although some comment was obviously necessary. Timing means virtually nothing in this instance, in my opinion. The speculation Bill Bracy refers to would have occurred one way or the other, and will continue until resolution or weariness and time intervene.

As for Willpick's comments, they don't merit any attempt at intelligent comments, except for the obvious one that they represent ad hominem arguments of no merit and without content relevant to the discussion. I'd venture it is of little to no interest to anyone here who he has and has not filtered on AOL. I certainly find it irrelevant to the discussion and life in general :).

[Anonymous]

I don't agree that the timing of the message is critical
and that there is a "hidden agenda" in the message because it did not occur one day after the verdict but instead a few weeks later. That in itself doesn't alter Lionel's message.

Defendants need time to reflect and consider after a $40 mill verdict is sent against them . As Budda said,
"Don't just do something....stand there!"

Ok so we now know that Lionel intends to fight. Overturning a jury verdict is usually difficult because they are the tryer of fact. To do so you must show on appeal that the judge erred on his instructions to the jury or that evidence presented was faulty based on lies. (see Martha Stewart trial appeal)

And, if the judge agrees, the amount will be lowered in any event.


Alan

[garyseven]

AlanHN states:
"don't agree that the timing of the message is critical
and that there is a "hidden agenda" in the message because it did not occur one day after the verdict but instead a few weeks later. That in itself doesn't alter Lionel's message.]"

I missed the part about "hidden agenda." How was that somehow implied or content relevant to anything posted? The agenda of the letter was to - as they say - "Rally the Troops." Nothing hidden about that. AlanHN did I miss state something?

[Anonymous]

gary7

I thought YOU were implying that!??

No! Okay then no hidden agenda by Lionel

Alan

[garyseven]

Neil
Thanks for your reply. I do have some education and experience in business crisis management and disagree that "Timing means virtually nothing in this instance." From what I know, time, and lack of proactive, strong, direct and honest leadership can, and will, turn a crisis into a catastrophe. I none-the-less appreciate your opinion.

[nblum]

Scott, I couldn't agree more that leadership is important in this situation. No organization is ever any better than the leadership at the top.

I think we are disagreeing as to whether the two week +/- delay in Lionel's public response (1) makes a difference and (2) reflects subpar leadership. The jury (so to speak) is still out on number 2 since we don't have an outcome yet, but I'll stick to my contention that the answer to to number 1 is "probably not."

[Anonymous]

For what it's worth, I think it would have been better if Lionel had prepared & released a short statement. They should have prepared two statements before the verdict came in, one for each possible outcome. You know, if they won, "We were vindicated and we told you so", and if they lost, "We are saddened with the jury's verdict. Rest assured, we have begun to explore our options ...."

At the least, we could have avoided this whole argument if that had happened [:D]

Just kidding with ya, guys.

Tony

[Anonymous]

Guys I would never advise a client to prepare two statements on a possible outcome; both could be mis-used and would be discoverable at an appeal.

Second, you've just been hit with a $40 mil judgment; you dont want to just react to this; and say something like I'm going to DisneyWorld, you need time to prepare a response that is not going to bite you later on.

Finally, you dont want to give anything away that will give comfort to the enemy and have him thinking you are weaker and in an even a poorer negotiating stance.

Alan

[garyseven]

AlanHN
Decent crisis management and public relation firms deal with giving the right crisis response. Wellspring/Lionel needs such representation.

[nblum]

The bottom line at present is that the events of the last month will probably not result in any more or less sales to customers or orders from dealers for either MTH or Lionel . This hobby is so polarized both at the trade and consumer levels that nothing short of someone going out of business will alter the sales dynamics in the short run, in my opinion. That's why I say a few weeks one way or the other makes little difference in the announcement. Public relations to the dealers, distributors and consumers consists not of damage control but in passing on information in this particular slow moving crisis. Sure there are a few Lionel customers who will stop buying Lionel because they think Lionel did something wrong, but there are also some folks who will stop buying MTH because they disapprove of what MTH has been doing. At the consumer level, right now, except for sound and fury, it all signifies very little at this point.

[Anonymous]

Alan:

More than half my post was intended to be tongue-in-cheek, but I do see your point. You bring up some very good points.

In any event, the judge still hasn't ruled, so we still have to wait.

Tony

[Anonymous]

G7

Are you saying I'm indecent?

Crisis management and PR are fine when you have a crisis, but they don't try cases and hopefully don't give legal advice. The crisis was when there was Lionel's perceived viability to continue to function under the threat of a judgment. Lionel's PR worked very well over the past four years. Many continued to buy trains. Once the judgment was read, that crisis ended.

Now during the appeal process, they need to continue the status quo without letting MTH smell any fear. By waiting like they did, the impression is that they are not afraid and just jumping in with a response and instead LIONEL was very circumspect about a response and that there is no crisis. No worries. A genuine thoughtful look at the results of the judgment and that they disagree and are reviewing options. No crisis that needs managing!

Alan

[garyseven]

AlanHN opines:
"Crisis management and PR are fine when you have a crisis, but they don't try cases and hopefully don't give legal advice."
Yes AlanHN, you are correct! Judges try cases and lawyers give legal advice. There are two courts. Crisis management and PR are for the "court of public opinion."
"By waiting like they did, the impression is that they are not afraid and just jumping in with a response and instead LIONEL was very circumspect about a response and that there is no crisis. No worries. A genuine thoughtful look at the results of the judgment and that they disagree and are reviewing options."
I do consider a judge upholding potential 40 million the slings and arrows of a crisis!
Wellspring needs to bring in a wartime consigliere. We will see if current leadership will step up, is up to the task or if Wellspring will make the change in the future.
Perhaps waiting two weeks before this "boilerplate" statement signified nothing, or speaks volumes. My bet is on the latter.

[Anonymous]

Nothing new here. You're all repeating the same stuff found on the OGR forum.

[garyseven]

Yes M. DONALDSON, you are correct! I have been asked to repeat things I write there, here. I really don't understand the motivation, I guess some just like it that way so they don't feel like they are "missing out" and I never asked. That is in the specific, in the general we are discussing the same stuff here others discuss over at OGR. I guess the discussions are becoming old and tired. Old and tired, just like me! Oh well.

[Anonymous]

M. DONALDSON

Gary's right on point. We are obligated to repeat the things said in OGRR’s Forum because we know that the only really free thinking going on, takes place on that RICH-censored forum;

So just call us peat and repeat, but not late for Dinner!


Alan

[garyseven]

I wish I had more time to spend on both forums - I like them both.
I wish I had more money to spend on both Lionel and MTH - I like them both too.

Gee, where did I put that magic lamp???