Well, Model Power is gone. Not a rumor either.

[dknelson]

This is posted on the Model Power website.  I heard the rumor earlier this morning from someone well connected with the model train business.

Dave Nelson

 

Dear Model Power Customers,

After nearly 50 years serving the hobby industry, our 3rd generation family business will closing effective immediately.

In 2007, our banks began an aggressive deleveraging process. They no longer approved of a profitable and paying client such as ours, which had been reliant on inventory. This is why one of the industry's most extensive lines, had begun to see much of its products unavailable on the market. Now it will no longer be seen at all.

During these past 7 years, we had made changes to the business in order to accommodate and adjust to the changing nature of the business relationship with our lenders. We had offered multiple solutions to our lenders in order to "fix" our situation, all were rejected, came with different restrictions, or offered to little too late. In all our efforts, no arrangements by our lenders would allow for Model Power to arrive at a position in which we could get back to fill our customer needs.

We would like to take the time to thank all of those whom we have worked with the past 50 years. To our customers and competitors within the industry, we thank you.

Sincerely,
The Model Power Family

[G Paine]

While not my first choice for a modeling project, Model Power has been name in the modeling industry for so long. I have used their a number of their products as a basis for kitbashing. Hopefully their product line will be purchased by another company.

[charlie9]

If I had been in business for 50 years and still had to borrow money, I think I would try something else too.  Or just retire.

Charlie

[BRAKIE]

While its sad to hear of a old line company calling it quits it does not surprise me.

MP seem to be a company stuck in the 50/60s and never got up to par like other manufacturers.

I suspect their Mantua Classics tooling dated back to the 50s..I recall the Mantua locomotive kits  way back then and it appears nothing has changed since then.

 

[joe323]

Sorry to hear but I have to agree that MP trains were not up to the same quality as some of the competitors.  For example I was looking at some MP tank cars last week and noticed that they still had truck mounted couplers, though they were knuckle couplers. 

But I will miss the little mini cars and the all metal rolling stock. 

[Medina1128]

Does this apply to the Model Power line that Walthers bought out a few years ago, as well?

[Heartland Division CB&Q]

Marion .... Walthers acuired Life Like .. 

Sad to see an end of an era. I do have a Mantua Classics 2-6-6-2 which serves as my "close enough" model of engines used on the CB&Q Deadwood Branch ... For many years  I had the Mantua 2-8-2's and 4-6-2's. Still have one 4-6-2.  

[superbe]

It's quite remarkable for a family business to last more that three generations so it's not surprising to hear Model Power is closing it's doors. With each gereration there are more and more family members involved and the slices of the pie keep getting smaller.

There's a saying that goes something like this, the first generation makes money, the second protects it, and the third spends it.

Not saying that that is what happened in this case.

They did have very good vehicles, but that's about all of the Model  Power stuff I bought.

Bob

[dominic c]

charlie9

If I had been in business for 50 years and still had to borrow money, I think I would try something else too.  Or just retire.

Charlie

 

Charlie

It is not uncommon for companies big or small to borrow money, even on a daily basis.

Joe C

[steemtrayn]

I'm really going to miss those moveable tanks I keep seeing on ebay.

[cedarwoodron]

The MP cars I have are "fodder" for kitbashing and serve that purpose quite well, but I did notice that their individual car prices, which had been $6.99 to about $10.99, were raised (at least at Hobbytowns in my area) about $4.00 more on average, with some approaching the $20.00 mark. I am not sure if this end-of-business circumstance was not already a forseeable one, hence the markups.

They did sell bulk (25 piece) flex track on Train World's site years ago at a very reasonable price, but that's over now.

I miss Athearn (the OLD Athearn of the BB era) far more than I will Model Power, but it is sad to see yet another name disappear.

Cedarwoodron

[wjstix]

It will be interesting to see if any of their products get picked up by some other manufacturer - there are some items around now in HO that have been sold under several brand names over the decades...for example the Mantua engines, some of which date back to the 1940's era, that Model Power had sold in recent years.

[jerryl]

charlie9

If I had been in business for 50 years and still had to borrow money, I think I would try something else too.  Or just retire.

Charlie

 

People think businesses & buisness operators are rich....not so.  Most all businesses have to borrow to upgrade equipment to keep up. Usually the only money they have is in the business & property.  Most farmers have to borrow yearly to buy seed, equipment or livestock.  It could be that the Bank didn't see fit to lend money for a fading hobby, not because Model Power was not a good customer.

[BRAKIE]

jerryl

It could be that the Bank didn't see fit to lend money for a fading hobby,

Or a fading bottom line..MP wasn't a top tier company like Atlas,Athearn,Intermoutain,Bowser and other top companies.

Its 2014 and MP was still trying to sell locomotives based on 50/60 tooling and cars with truck mounted couplers..

[BroadwayLion]

The last 600 feet of flex track on my layout was all Model Power. Perhaps someone will step in and but some of the toolings and other assets.

But they said it up front. INVENTORY is too expensive. That is why model builders make limited runs.  Build and object and move on. It a retailr wants to stock in their warehouse, then so be it.

ROAR

[snjroy]

Sad news. MP made and imported unique, affordable items. The Mantua line was great from my perspective: the Pacific is a good puller, and its simplicity really makes things easier when it comes to maintenance and upgrades. The logging locos were also great. I hope someone will fill that void.

Simon

[ALEX WARSHAL]

That is truly sad. I bought a lot of their rolling stock, and I do hope that some company buys them or their line.

[Bob Schuknecht]

A couple comments:

I have been in business for 37 years and borrowed money in January to purchase new equipment.

Perhaps the reason so many companies offer pre-orders for new products. It is cheaper to get interest free money from the customer than to borrow from the bank for that next container of engines.

 

 

[zstripe]

Bob Schuknecht,

Exactly! You do not make any money on inventory. The Bank still wants theirs.

Frank

[GP-9_Man11786]

This is sad news. They had a lot of nice, affordable building kits and lighted accessories. They'd carved out a great little niche for themselves. 

[P&Slocal]

It is sad to see a three generation family-owned business go. These operations were at one time the life blood of our economy. No more. I think we will see more and more of this as our economy so-called "improves." My father-in-law owned a lumber yard / home improvement business (for 13 years). He had bought it off the second generation owner who he had worked for since he was 18 years old. The third generation was too bust becoming doctors, lawyers and dentists to care about the family business. The day before Christmas 2012, the bank called his loans. They wanted it all right then and now. He was not allowed to sell off inventory to make a pay until he found a buyer either! The bank, accountant and lawyer are all jerking him around. They had an auction to pay off creditors and sold the building and land after they hired a lawyer. They paid the bank off, but the lawyer wants to sit on the rest of the cash for a couple of years to see what the minimum amount the creditors will take to write it off. I told him to go tell the lawyer to just pay the creditors and be done with the whole fiasco since they have more than enough to do that. The longer they wait the more the shyster...ummm, lawyer will want.

I get a chuckle out of people comparing the "not-up-to-par" companies with the companies that offer top of the line, more realistic stuff. Was Model Power one of the upper echelon model railroad companies? No, but what did they provide? We wonder why kids aren't getting into this hobby anymore. One of the companies that offered a decent starter train set for kids just closed their doors. Think about that when we get to the point that the starter sets are $1000. I get sticker shock every time I see rolling stock that is $30 +...for one car! It had better haul actual freight for that price!

[NittanyLion]

$30 a car is more influenced by the purchasing power of the dollar, average household income, and all sorts of factors.  You know it's not 1965 and $30 isn't really a huge sum any more.  A simple trade paperback book is in the $8.99 window now.  Those were $5.99 just 15 years ago.  VHS tapes (ha) were $20ish back when I was a teenager and now Blu-rays are up in the $35 range.  No kid is being priced out when they're routinely dropping $60 on things with names like Call of Duty Black Ops II and Titanfall.  Same reason my hair cut is $18 (before a tip), significantly more than two bits, and I don't even get a shave any more!

Anyhow, looks like I'll have to try to find the two or three MP houses I had future plans on before they're impossible to find.

[BPoi]

This is kind of sad.  My first train set that was all mine (and not shared with my brothers) was the N-scale "Shifty Sam" set in 1985 when I was 12 years old.  Still have it and bust it out at Christmas, too.

[Doughless]

Well, all inventory financing loans have a maturity date.  Usually only written to last one year.  Upon maturity, the loan has to be paid, or renewed for another year.  It is the time when the bank reviews its position and chooses to continue to do business with the customer, or tell the customer they need to find another bank that will pay off the loan.  If no other lenders can be found, the customer is forced to liquidate the inventory and pay off its bank.

It sounds like MP found no other banks to lend it money, to "take out" it's bank's position.  With no one willing to lend against their inventory, they have chosen to close and pay everybody off.  That's actually very admirable.  A lot of business might have declared bankruptcy.

The apparent fact that no bank would take MP invetory as collateral for the amount of money MP wanted to borrow, says that banks did not feel there was enough value in their products. 

That's something that we modelers also share.  Their product line is outdated relative to the competition.  It doesn't matter that they were profitable.  The bank's probably saw that their inventory turnover was slowing, and that MP's ability to sell enough inventory to pay the loan and interest may be in jeopardy if its line is renewed another year. 

And...in general, this is no longer an inventory-carry business model industry.  It's evolving into a build to order industry.  Companies can get the loan after they get the orders, which is an indication there are customers.  They can't get the loan to carry inventory in hopes that customers show up.  That's seen as too risky these days, especially for a niche industry.

[BRAKIE]

P&Slocal

I get a chuckle out of people comparing the "not-up-to-par" companies with the companies that offer top of the line, more realistic stuff. Was Model Power one of the upper echelon model railroad companies? No, but what did they provide? We wonder why kids aren't getting into this hobby anymore.

Actually the kids I know that is in the hobby wants Atlas,BLI,Genesis with DCC/Sound and they -or mom and pop buys those top tier locomotives..

The hobby never was cheap..Those Mantua Classic 4-6-2 and 2-8-2 was $19.95 back in the 60s and they still wasn't the best engines around...

 

[alexstan]

I wonder if anyone will take up the Mantua Classics line.

[azrail]

Their structures were basically repacked Pola kits, and the locos and cars were a redo of the AHM line.

Hopefully Walthers will pick up the vehicle line, to add to their ex-Boley truck line.

[angelob6660]

I'm going to miss those steam locomotives that they sold. I always wanted to get the Mikado and Pacific (plain and semi-streamline).

[chutton01]

azrail

Their structures were basically repacked Pola kits, and the locos and cars were a redo of the AHM line.
Hopefully Walthers will pick up the vehicle line, to add to their ex-Boley truck line.

I was looking thru a 2013 Walthers catalog last night - after reading this news I wanted to see what Model Power was offering a year ago.
For locomotives, their F7 won't be missed, but I couldn't find if anyone else offered a F2 (if that really was an F2 they offered). The Plymouth critter was OK, and they did offer some nice looking 2-6-6-2 (both Engine+Tender, and Tank versions). The Mantua Steam locomotives added some variety, not sure how good as runners they were.
Freight Cars & Passenger Cars - nothing I was found particularly interesting in, most rolling stock of the 1930s-1950s with some Fantasy liveries thrown in (41ft Railoox and 40ft Railgons? Really now). Possibly a big hit to those modeling the US Civil War era, as Mantua offered a decent selection of 1860s rolling stock (were these ex-Tyco?) which at the very least would make good kitbash material (as a recent RMC article showed).
Vehicles: Model Power repurposed that Kenworth T600  (IIRC) for all sorts of vehicle combos. I could see it fitting into the ex-Boley line (will there be licensing issues - I still haven't seen any GMC's reintroduced into the Walthers' line yet). As for the Vehicles - there was a surprizingly small assortment in the catalog, and a different (but also small) assortment on their website - guess whatever was in the shipping container at that time was offered.
Buildings: Yes, a lot of the kits (and build-ups) look of European origin (because they were) - probably should get the modern bank and supermarket if I can find them - but other kits were definitely long-standing favorites from AHM and others - for example the Farm House (aka Aunt Millies House aka W.E. Snatchem Undertakers aka Hardware store). As for those who say nobody every buys that stock, recall I purchased 2 Townhouse kits (with the bonus Signal Bridge accessory thrown in) just a month or so ago.
M-P also listed a few kits as 'New' in the catalog, including among other things the electrical substation building (which looks properly utilitarian), storage silos (which look cool, but sadly not at the MSRP), and the slightly odd lookin Porta-Potties - with the groaner of a label "IC U-P".

Not sure what currently extant manufacturer would want to pick up these kits, many of which have traversed from IHC to AHM to Model Power.  Back in the day Lifelike would have been my first guess, but under Walthers control I am not so sure.
I know, lets bring back Tyco!

[Metro Red Line]

They will be missed from a nostalgic standpoint, but honestly, I woudn't exactly miss them. I can't run any of their locos or rolling stock on my layout (Well, techically, I can, I just don't want to). The only aspect I'll really miss are their structures, but scores of other companies have since made better structures. I model in N scale and was a holdout until 2006, when I felt N had evolved enough that it was both affordable and attractive for me. But virtually all of model power's trains dn't fit in my layout's quality standards.