Faller Files For Bankruptcy

 hate to hear it but i can't help.  all i ever bought was their glue.

grizlump

Reply attempt #2

I stated that one might need to stock pile the building kits from these guys as they not only built up well but they made good kitbashing fodder---the scenery stuff was good as well----

In my 20 years in the hobby, I don't think I've ever bought anything from Faller.  I don't model European roads, and their kits are, well, European.  Half timbered buildings?  Old town walls?  Modern German Army equipment?  Do you really see a heckuva lot of Faller items being used today on new layouts?  I've seen several older layouts that used such items extensively, but that's when there was nothing else available.  Walther's Cornerstone line kinda put the kibosh on that.

It's too bad they filed for bankruptcy, but I wouldn't call it "very significant", at least in our hobby on this side of the pond.

Paul A. Cutler III
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Weather Or No Go New Haven
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Hi from Belgium,

We dont' have heard nothing about that here, but if it's confirmed it's anyway something very bad for the train industry.

Faller is a very big manufacturer, it includes the line of the Pola models or for you in USA some of the Model Power buildings.

The lost of Faller is not a good news for the train industry even if it's a European maker.

You could consider it as one of the "major" model builder in the industry like Marklin which is not on the good way as far we know.

So the lost of Faller or an other big manufacturer, fom the USA or from Europe, is never a good news.

If they confirm the decline of the sales as the reason of the bankrupcy  it will also confirm somewhere  the declin of our hobby.

Marc

 It was in the news on Friday!

Faller was founded in 1946 as one of the first businesses providing structures and accessories into the growing hobby market. As Marc stated, there is much more to Faller than we think of. They are not only a producer of German/European prototype structures. Many a kit that you could buy in the US under various brand names actually was manufactured by Faller.

 To say that Faller finally had to succumb to the global financial crisis would only be partly correct. The reason why their sales were dwindling over the last years is manifold:

• Less spendable income meets constantly rising prices
• Aging customer base and failure to recruit younger people
• " Wrong" range of products, neglecting the changed needs of the market for structures of different than southern German prototype
• "Wrong" scale - not exactly to !/87 scale structures and last but not least
• "Professional" management with no attachment to the market
  

 Faller will most likely be saved - just as Marklin will eventually be. Filing insolvency is the way to get rid of your unwanted staff which has been loyal to the company for decades, without having to pay severance money.

A sad story, indeed!

Paul3

 In my 20 years in the hobby, I don't think I've ever bought anything from Faller.  I don't model European roads, and their kits are, well, European.  Half timbered buildings?  Old town walls?  Modern German Army equipment?  Do you really see a heckuva lot of Faller items being used today on new layouts? 

 Even if you don't use their German style buildings, Faller make a lot of scenery stuff that quite a few people use both in Europe and in the US -  people and animals, stone/brick sheets and tunnel portals, ground cover, ballast, snow, fences, roads and such stuff. They also have excellent styrene glue in bottles with a nice needle applicator that I have been quite fond of :-/

  Don't know if their bankruptcy also will take out some other brands they own. Faller also owns (among other things) the brands Aztek (airbrushes) and Modelmaster (paints).

 Stein

There were some things that are not necessarily just southern German in form---there is/was a concrete mixing plant, some of the factories were more old in appearance, some newer structures--service centers, miniplaza types----there are people, scenic supplies---and with the connections between Modelmaster and Aztec( those may be spun off to satisfy some of the debt load) there may be some effects.  Leavenworth WA has some buildings in its downtown that do have that southern German flavour--so it may not be totally off as to prototype something like that on one's layout.

As for the "professional" management--this comes about when certain managers forget--as opposed to "remember"---that the business is there to supply goods/services to humans. First comes the service/good--and the effort to BUILD UP the customer base then one invests in the business as one makes the profit---and et cetera so on--

Does Faller, like many European manufacturers, do its production in Europe?  This may be part of the problem.  As much as we hate to admit it, most of the "healthy" manufacturers in this business have outsourced a lot of their production to China.  It keeps costs down and allows them to charge less for the finished products.  Of course, it also sends jobs overseas along with the production, which is the other side of the equation.

Hopefully, with the economy slowly mending, companies like Marklin and Faller will be able to pick up the pieces and come back in some form.

That may not be necessarily so. In a recent article I came across in a trade jounal in the electronics industry ( journal in this case was EP&T---electronic products and technology). The thing now is that while it may seem cheaper to do the mfg in China say, there are hidden costs that many people in this line are now saying were there---they are mostly relating to the issue of doing this on price factors alone---

• cultural differences/interferences
• interpretation hinderences
• time zone constraints
• proximity delays---supplier in India cannot send needed parts to Chinese mfg due to material shortage
• privacy/piracy issues---this particular thing may have been part of all the legal issues surrounding MTH/BLI etc
• handling delivery damages--sound familiar?
• quality obstacles
• lead time concerns---pre-orders taking how long to come to customer?

There might be another way---contract mfg within the local area.

I have to agree with Paul on this one, I won't miss them. Never bought any of their stuff. Scenery materials always seemed too expensive, building never even looked like good kit bash fodder.

No offense to our friends in other countries, but the loss of Faller, Marklin and others making European prototype products has no effect on my hobby.

Marklin/Trix is another company that never saw a penny from me. PA1's with pilots that swivel like a Lionel toy? I think not on my layout. Coupler pockets that are too low for correct North American prototype, again I think not, especially at the prices they asked.

I don't care how much "smaller" the world may be getting, European model railroading and North American model railroading are just that, worlds apart.

I like trains of all types, BUT, like all of us, time, space and money are limiting factors. Even if my time space and money seems like a lot to some others. I have a narrow set of goals which I intend to fullfill. To do that I limit my purchases to items needed for the planned layout and I focus my learning/knowledge on those areas, regions, era, type of railroad, etc that are most interesting to me and the subject of my layout.

I don't have any other scales, gauges, foreign prototypes, etc,etc, sitting in display cases. I don't collect. Heck, I model the Mid Atlantic of the USA and I don't even have any locos lettered for any west coast roads like UP or SP. Why would have any thing from Germany?, England?

I used to be well rounded until I learned what I REALLY like.

But what do I know, I'm just a hick with a pickup, a gun and a few trains.

Sheldon

I will disagree with some about Faller.

The cost in the USA is dependent on exchange rate. At about 1.5 USD to the EURO there stuff is expensive. It has not always been this way and in the future this will go the other way as it always has.

The brick factory buildings represent buildings built during the 1800's and very early 1900's. At that time the best technology to build large brick factory buildings was European and hence the similarity. You can leave off some of the fancy ornamentation and use a solid brick color to make them right at home.

Brick factory buildings built in the civil war era and late 1800's had a great deal of brick detail. Plain "Jane" brick curtain is new technology architecturally and was started about WW I. There are many exceptions but don't overlook these Faller brick factory buildings. You drive arround any large Northeastern city and you see plenty of examples of these fine buildings.

Chris

ATLANTIC CENTRAL

But what do I know, I'm just a hick with a pickup, a gun and a few trains.

And you do have that cabin up there in the woods?

 --------------------------------------------------

The thing is just that---go after what YOU are looking for. If there is no adjustment on the side of the business then------

You after all are part of the market----and if the mfg does not change to meet that market ----

ATLANTIC CENTRAL

I don't care how much "smaller" the world may be getting, European model railroading and North American model railroading are just that, worlds apart.

Sheldon

Unfortunately, not a true as you might think, Sheldon. What has happened to Faller, plus a whole host of other major European hobby manufacturers over the past decade or so, is indicative of what's going on with the hobby world-wide. The only real difference is that the model railroading hobby in Europe began to decline well ahead of that in North America. In large part, this was due to the ever escalating pricing that wouldbe European hobbyists faced in their modeling products pretty much across the board. I'd speculate that European models have recently been priced around where you'll probably see our own in about 3-4 years. Faller and the rest may have blamed a shrinking marketplace for their woes but you can't expect to bring many new people (particularly younger folks) into the hobby with prices set at astronomical figures. So, the market shrinks further and manufacturers limit production and raise prices in hopes of staying afloat. It's a vicious cycle with only one possible outcome.

CNJ831 

Here is why this is bad news for all of us.  Someone wanting to launch or expand a model train business will go to their bank, which of course will know nothing about the hobby but as part of the due diligence will do a Dun & Bradsteet on the industry, and note comments like those attributed to Faller about the decline in the model train business (making no distinction between the faltering LGB/Maerklin/Faller and domestic US companies) and decline the loan or impose harsh terms.  This helps none of us.

I might mention that if you go to cities with heavy German populations, Milwaukee and Cincinnati and perhaps Pittsburgh some to mind, you'll see plenty of buildings that look like they came out of the Faller pages of the Walthers catalog. I think there is plenty of stuff in the Faller line that is well worth investigating and I guess now I'd better check the catalog and think about what I need.

But I admit, there are some buildings in those catalogs that have no American counterpart that I am aware of.  But Walthers gave them catalog space for years, to virtually the entire line, so I have to assume someone was buying them. 

It has always seemed to me that the German manufacturers combined a limited view of the hobby with a strange attitude towards competition.  Although there are some superb European modelers, for those most part you see almost toylike looking track plans -- by which I mean fixed radius curves coming out of perfect tangents -- coming out of Germany, for all the advanced electronics and watch like runnng characteristics of the trains themselves.  As if something about flex track upsets their notions of form and order.   It is hard to imagine any of the German manufacturers getting to a modular type construction or actually crafting their kits to encourage kitbashing.

And frankly some of the prices charged for Faller (and Kibri) structures have seemed way, way out line given the age of the tooling and the nature of the structure.  That this is not a matter of European costs being higher or the cost of importing, by contrast I think the prices for Heljan buildings remain very reasonable.   The Faller tooling was for the most part already paid for.  When your pricing is based entirely on how much money you'd like to make, versus looking at what else the consumer could purchase instead and at what price and try to meet or beat that, you have a problem that, yes, is very likely to end in bankruptcy. 

Dave Nelson 

blownout cylinder

And you do have that cabin up there in the woods?

No, actually it is a 3800 sq ft Queen Anne built in 1901, in a little village that was once a stop on the Maryland & Pennsylvania Railroad. And it is fully restored to all its Victorian splender and detail. But it is well defended. I have an excelent view of anyone approaching from the third floor windows of the corner turret.

Sheldon

dknelson

It has always seemed to me that the German manufacturers combined a limited view of the hobby with a strange attitude towards competition.  Although there are some superb European modelers, for those most part you see almost toylike looking track plans -- by which I mean fixed radius curves coming out of perfect tangents -- coming out of Germany, for all the advanced electronics and watch like runnng characteristics of the trains themselves.  As if something about flex track upsets their notions of form and order.   It is hard to imagine any of the German manufacturers getting to a modular type construction or actually crafting their kits to encourage kitbashing.

Dave - true words!

But those fixed radius curves is what you will find on your average 4 by 8 table top layout as well... 

German houses are much smaller, so we have to work with tighter radii and turnouts -  , but we all dream of a train empire. Can you imagine the immense cultural shock for me, when I opened up my first copy of MR in 1969, seeing layouts like John Allen`s famous Gore & Daphetid. Here I was, stuck with that 14" tin track from Marklin...

Paul3

In my 20 years in the hobby, I don't think I've ever bought anything from Faller.  I don't model European roads, and their kits are, well, European.  Half timbered buildings?  Old town walls?  Modern German Army equipment?  Do you really see a heckuva lot of Faller items being used today on new layouts?  I've seen several older layouts that used such items extensively, but that's when there was nothing else available.  Walther's Cornerstone line kinda put the kibosh on that.

It's too bad they filed for bankruptcy, but I wouldn't call it "very significant", at least in our hobby on this side of the pond.

Paul A. Cutler III
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Weather Or No Go New Haven
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Paul,I could not agree more.I have never bought a Faller kit because they look to Eurpean to be used for a America city or industry.

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dknelson:

CNJ831

In large part, this was due to the ever escalating pricing that wouldbe European hobbyists faced in their modeling products pretty much across the board. I'd speculate that European models have recently been priced around where you'll probably see our own in about 3-4 years.

Hopefully, that's not really the case.  European models, like pretty much anything manufactured in Europe, contains a lot of built-in costs which support the European "social safety net."  Value Added Tax (VAT) structures add taxes at each step, from raw materials to delivery, which all get folded into the price of the products.  Lacking these "hidden" taxes in the US, we can manufacture things cheaper here and thus sell them for less.  Of course, we have higher labor costs than China, so it's cheaper still to make stuff on the other side of the Pacific.

MisterBeasley

[Value Added Tax (VAT) structures add taxes at each step, from raw materials to delivery, which all get folded into the price of the products.  Lacking these "hidden" taxes in the US, we can manufacture things cheaper here and thus sell them for less.  Of course, we have higher labor costs than China, so it's cheaper still to make stuff on the other side of the Pacific.

VAT does not add to the cost of product at each step - it is a sales tax, which the end customer has to bear fully. Though all purchases are subject to VAT, the tax paid on raw material or semi-finished products can be reclaimed. Labour cost may be a different issue, but it is a less important issue as most people think - productivity is the name of the game! The main reason for those high prices we see in Europe is greed!

MisterBeasley

  Of course, we have higher labor costs than China, so it's cheaper still to make stuff on the other side of the Pacific

Mind, if you are only thinking of the labour costs the hidden costs of the outsourcing to another country/continent --again such as QC, Privacy/piracy issues, Interpretational costs, lead time concerns will tend to muddy things up. Remember --- the Quality issue is always a problem when you have to monitor that company's site---as they do not always have an interest in sharing your agenda. They have their own agenda as well.

Besides--what is the going wage of someone in this sector in the first place? These people who did the mfg here IN the hobby sector were not getting the same as Ford/GM/Chrysler workers---- 

 I think it may have a lot to do with their failure to adapt to the US market.  As has been discussed amply here and elsewhere, modelers in Europe are subject to significant space restrictions, so they're not going to buy in the kind of volume that we can, and with the ever increasing quality and quantity of US prototype models, both from the likes of Walthers and the myriad of cottage producers, US modelers are just not going to buy very euro-looking designs and try to make do with them.
When I was a kid, all you could get were Faller, and to a lesser extent Vollmer and Kibri kits, also very European.  Model Power and a few other lesser players were about, but Faller was definitely the big dog.
I'm also guessing that they sunk a bundle into the development of that trackless vehicle system, and it just hasn't taken off the way they'd hoped due to the stalled global economy.  It's a really neat product, but it's just not a high priority for many model railroaders.

I'm sure that the name brand will survive, but in what form remains to be seen.

Lee

Sir Madog

" Wrong" range of products, neglecting the changed needs of the market for structures of different than southern German prototype

I agree. Most of the Faller stuff was cheap German buildings that I would have never used on my American layout. We are truly worlds apart as another poster mentioned.

There is so much better stuff out there that I certainly won't miss them.

CNJ831

Unfortunately, not a true as you might think, Sheldon. What has happened to Faller, plus a whole host of other major European hobby manufacturers over the past decade or so, is indicative of what's going on with the hobby world-wide. The only real difference is that the model railroading hobby in Europe began to decline well ahead of that in North America. In large part, this was due to the ever escalating pricing that wouldbe European hobbyists faced in their modeling products pretty much across the board. I'd speculate that European models have recently been priced around where you'll probably see our own in about 3-4 years. Faller and the rest may have blamed a shrinking marketplace for their woes but you can't expect to bring many new people (particularly younger folks) into the hobby with prices set at astronomical figures. So, the market shrinks further and manufacturers limit production and raise prices in hopes of staying afloat. It's a vicious cycle with only one possible outcome.

I don't believe any of that for one minute. Economic conditions in Europe are the result of socialism, 12 weeks of "holiday", etc,etc. All topics that are not approperate to discusse here. The only way we are priced out of anything is by letting the rulers take everything.

And first they will tell us how great it is, then Ullrich will tell us about smaller houses and 14" radius. Seems to be a contradiction in my mind. I will keep my big house, my 800 sq ft layout, 36" radius curves and my "risky" "Capitalist" life, thank you very much.

I will keep my guns, my money and my freedom, you can keep the change.

Sheldon

 Faller is a nostalgia line for me;  I recently restored a Faller Shell gas station from c. 1954 for display on a shelf full of cold-war models, including some  Regulus missiles and my old Revell moon rocket (the ultimate Revell collectible kit, it seems). The gas station looks like a typical American fast-food joint from the 1960's, like Dairy Queen (yes, that modern design came from Germany; can you say Bauhaus?).  So I'm sad to see Faller go, but like the rest of the crowd here, I found most of their buildings a little too Euro for my taste, even the all-brick industrial structures, even with my socialistic political leanings and my commie-pinko hippie past. 

I also had a very American postwar, suburban ranch house by Faller, but it long ago was broken down into scrap (fieldstone pieces here, shingle pieces there), as my taste runs to 1945 or earlier. Not every Faller building was German or Eurostyle, not by a long shot.  That ranch house would be right at home in a subdivision on a post war US model railroad. 

 I am sad to hear of Faller or any major player in the hobby going under.

And for those who say no loss, never bought their products they did not fit my US layout, you are of course entitled to your opinion but remember that the hobby exists outside of the US and their products are important to others.  And their US presence must be relatively substantial given the amount of space they get in the Walthers catalog year after year. 

 Hello,

great topic and also some great points have been brought out to the fore front.  

No matter what the product or where it is made if a manufacturer of products for this hobby has financial troubles like Marklin/Trix, LGB, Roco or Faller it has repercussions for everybody around the globe.  As Ulrich pointed out there are a lot of reasons as to why products over there are more costly to purchase then over here.  Unfortunately it is my belief that these prices will be coming to America as well.  One of the reasons will be fewer players, just a few huge companies flexing their muscles.  As an example look at Bachmann,  Walthers and Hornby and how these companies have gobbled up other companies. 

Our models of North American prototypes are made in Asia for the most part.  How long will it take for our prices to go through the roof just due to exchange rates alone?  The item that keeps our prices lower on locomotives and cars is that they are limited production runs which is not the case with European manufacturers.  So even though it is not very nice for the modeler to have to put up with these limited runs it does keep the costs of the product lower.

Lets hope that we get to continue to enjoy this price advantage over our European counter parts for a long time to come.    This actually enables me to have an excuse the next time the lady in my life asks me as to why I bought that freight car or locomotive, it will be to keep the my favourite manufacturers afloat.

Just my  worth.

Frank

The whole thing about the way economics works in europe vis a vis the N.American market---never mind the N.Z/Australian market---is interesting here. Besides the issues that Sheldon raises and my scribbling about the outsourcing issue there are some other quibbles to ponder.

• When a company starts buying up another company----some market types have started asking what happens to competition and its role in keeping prices down
• Issues around how to GROW a customer base---growing a market vs this --- lazy method of pushing prices up and sitting wondering why the market ain't buying
• Questions around the supply chain---and how does one manage a much more complex scale in those terms.
• Are labour costs as high as claimed---don't laugh, these questions are getting asked in some circles-----even in my business.

I have only a question around this---if we keep seeing more people going out of business in this area---will we have enough modellers and curious people willing to explore going into this field to GROW the hobby? Try to imagine what it must have been like to be in a depression and trying to get a HOBBY BASED industry together in those times----

Getting back to Faller, I took a look at the Walthers 2009 catalog to see what they distribute - they really do have the Carnival/Fun-fair niche almost sewn up (not my interest, but you must admit those models look fantastic when animated and lit up).  As for their scenery, if Faller goes under I hope Busch & Noch can get their trees and hedges - nice looking enough, but wow 3x the price of comparable Busch/Noch products. They also seemed to have introduced a lot of scenic details such as tables, street lights, barricades etc, and a few interesting ones such as ATMs and soda machines, but at very high prices. As stated before, they do carry a lot of building/road sheets (brick, coblestone, blocks, etc),prices are somewhat more reasonable here - and they also carry a nice selection of tunnel portals - except all their portals seem to be horseshoe shaped in profile, curving back in toward the bottom - I don't think that design was common in North America.
The structures, especially the older ones, are most definitely Central European in design, and look it - however, the more modern ones (like the Aidi Supermarket) can be readily adapted to North American practice (actually not all that many seemed modern).
The figures, eh, Presier & Mertan among others have that covered, but if you need a German military base with obstacle course, then Faller is your go-to place (did they really have Boot-Washing stations for the troops?)
They were really pushing the car system in that catalog, and lots of lighting and other animation (smoke units?), plus some other items I am not bothering to list.
So, while I feel it would be best for Faller to continue on under reorganization, it looks like large amounts of their current Faller branded line would readily integrate into their competitors' lines. (Maybe bag the car sytem?) 

Sorry to hear about Faller.  At least I got this before they went under:

"American?"  Probably not.  "Americanized?"  Yes.  Only other steel arch  bridge I can think of costs around $2000.  This one cost about $80.  It does what I need it to.  Thanks, Faller.  Frankly, I'll miss you.

Tom