Could Mike Wolf end up owning Lionel?

[MartyE]

If Mike ended up Lionel, she would be in good hands. Let me preface by saying that it is not what I want as competion is good for the hobby. But lets face the facts...

Mike has been doing this longer than I would say 95% of the people at Lionel now.

Mike loves this hobby and is personally involved. I can't say the same with current Lionel management. I get the impression with a lot of them it's just a job.

I've never seen Mike not enthusiastic about his product and the hobby and knows his product. Lionel reps have been stumped at the easiest questions with few exceptions of Todd Wagner and a few others.

That being said I do hope Lionel remains it's own enity but if Mike were to get it, it could be a lot worse hands and quite possibly better than what it is today.

My 2 cents.

[Anonymous]

Frankie CSX:

Good choice but I think Jerry Williams is busing doing his own thing.

Thank God for Jerry Williams. If it weren't for Jerry Williams we would not have Mike Wolf.

BillFromWayne
www.modeltrainjournal.com

[MartyE]

Also if he does end up owning Lionel, would it be Lionel by MTH or MTH by Lionel? Or any other manufacturer that might end up with the Lionel name? Oh well just speculation after all we are a long ways from any of this I'm pretty sure.

[Anonymous]

[:D] Mikes Lionel Train House [:D] coming soon[^]

...keep the rails polished...

[Anonymous]

I not only think that Mike Wolf will end up owning the Lionel name, but I will be amazed if anything else happens.

Lionel owns nothing as a company. They don't own TMCC, Neil Young and his group control that. They don't own any of their tooling as far as I can tell, all that was subcontracted and that is what got them in this mess in the first place. If my information is correct, they don't own their home offices any longer.
They do own QSI, Fast Track and some tooling for their general product line, though I feel they might have them on a lease purchase agreement to their asian manufactuers.

I would be hard pressed to bring the above value in at more then ten to fifteen million.
But, the Lionel name could go for probably twenty-five to forty million.

Now we must consider Lionel present, secured debt of thirty million. That was made last year I think. From what I read and have been told MTH gets first crack at the assets because they where wornged by the debtor in a criminal action.

Remember that people in Korea went to jail because of this crime and the officers at Lionel where named as co-defendants, or at lest co-conspirators in that case.
South Korea is a `member of the international trade agreement thus provideing MTH first bids on the net worth of Lionel.
Of course the banks will get something I'm sure and the Lawyers will get paid. But, even after a possible settlement reduction of five to fifteen million bucks the only smart thing for MTH to do will be to ask for the name after all their bills are paid.

The only thing that can stop this prosess is a reversal of the reward and don't hold your breath, or Well Spring can unloade Lionel for about fifty to sixty million, then file chapter 11, on Lionel LLC.
The latter solution is doable if they can find a company with deep enough pockets that wi***o get into the over crowded toy train market.
If you had that kind of money to invest would you wont to go up aganst MTH, K-Line, Atlas, Weaver, Williams, 3rd Rail, not to mention the growing s-gauge line? I don't think so.
Other then Marklin or LGB there are not alot of people out there who can aford it and have the know how to compete with MTH and K-Line head to head let alone all the other niche market specialist we have vying for our dollars.

I think the banks will insist in the bankruptcy court, that MTH get control of the name and it's intelolectual rights if MTH agrees to return them their monies as contracted by Lionel because Mike Wolf is the only act in town that can get the job done and has the market position ti come out on top. In this way the banks will recoup more then the ten cent on the dollar the court will grant them on an total liquidation.
Of course, as stated above the final numbers will be hammered out by the lawyers, but in my very humble opinion, that is where this will go.

Keep on Tracken,
Mario E.

[Anonymous]

The following interview with Mike Wolf was conducted on September 6, 1997 at America's Best Train & Hobby Shoppe in Glendale Heights, Illinois:On the occasional rumor that Mike is purchasing Lionel:

"I can tell you 100% there's no truth from my end. I have no contact with Lionel. Nothing. I hear rumors too. There's a lot of rumors in this business. I've never spoke to Lionel's president [Gary Moreau, at the time of this interview]. I don't know him. We're competitors."

[MartyE]

OK That was 1997 and this is 2004. Circumstances have definitely change.

[Anonymous]

MartyE, I know the circumstances have changed. Was just thinking about that article. We'll see if this still holds true or not. MTH Lionel Train House?


...keep the rails polished....

[Anonymous]

You know what is great about these events, its that we are enjoying a ring-side seat.
Remember the movie, " The Man Who Saved Christmas". We'll maybe they will make a movie, "How Mike Wolf Saved Lionel"

Bill
www.modeltrainjournal.com

[CSXJOE]

Lionel +Railking = LionKing

[garyseven]

Worktrain says:
" They do own QSI"

?!?[?]

The one in Beaverton, OR about 3 miles from my house?

[nblum]

One, Lionel most definitely does own the rights to both TMCC and Railsounds. Liontech no longer exists as an independent entity. Two, Lionel most definitely does NOT own QSI. They have licensed their patents but QSI is still owned by Fred Severson and Pat Quinn to my knowledge. QSI is the plaintiff in a patent infringement suit awaiting trial by jury in Oregon Federal District Court. QSI is also the defendant, along with Broadway Limited (an HO manufacturer/importer) in a more recent patent infringement suit by MTH.

[Anonymous]

Hi garyseven, yes, Lonel bought QSI and all their technologies. I think it was about two years ago during the *** Madox era. That was right before the QSI law suit aganst MTH.

I always thought that was deversion to try and go tit for tat with the MTH action.

With the QSI system being an analog based system and the DCS system being a pure data system I can't understand QSI's clame, because everything down to the clock cercuits had to be reworked to produce DCS.
That is why the primer control systems could not be up graded to the DCS system because the DCS system had to clock off of the fly wheel bar code and that was used in conjunction with the internal clock of the on board DCS computer to report the enigines position and speed back to the TIU.
I know there is an up grade coming, or it may may be here now but I have no information on how it works or if it is any good.

Keep on Tracken,
Mario E.

[Anonymous]

I"d be interested to know how the engine knows where it is on a layout so it can tell the TIU. I can see it telling the TIU how fast it's going, but how exactly would the engine know where it is? Nothing I've read about DCS indicates anything about knowing where a train is on the layout.

And I'm not sure which QSI Lionel may have bought, but there does seem to be an independent firm called QSI in Beavertown, Oregon. Maybe you're thinking of IC Controls, which Lionel did buy in order to add the TPC, BPC, ASC, etc. to their product line?

Tony

[garyseven]

QSI is in BeaverTON.
BeaverTOWN is in Pennsyltucky.[:D]

QUOTE: QSI is still owned by Fred Severson and Pat Quinn

Thanks Neil.

[nblum]

Tony is correct. Lionel acquired IC Controls a few years back. QSI is an independent company owned by others, and Lionel licensed their patents. These are the same patents QSI is suing MTH over. They involve digital control of sounds and other functions using combination of whistle/bell/horn signals and similar approaches. QSI believe's that PS2's operation in conventional mode violates their patents.

[Anonymous]

Thanks Neil, I stand corrected.[:I][:D]

As for the DCS engine knowing where it is at, the engine knows how far it traveled forward and how far it travled backwards and at what speed, this information is constantly being reported to the DCS base unit via the TIU.
It dose not know where it is in the same way you might know where your engine is at in relation to the landscape of your layout.
But, because the base unit can remember how far your engine has travled and in what direction it went, you can get a report on of how much time has been put on the engine, and what the voltage to current draw performance is.

Better then that you can programe a script with your hand held unit that makes the engine go around your platform a number of times, at lets say 50 scale miles per hour , stop reverse at five miles per, then you can have a switch activate , back the train in, stop, have another pull out go around the old lay out a number of times and the stop change places with engine number one.
You can loop the whole scenario over and over again and the trains will always repeat every step perfectly no matter what the track condition is, voltage level or what loade the enginge is pulling.
The way it dose this is by having the onboard computer in constant conmmunications with the base units CPU. The engine gets polled by the base unit then responds back with a report of how far forward it went and at what speed and how long it stoped and at what rate, ect, ect.
If the engine starts to travel at other then the programed rate, regardless of peripharal conditions the base unit will tell the engine to adjust it's speed to stay on script.

All this is done via the TIU or track interface unit.

So in that sence the DCS computer can always know where the engine is and what it is doing.

With DCS you can program any scenario you choose with up to, I think, 99 engines.
You operate switches, accessories sounds and the celling lights if you so chose and it will repeat the processes as many times as you like.

This can not be done with TMCC as far as I know because the engine dose not report to the base unit, it can only receive commands and dose what you tell it. I'm not sure if Lionel up graded this or not, but I have the original TMCC and there is no way it can compete with DCS in this regaurd.
Now I know there are alot of add on devices you can get via IC controls and others but someone who know their operation will need ti chime in.
QSI is basicly designed to operate an analog responsive e-unit using a sign wave AC signal voltage change.
That is why I find it hard to understand their claim to the MTH system. From what I can tell they are two diffrent things altogether.

I hope that clarifies my meaning.[|)]

Keep on Tracken,
Mario E.

[okiechoochoo]

After reading these posts about DCS knowing this and that and doing 99 things all I can say is thank God I don't have it or TMCC. I just move the handle on the old ZW and away the postwar locomotive goes. I don't have any little brain box being told where it is or how fast it is going. I just look and let my brain determine that. Oh how thankful I am for simplicity.

[Anonymous]

I sure hope mth doesn't end up owning lionel. Who would they sue next to keep afloat? From what I have seen posted mth has been hurting for the last 3 or 4 years. (lower sales numbers and profits) Can this be totally blamed on the "lionel incident"? I think not. When I restarted in this hobby about 6 years ago I started with mth. My whole experience with them is terrible. Starting with receiving faulty products out of the box right down to their "customer service" , and it wasn't just one or two items, it was close to 4 grand worth of product, it was all junk and now sits around my layout as decoration. I buy mostly lionel engines and kline cars and if mth ends up owning lionel I will have to find another source for my engines. This is my opinion and experience so it is pretty much only worth something to me but I felt I should voice my views on this topic.

[spodwo]

Gomez - if you have $4000.00 worth of junk sitting around - I would stick it on eBay. I have gotten good money even for damaged goods. There is no point in keeping it besides - if it's the electronics that doen't work, it can be yanked.

Of course, by your name - how don't we know your trains don't work cuz you blow them up once a week? ;-)

[Anonymous]

Good question. I have had several lionel engines hit the floor and everyone one still works fine. The worst damage was some wheels on a tender and some small dents and scrapes. The mth stuff never even got a chance to hit the floor!!. I have thought about selling the stuff on ebay but I have a problem selling someone something that does not work. I have switched some items. For instance even though I told myself I wouldn't buy anymore mth I saw the 10e Christmas set and decided to buy it. I reasoned to myself that after 5 years or so maybe they have straightened out. Wrong!! I put that set on the track around the tree Christmas morning. Everyone was excited me and the kids, well it was another letdown. The engine went around the track a few times and started making grinding noises and operated jerkily. I have since found an old lionel 10e and I have swapped out the shells. I can give you at least 10 more examples of mth items that are junk, engines, cars, accessories, it doesn't matter. I have bad luck with mth for whatever reason. I must not be the only one since the store that sold predominately mth has since went belly up.

[FJ and G]

Mike Wolf would provide the strong leadership that Lionel is lacking. Every few years, Lionel rotates through new CEOs, some excellent some not so. Mike is in it for the long haul and he has a proven record of innovativeness and competitiveness. He is young and enthusiastic. Lionel would be in excellent hands with Mike. He would be a fitting heir to JLC.

Also, it would be a benefit to the hobby to reduce all of these MTH/Lionel look-alike models that are flooding store shelves. Dealers are having enough trouble getting rid of their existing inventories and in dealing with MTH and Lionel. Dealing with one company would benefit dealers and the economy of scales of the merger would benefit consumers as well.

Dave Vergun

[Anonymous]

QUOTE: Originally posted by FJ and G

...
Also, it would be a benefit to the hobby to reduce all of these MTH/Lionel look-alike models that are flooding store shelves. Dealers are having enough trouble getting rid of their existing inventories and in dealing with MTH and Lionel. Dealing with one company would benefit dealers and the economy of scales of the merger would benefit consumers as well.

Dave Vergun

David:

It seems to me that what you're saying is that it would be better for everyone if there were LESS choice in the market. And I have to strongly disagree with you. We're all worse off when there are fewer choices than when there are more choices.

Competition drives innovation. It also drives prices lower. If Lionel didn't have an exclusive agreement with Amtrak to produce an Acela model, do you really think that there'd be a $2000 set coming to market? No, there'd probably be a set from Lionel & one from MTH, and the prices would be much lower. The model probably wouldn't have all of the bells & whistles that the $2000 model is going to have, but really, who cares about all of that extra stuff?

I have to emphatically disagree with you. One major player with the lion's share of the market can ignore the activities of niche players for the most part.

Lionel does need a strong leader at the helm; I just don't think that person should be Mike Wolf.

Tony

[FJ and G]

Mike does come off being abrasive, although some who've met him beg to differ.

The reason prices would likely come down is that:

1. There are still many other toy train companies
2. There already are too many toy train companies and only a finite # of buyers, thus, the dollar is split more ways, and profits for additional R&D are not realized.

Lets agree to disagree.

[Anonymous]

Tony

You said "We're (I assumed you meant you too.)all worse off when there are fewer choices than when there are more choices. " I agree, it's the American way!

and then you said referring to Lionel's Acela and lamenting that they are sole-source and if MTH was making them too : " (P)rices would be much lower. The model probably wouldn't have all of the bells & whistles that the $2000 model is going to have, but really, who cares about all of that extra stuff?

I'm confused by your thought here; You want choices but not the ones provided by Lionel, the single-source producer of the Acela, because if MTH was a producer too; you'd have a cheaper Acela with fewer extras??? Why wouldn't MTH compete and have more extras for the same price.

LIONEL as the sole-source could have merrily produced a less detailed ACELA BECAUSE MTH was not in the market and charged anything. Instead, they were FORCED BY MARKET DEMAND to make a detailed ACELA likely at a respectable margin but no more than the market would bare.

There is a price point say $3,000 where even fewer would buy. But getting back to the point of Dave's thread; If Wolfe owned Lionel what is his incentive to produce cheaper less detailed engines; that we won't buy?

There is now, because of Wolfe, a market expectation that will not be satisfied by a return to those Lionel 50's cast-iron steamers. Wolfe created a demand for "Fine Scale" -like models that even he cannot vanqui***hat demand by being the sole source of trains, should he somehow obtain Lionel.

Alan

[Anonymous]

Alan:

What I was thinking when I said "but really, who cares about all of that extra stuff" is that the working pantographs that raise & lower on their own & the operating doors and the speed-dependent tilting probably wouldn't be done by any of the manufacturers making an Acela set, though I could be wrong about that. They wouldn't be done because the R&D for those features drive up the price.

If your competitor produces a model with fewer features, then you release a model of the same prototype with more features, you're gong to charge more to recoup your R&D investment. You wouldn't sell at the same lower price unless the price allows you to recoup your R&D, otherwise your product has just become a loss leader. And the pantographs & doors & tilting have to be a significant part of the $2000 price tag.

Regarding producing cheaper less detailed engines that won't be bought, the thing about a monopoly is there's no meaningful competition. The monopolist can set the prices to anything they want to charge. So you'll get the same detailed engines & rolling stock, but they'll cost more. And the quality of what they produe can slide, too. There's no one meaningful to force them to improve quality. The customer has no choice in a monopoly.

The only real competiion in this case becomes losing customers to other scales. If you're a dyed in the wool O gauger, you're not likely to change scales.

And again, there's no competition to force the monopolist to innovate. They might innovate on their own, but there's less of an incentive. This is. as I understand it, precisely what happened to Lionel in the MPC era.

In any event, I'm trained as a physicst, not an economist, and I move bits around inside of a computer for a living. I very well could be all wrong and Mike Wolf really is God's gift to O gauge.

Let's see what the judge has to say.

Tony

[Anonymous]

Tony

I understand monopolies (not just the Parker Bros’s version); I have taken anti-trust courses in law school so that I can advise clients against engaging in monopolistic anti-competitive practices that would be called to the attention of the Anti-Trust Division of the Justice Dept.

Here’s the angle I was getting to. If let’s say Lionel were to be purchased by Wolfe, and plenty of time competitors buy competitors with FTC approval, THEN could Wolfe (and really would Wolfe) produce poorly made and detailed products because as you say there is no competition or incentive to do otherwise.

I think that the answer is a resounding “NO!” Because like manifest destiny, where our ancestors moved West, the market is now driven in a way that will never see those crappy Lionel cast irons again. TG

He would have a monopoly, sure. But a monopolist can not use a monopoly in that way when faced with a market driven economy. We the consuming public will not buy crap.

Like Physics;(I used to be an engineer,) who would ever go back to that ringed model of the atom with the electrons in elliptical orbits about the nucleolus, Wolfe has created both a demand and need for more and more detailed engines; I ‘m waiting for the model with the train engineer waving and ringing the bell! Synchronized of course!

We will never go back to that model of either the atom or a 2046.

Alan

[Anonymous]

Alan:

I keep looking at Microsoft & its behavior. There have been flaws in Windows that go back to it's original release, and they're still there all these years later. I don't know for sure, but I think that if Microsoft took the time & effort to fix those bugs, people wouldn't complain, and maybe have a better experience working with Windows. Yet the problems are still there.

A merged MTH/Lionel can produce highly detailed models of locos with all kinds of animations & sounds & the quality could be lousy and never improve. I never meant to say that MTH/Lionel would produce cheap, under-detailed models. The things could never work, stop working after 10 minutes, or they could have other problems. People have been complaining about the quality of modern era production, and things seem to be improving. Why would a monopolist bother improving quality? Microsoft sure hasn't, and sales of Windows haven't decreased.

What I'm saying is that there's plenty of room for new problems to plague hobbyists in a monopolized O gauge manufacturer market without the manufacturers going back to older operating models.

Time will tell. Hopefuly, should Lionel end up in Mike Wolf's control, you're right & I'm wrong. Or, even better, Lionel won't get bouight out by anyone & they'll survive these troubles. Then we'll have lots of competition.

Tony

[Anonymous]

I'm not pro MTH or Lionel on the qauality issue. I have had some problems with both and after a quick phone call I was always taken care of by both.

As for the MTH DCS system I have had problems with their hand held remote track unit and I will be the first one to tell you it is one big headache. I had to use a Z-750 on my sons floor layout at Christmas.
It took some getting use to the commands with 2.0 via a conventional transformer, but now I have smooth running. Cleaning up yhe track issues cleared up alot of problems.
From what I'm told 2.0 runs much better with DCS.

As for Lionel, their products also gave me some problems, but they too took care of any problems, usually with a phone call and a couple of times had had to get my dealer to handel the issue. All in all Lionel was pritty good to me.
Now sometimes a new product can have some break in problems, like my Norman Rockwell set. When I set it up it ran real jerky, especially at start up. But, after a few drops of Labell oil as shown in the instruction an a few minutes of running around the track she started to perform much better.

I don't know why some people have so much trouble with their MTH stuff. I deal with a guy called Loco Luie in Holmes, PA maybe I'm just lucky or maybe it was my dealer but all around I have very little to say negatively about the service from MTH or Lionel.

Keep On Tracken,
Mario E.

[Anonymous]

Tony

Microsoft is not a good example because they started the software for PC industry and no one not even Linux or Apple is ready to challange them; So they could do anything ; they set the standard with each release of their operating systems and could do whatever they wanted; However note that Apple's GI created the thrust for Windows.

Here Lionel dominated the industry until Wolfe raised the stakes and now the new level is just where Wolfe put it.. With Wolfe in charge, Lionel would not flounder to creating crap that would not satisfy the demand. Anyway K-Line , Weaver and Atlas are still around to keep Wolfe honest.


Alan