ModelRailroader.com Reader Poll – January 15, 2004

[Bergie]

Do you think Horizon Hobby’s purchase of Athearn will prompt other consolidations within the model railroading industry? Please vote then share your comments below.

Polls on Trains.com are not scientific and reflect only the opinions of the users who have chosen to participate. The results cannot be assumed to represent the opinions of Internet users in general, the readers of our magazines, nor the public as a whole. Bottom line, our polls are meant for fun and to stimulate conversation amongst our forum users.

[Anonymous]

If a successfull business owner desires to sell, he will sell. Corporate America is constantly looking for profitable businesses to purchase. I worry that eventually we might all be buying everything we need or want from a single corporate entity!!

[2c]

[detting]

While it is true that Corporate America is always looking for business to buy, they do not always look for a good fit. In fact some corporations go on a buying spree only to run succesful businesses into the ground. Think about Lionel during the General Mills era or what happened to Burma-Shave when they sold out.

As for buying all your model RR supplies from the same place - as long as there are people who are willing to work out of their basements to make resin kits because of their love of trains and this hobby, there is hope this will never happen.

Later...

[Anonymous]

Unlike most categories of business, there are not a lot of large, cash-rich or otherwise financially attractive companies involved in model railroading. At some point somebody may want to buy, say, Walthers, or the parent of Model Railroader, but beyond that you are dealing with a lot of very small to at best mid-sized companies that don't even show on the radar of larger companies out there looking for acquisitions.

John

[Anonymous]

All industries tend to consolidate over time. There are efficiencies associated with being bigger--particularly as manufacturing moves overseas. The smaller businesses will not be able to compete.

QUOTE: While it is true that Corporate America is always looking for business to buy, they do not always look for a good fit. In fact some corporations go on a buying spree only to run succesful businesses into the ground. Think about Lionel during the General Mills era or what happened to Burma-Shave when they sold out.

The acquisitions of today are more synergistic than when General Mills bought out Lionel. In the 1960s & 1970's the Wall Street darlings were conglomerates who owned a lot of different companies in multiple industries. The idea was that over the long term there wouold be more balanced growth--less vulnerability to economic cycles. These companies were taken apart in the 1980's because they lacked commercial synergy. The acquisitions of today are made by people who undersdtand the business and can wring out duplicative costs.

[IRONROOSTER]

Seems to me over time a number of the manufacturers get bought - I seem to remember that Walthers bought a few over the years. I don't recall any major buying frenzies. The bigger worry seems to be that the company eventually disappears altogether. I'm thinking of Silver Streak, Ulrich and others.
Enjoy
Paul

[Anonymous]

I hope it doesn't cause a flurry of consolidations in the future. Also, I hope the product doesn't suffer down the road as they might hurry to put new items on the market. As I'm in N gague, I hope the products don't suffer. Was looking forward to the Athearn line to be duplicated in "n" down the road as they would give us a lot more choices that we have now.
Al South Carolina

[Anonymous]

Just like we resisted manufacturers from the Asian continent, we as a group are suspicious of cchange in the industry we support. Those old mistrusted Asian engines are now the ones we've got to own. The Athearn family built a legendary dynasty that more or less ended. If another manufacturer is up to the challenge of maintaing forward progress with Athearn products, I can only say, "Good luck."

[johncolley]

Well, DUH! Look at the railroads in this country and Canada for the answer to your question. It ain't "Rocket Surgery", folks!

[Anonymous]

This is a bit different, this is not one manufacture buying the competition,
This is a "distributor" who is buying successful manufactures
of a variety of hobby products.
If a distributor controls the, distribution of a popular product.
They can manipulate the prices of such. The popular Athearn
line is everywhere, and sometimes deeply discounted.
It was the way many folks got into this hobby, at a reasonable
cost, and with a very good product. With the distribution of
this product now changing, my only worry is how it will effect
just that, the availability of this good, and reasonably cost product.
And I am particularly referring to what is know as their "Blue Box Line"
That is the American made car and engine kits.

[Anonymous]

This arrangment could be a blessing to the industry if the manufactures product lines are not streamlined loosing many of the the older designs. These designs are the main stay of model roading. Lets hope these designs will be added too

[Anonymous]

The problem today is the delays in overseas manufacture after an announce ment of a new item. Elimination of one leg in the distribution channel(distributor owning manufacturer) will not eliminate this problem, but probably exacerbate it!

[Anonymous]

Mergers in most corporate sectors happen because there are big guys and some medium size guys to join together. But who else will join with who, a Walther's Atlas venture - I doubt it. About the only merger that makes any sense to me is that MR buys out one of the N scale mags to get into the N scale mag business, that way it would be an easier in. But seriously, who's out there to go with whom.

What I would like to see is more creations like hobby craft canada that does a lot of specialized stuff for Canadians that Americans don't see on in the market. I could see something like that happening in the States.

[Anonymous]

The problems will come not from the purchase of the Athearn company, but from the closing of the doors to the vast majority of the distribution channels. If your hobby shop needs 25 new locos to fill its orders, including YOURS, but it only gets 15, to whom does it go to get the remainder? Shops could, and regularly did, order mostly from a single distributor, but if an order was shorted, they could go to others, who might have extras. That day is over.

Also, a great many sellers, on the Internet or at train shows, will no longer qualify to buy Athearn products from this distributor, so those sellers will be restricted to other brands. The sales of Athearn products overall, will decline, of that there is no doubt. And when you sell less of something, the price will go up.

If Horizon had made the purchase and left the distribution channels intact, it would be a good thing. Restraint of trade is never a good thing. They'll have to run fast and hard to keep from losing a major chunk of market share.

2004 is going to be a VERY interesting year.

[rplyler]

This is not going to be good for any of us. I had a couple pieces of Athearn backordered and I was just told by my dealer that I will not be getting them as Horizon will not sell any Athearn to him. rplyler

[Anonymous]

there is also a rumor, and i hear it's true, that horizon has sent disposable cameras to all the customers that sell athearn products as a proof that these retailers sell athearn products. i heard this from a hobby store not too far from me. you see, this is what kills a good thing, GREED!! we all have to suffer maybe in the future to higher prices of athearn products?! first of all, horizon deals mostly in the R/C CAR BUSINESS!! they have no right or experience to infiltrate our model railroad hobby or it's dealers. i think less and less "mom and pop" stores will deal with the athearn line due to a distribution price increase. this will hurt business, and modelers' pockets, leading to poor sales. athearn has started many of us off in this hobby, and irv athearn is probably rolling in his grave now! he would never do this. i also think the current owner of athearn is a little "hungry" too. this would not have happened without his "OK"! !! same thing happened with david levan and what was conrail. money talks, and greedmongers listen. this will hurt BEV-BEL too. everyone should email (like i did), and voice your disgust with these "outsiders". we are the only ones who help make athearn who they are, so let's raise hell !!!!!!

[Anonymous]

I'am very worried about this merger! We in South Africa are already paying lots of money to get any Athearn stuff here! I'am wonder whats going to happen now! I hope they are not going to kill the hobby!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Anonymous]

I just don't know. A person never knows what's going to happen in the future. This might turn out to be the best thing to happen to Athearn or it could be the worst, I guess we will just have to wait a see. As you can tell, I am scared. I got my start using Athearn ptoducts in the 60s. Does anybody remember the old rubber band drives?

[Anonymous]

I agree with johncolley[:(]. Its not rocket science folks. It always ends with people losing work after the corporate shakeup and rationalising occurs. Take a look at all the fallen flags and how their demise affected towns across the US. Soon we will be buying......LifeHorizMann kits!!!![xx(]

[trainwomen]

This is of some concern. There is a theory that a bigger compay equals greater efficiency. Pity it's only a theory and often doesn't work in practice. We have had great supply and service over the years in Australia from Athearn and I would hate to see this change. If supply is going to be a problem to some hobby shops in the US what hope is there for us on the other side of the world?

[Anonymous]

This is my first posting so don't scream. But I think this Athearn deal is totally wrong and no good . I have seen what happens before not just here but in the steel industries ( Beth Steel ) the car sector ( Chry. buying AMC & Jeep ) stop and think both cost tax payers millions on dollars and jobs. Well I sure that this merger won't effect us the way those did but it still is no good. A prime and recent deal was Rivarossi sold out you could not get train for months then when they are back the prices when up. We need new co. and products I feel in the worst way But they need to be high quality at fair prices not Jap. or China made junk at top dollar. Lets keep the U.S. worker in jobs and the pride here not over seas. This is the greatest country in the world with the best tech. and workers in the world, And we have proven it time after time!!!!!!!!!

[Anonymous]

After the death of Irving Athearn,I suppose this "merger" was inevitable. Athearn locomotives comprise the majority of my locomotive fleet. I've used them for the same reasons most of us in the hobby have. Reasonable price,good looks,ability to super detail,good pullers on our pikes.We'll just have to wait and see how this one plays.I'm certain I won't be the only one watching.

[Anonymous]

[}:)] Yes, but the devil is always in the details. If this merger is to be acceptable then the new company must have the same goals as does Athearn. They must have the same core business activities. The reason some mergers fail is because the buyer does not value the core business as does the buyee. Example: A large for profit company buys or merges with a not-for profit organization in an un-related field. Not-for profit organization is doomed from the start because the core business structure is totally different.

[Anonymous]

[:D]We have to remember, to most of us it's a hobby. To most of the suppliers it's a livelyhood,job or business. If a company has a good product, but can't make money with it, then that company has to quit, sell or give it away.
Sometimes we as the hobby consumer tent to forget that fact.
Kalmbach, as an example, used to print an excellent magazine about airlines, they publish magazines other than model magazines (The Writer). As long as someone wants to buy it someone will make it, but if not it's gone.

[harryb3]

Who is next, Wal-Mart? Forgive me for being a bit cynical, but that may not be too far in the future. This Christmas, the local Wal-Mart had the Athearn John Deere set available. So they have moved up from Bachmann Sets in a small way. We've seen Rivarossi go sky high since their exclusive deal. Model Power bought out Mantua/Tyco and now have introduced their all metal series. Didn't Atlas buy out the O Intermountain line too? I have a ton of "Blue-Box" kits from Athearn. They were relatively inexpensive and I still upgrade to metal wheelsets and Kadee's for just a little more cost. Putting them together is a lot more fun than just opening a box RTR. Two Mom and Pop shops closed locally, two others relocated. I supose the internet is responsible somewhat. I like to price shop from all of the sources available. But this hobby has gone from simple plastic kits to detailed kits/half pre-built to RTR pretty quickly. And the prices have gone up exponentially. People wonder why kids aren't getting into the hobby or why NMRA membership is shrinking. Big Bucks business deals like this lead to higher cost expectations, I just hope this Horizon deal will keep what we the consumer want at a reasonable cost and available. The timing of batch runs initially floods the market with stuff which is sold quickly and one might have to wait years for a reissue run to fill his needs. Facts of life to live with, we just have to grin and bear it until the next merger deal catches us by surprise. No wonder I'm seeing more scratchbuilding articles.

[nfmisso]

In HO, Walthers got into consolidation of manufacturing and distributing, bascially from the beginning, with spurts at various times. That has not set off a wave of consolidations....

[Anonymous]

Oh My People what is the world coming. Everyone thinks that Big brother of the corp. world is coming after us. It is business people. I have found that reading the post reffering to this story has replaced my reading of the newspaper comics. So much humor. Bottom line people It will either make a great move product wise maybe better product maybe better prices. Or other hand Prices go thru the roof. Will I lose any sleep over it. Nope. It prices get out of hand Guess what we do not have to buy the product. Enough said

[Anonymous]

[:(] I hope not, but we cannot control the future. When a company gets bigger it gets greedier and wants only big orders to stay in bussiness. The mom and pop stores will not be able to fulfill this greed, and eventually will no longer be. Model railroading used to be a one on one with your local hobby shop, but with big companies its "If you want it you are going to have to pay for it" All we can do is hope for the best. trainman

[Anonymous]

Well, how many workers is this going to put out on the streets? I suppose we'll see a bunch more "made in China" stickers on the Athearn boxes. I just hope it won't lead to higher prices due to decreased competition

[Anonymous]

If this turns out to be a bad thing for the model railroading community, why not fight back in a way corporate America understands - in the pocket book. Just do not buy their product.