M.T.H. Responds To DCC Lawsuit Allegations

[Big_Boy_4005]

Rod, that was 20 years ago, but I think the show is still going on. It was a bit of a running joke as in how many Sunoco tank cars, Lionel Lines cabooses and track do collectors need. But, there were a lot of quality pieces beyond those commons, available at the show.

There was plenty of excellent postwar and mint MPC. Actually, more money changed hands when the public was there. While it is true that some of the most choice pieces changed hands Saturday. There was a lot more activity on Sunday.

A lot of the people were buying cars and accessories to add to existing sets. Since they weren't collectors nicks and scratches weren't as important to them, as long as the trains worked. Collector grade vs running grade is more what I meant when I said "less desirable".

Antonio, check over on the CTT forum. There is some news about MTH and QSI. Something about a case being dismissed, but I think that was a countersuit. The main case is being heard out west, but they were waiting for the conclusion of the Lionel case. It sounds like the verdict on that one will stand, and Lionel's options are appeal, pay, or bankruptcy (not fatal, reorganization).

Sorry about the Challengers and Verandas, I think Lionel is back out of the HO business for the foruth time in their history. MTH may meet with the same results here. My advice to both companies is to stick to what they know best, and forget HO. Everyone will be a lot happier.

[Anonymous]

I've followed this thread with much interest. My only direct experience outside of HO scale is a Bachmann G scale that I put around the Christmas tree once a year. Nonetheless, I go to a variety of shows (my son likes the Greenberg shows, for example), read the model press, and hang around my LHS (although I wish it were more local). My impression from these inputs is that we in North American HO are fortunate to have mostly been spared the intense sparring and almost politicization that appears to be an ongoing part of the O Scale world.

MTH wants to enter the HO market in order to expand their revenues. Gentlemen at MTH (and like other posters, I applaud your responses whether I agree with them or not), I think you will need to modify your behavior in order to even have a fair chance of succeeding in the HO North American market. Rightly or wrongly, fairly or unfairly, we have come to expect different standards of behavior from our mainstream suppliers.

O scalers: the "flavor" of your marketplace is very off-putting for the typical experienced HO scaler who might be considering switching scales or adding an O scale.

Note my references to "North American". In Europe, things are different. The big boys in the European hobby - Marklin, Fleischmann, Roco, perhaps Hornby (I say "perhaps" given Hornby's much smaller size, and the whole thing about OO versus HO) - have always eschewed standardization and opted to the best of their ability for proprietary featurs and systems that they hope would cause a given modeler to lock onto one company versus the others.

Finally, I think some posters are in error in assuming that MTH is some big company - even by model railroad standards. According to Hoover's Business Research Services, to which I have a professional subscription, MTH has 12 full-time employees. They reported $800K in revenues (2003) to Hoovers. For small privately held companies, Hoover's does not verify the revenues, but in my experience the employee numbers are nearly always accurate. The data on other modeling companies that were listed showed average revenues per full-time employee ranging from $75,000 to $83,125. With 12 employees, this would suggest that MTH's annual revenues would indeed be between $800,000 and $997,500. If there is any basis for this data (and I believe there is), and if MTH actually invested $4 million in their DCS system, one has to wonder if a key goal was to try to remove Lionel from their O scale market via crippling lawsuits.

Be that as it may, here are some context numbers:

Atlas: 80 employees, $5.9M annual revenues
Life-Like Products: 400 employees, $32.7M annual revenues
Wm. K. Walthers Inc.: 160 employees, $13.3M annual revenues

If someone can tell me the name of Lionel's actual corporate owner, I'll see if I can provide data on their size.

While we don't think much about them on this side of the pond, I am told that both Marklin and Fleischmann are much larger than any individual U.S. model railroading firm (total industry likely a different story because the Continental model scene does not have the huge number of small suppliers characterized by the U.S. and UK markets). Bachmann Industries would dispute this, maybe correctly, but in terms of reporting to the usual business-data sources, they choose to hide their light under a bushel basket. In any event, no company in the model railroading market is publicly held.

[Anonymous]

Loinel,LLC is owned by Wellspring Capital Management ( http://www.wellspringcapital.com/ )

[railman]

Q. Not to get off thread but I'm having a memory block. What is a TCA?

[Anonymous]

TCA= Train Collectors Association - The largest society of toy train collectors

[Anonymous]

Wellspring Capital Management privately reported 2003 revenues of $83M, but this does not appear to include the revenues of the operating companies it owns or controls. Nonetheless, based on othr gleanings - and bearing in mind that Lionel was on the brink of liquidation through sale at auction in October, 1995 - it is very doubtful that Lionel could pay a $40M settlement and remain in business.

[AntonioFP45]

Rails5, BigBoy,

I am amazed! MTH has 12 full time employees?! I had assumed that as far as the "miniature train" market MTH would have been huge!

Also goes to show though that "size doesn't always matter" as this apparently small company has made (in the view of many) a big impact on our hobby.

I won't desire any evil on MTH, but for the benefit of all I do hope that they do not win this litigation as, IMHO, no good would come from it.

Peace!

[timthechef]

I was under the impression that they have won their lawsuit, am I wrong? I also heard that Lionel is scrapping their HO line, again.

[PennsyHoosier]

BIgBoy--no sound? Surely you've stood by the side of the tracks. I can't imagine a train going by silently.

[Big_Boy_4005]

QUOTE: Originally posted by PennsyHoosier

BIgBoy--no sound? Surely you've stood by the side of the tracks. I can't imagine a train going by silently.

I have a lot of experience running a lot of 3 rail O trains at once. 3 rail O is not nearly as quiet as HO, there is a lot of wheel and track noise. Now add the sound of about 20 engines to the space.

Sound is just not a priority for me, operation is my focus. As one who is into 3 rail O, that makes me unusual. In HO, I would expect to see a more equal split between sound and no sound preferance. The minute you get beyond simple running, and into operations, sound becomes more of a distraction. To have a couple of trains set to continuous running, sure, sound is nice.

If I had an option to not have sound, and pay less, I would. I suspect, I am not alone.

I have to admit that standing next to the tracks, and having a train speed by is pretty cool. The effect is just not the same with models.[swg]

[Anonymous]

Antonio,

It really isn't a surprise that MTH has only 12 employees. I believe most of their stuff is manufactured offshore or otherwise contracted out. Because of that their staff only need be made up of design folks, R&D, and business types. I remember reading somewhere that Galoob (they made/make a bunch of toys) have only six full time employees.

[AntonioFP45]

QUOTE: Originally posted by dkelly

Antonio,

It really isn't a surprise that MTH has only 12 employees. I believe most of their stuff is manufactured offshore or otherwise contracted out. Because of that their staff only need be made up of design folks, R&D, and business types. I remember reading somewhere that Galoob (they made/make a bunch of toys) have only six full time employees.

O.K Dkelly. Does make sense! But, as I've stated before I was amazed that this business with just 12 employees impacted DCC in North America. Tenacity does pay off. Hopefully this lawsuit won't!

10-4!

[Anonymous]

Antonio,

I hope it won't either!! What is it that they say? One bad apple . . . . . . . . lol.

MTH with just 12 employees impacted DCC in North America. One guy with a pistol in Serbia in 1914 impacted the whole world!

[Anonymous]

Dug this outa the archives, needs to be resurrected and continued, given the new light brought to the matter!

[Big_Boy_4005]

QUOTE: Originally posted by deschane

Dug this outa the archives, needs to be resurrected and continued, given the new light brought to the matter!

I'm not sure that was necessary Mark. This is an entirely different matter, even though it involves MTH. Don't let the Lionel verdict confuse you.

Train fest in Milwaukee has passed, I wonder what Jerry Zeman found out? My understanding was that he was going to meet up with Andy Edleman to set up the DCS test. That is more to the point on this topic.

Some of us have longer memories.[swg]

We have other and better topics available for ragging on MTH about Lionel, and if we don't have one to your liking, check out the CTT forum. They have some hot ones going.[:0][;)]

[Anonymous]

Your right, Elliot, this was the DCC vs DCS thing! I will let "Sleeping dogs lay"!

[Big_Boy_4005]

Very good Mark, this dog will have it's day. (again) But sleep for now.[swg]

[AntonioFP45]

Well,

Went over and posted on the CTT forum. I'm only assuming, but my comment might've contributed to the moderator (Ogaugeoverlord---interesting name) dropped the hint that the QSI litigation topic should stay here on this forum.

On my reply to him, I basically mentioned that the MTH/Lionel litigation has been discussed here quite a bit (which has nothing to do with HO or N ) , yet no one here has ever suggested that the discussion be kept on the CTT forum.

I remember a while back that someone mentioned that "a few people" on the Larger Scale forums can be a little defensive on these issues. I'm beginning to believe this!

[JerryZeman]

QUOTE: Originally posted by Big_Boy_4005

QUOTE: Originally posted by deschane

Dug this outa the archives, needs to be resurrected and continued, given the new light brought to the matter!

Train fest in Milwaukee has passed, I wonder what Jerry Zeman found out? My understanding was that he was going to meet up with Andy Edleman to set up the DCS test. That is more to the point on this topic.

Some of us have longer memories.[swg]
[:0][;)]

Hi Elliott;

Great minds think alike. [:)] Yes, I owe an update to the group, unfortunately, I don't have much to report.

Yes, I did meet Andy Edleman at Trainfest, and we discussed the test. They did not have their HO locomotive on display, and it evidently is still at their Michigan facility undergoing final development.

Andy stated that he didn't think that they would be ready before the end of the year.

I've also alerted Andy to a concern on my end. The extension of my railroad is wired with Tony's Train Exchange Powershields, and my new staging yard uses the Tony's PS-AR auto-reversing circuit breakers (the staging yard is an eight track reverse loop). I am also using Switch-it switch machine decoders on the extension. I'm not about to hook up this portion of the railroad to DCS if I'm looking at a possible failure of these devices. I don't think there is a lot of risk, but I'm not about to take the financial hit if something craps the bed during the test.

At the very least, I will test it on the portion of my railroad that is not using the Powershields and Switch-it decoders, which is still a fairly sizeable railroad (28x32).

I'll provide further updates as we discuss the test further.

BTW, here is a link of a couple photos of my layout. The web site and pictures are substandard, but it's better than nothing.[:)]

http://home.earthlink.net/~jlzeman/

regards,
Jerry Zeman

[Anonymous]

Photos look pretty good to me. You may think your photos are substandard but your modeling sure isn't!! I especially like your backdrops. The blending of colors came out great!

[Big_Boy_4005]

Antonio, thanks for the visit on CTT, now you have seen how the other half lives. It is a strange and chaotic world over there sometimes. That's part of the reason Bob Keller has been so active of late.

His screen name sounds ominous, Ogaugeoverlord, but I think he really likes comic book superheros in addition to trains.

I agree that one of our 3 rail trolls got loose over here on MR, but I think we got a pretty good grip on that topic, and it doesn't seem to be a real problem. Bob probably had no idea that I invited you over to CTT. The thing is that you don't know Bob, and he doesn't know you, but I feel that I know both of you.

Bob has been, perhaps, a little over protective of the CTT forum the last couple weeks, but I know he means well. He may have thought you were just trying to stir things up more. I know different.[;)]

I was in the bathroom yesterday when I had a revelation. Now the bathroom is not necessarily where I do my best thinking. When it comes to MTH, we have seen over zealous comments from both directions, Lionel can do no wrong, and Mike can do no wrong. Of course most of us know that both of those positions are wrong. Where is the truth?

I think that all of the trouble we are experiencing today can be traced back to one single event. That event was mentioned early in this topic, on page 6, by Dave Krebiehl, VP of R&D for MTH.

QUOTE: First of all, MTH developed the DCS system in order to provide our O gauge customers with a command control solution other than TMCC. Even if we were interested in licensing TMCC at the time, you can imagine the terms may not have been favorable.

These words have stuck with me since I first read them, because through all of the finger pointing, name calling, and other nonsense, they ring true.

Had Lionel licensed TMCC to MTH back when it first came out, none of this would be happening now. All of this begs the question, did Lionel offer and MTH refuse or did MTH just decide to ignore Lionel and do their own thing? Either way, that was the turning point in this war, and it has all been down hill since.

[Big_Boy_4005]

Thanks Jerry, they do. [;)] We've been patient this long, we can wait a little longer. I expect that the holiday season will have people distracted and busy for the next 6 weeks anyway. I agree with Dkelly, the pictuers look great. Have fun.[:)]

[AntonioFP45]

Big_Boy_4005,

Thanks so much! I think I understand a little better now. I did think that the moderator's name with "Overlord" in it was ringing a bit of arrogance, but looks like it is more of a comic interest "handle", just as my forum name "rings" of my favorite diesel locomotive. Add to that, his constant "warnings" made me think that he was "cracking the overlord whip", when in fact he had been dealing with some posts that I hadn't been aware of. .

I just hope that my posts over at CTT didn't cause "alienation" between our groups. As I basically stated, we're linked by our enjoyment of trains.

Peace!

[Big_Boy_4005]

QUOTE: Originally posted by AntonioFP45

Big_Boy_4005,

Thanks so much! I think I understand a little better now. I did think that the moderator's name with "Overlord" in it was ringing a bit of arrogance, but looks like it is more of a comic interest "handle", just as my forum name "rings" of my favorite diesel locomotive. Add to that, his constant "warnings" made me think that he was "cracking the overlord whip", when in fact he had been dealing with some posts that I hadn't been aware of. .

I just hope that my posts over at CTT didn't cause "alienation" between our groups. As I basically stated, we're linked by our enjoyment of trains.

Peace!

No problem Antonio. Like I said over there, your comments were like a breath of fresh air. Bob is a 3 railer, you caught him off guard. I was going to say that Bob is a 3 railer like me, but that really isn't quite the case. From what I have gathered, his interests within the 3 rail world are quite different from mine. That's fine, live and let live.[;)][:)]

My interests are more that of a typical HO or N scale operator. I moved away from the more toy-like aspects as the 3 rail scale movement came on line. I have too large an investment in 3 rail to switch now, or I might have gone back to HO.[:0][;)]

Come to think of it, Bob is the only staff member, that I'm aware of, that uses a screen name when posting. Everyone else just uses their name in some form or another.

[Anonymous]

You guys who are trashing Mike Wolf are doing it out of ignorance. Unless you've been active in O gauge, you know nothing about Mr. Wolf and his background. He happens to be the catalyst who put O gauge back on it's feet. No one in the hobby today, or in the past 50 years, can even come close to his accomplishments. I suggest you take the time to learn about his achievements rather than taking cheapshots at him.[:(!]

[AntonioFP45]

QUOTE: Originally posted by Ted E. Bear

You guys who are trashing Mike Wolf are doing it out of ignorance. Unless you've been active in O gauge, you know nothing about Mr. Wolf and his background. He happens to be the catalyst who put O gauge back on it's feet. No one in the hobby today, or in the past 50 years, can even come close to his accomplishments. I suggest you take the time to learn about his achievements rather than taking cheapshots at him.[:(!]

Whoa, there Teddy Bear! Take it easy! No one is taking cheap shots here! Much of what has been discussed about MTH and owner MTH can be proven and is on record!

[Anonymous]

QUOTE: Originally posted by AntonioFP45

Whoa, there Teddy Bear! Take it easy! No one is taking cheap shots here! Much of what has been discussed about MTH and owner MTH can be proven and is on record!

[AntonioFP45]

QUOTE: Quote by TeddyBear,

Whose record and proven by whom? I don't consider all of these false allegations in this thread as a matter of record or the truth. I think Mr. Edleman did his best to explain the facts and then he and Mr. Wolf were attacked unfairly by people who know nothing about MTH and it's history. And despite what he thinks, Big Boy does not represent, nor does he speak for the O gauge community. He clearly has an axe to grind with MTH and Mr. Wolf for some unknown reason. He needs to get his facts straight before spouting off!!! I joined this forum yesterday but have lurked here for quite some time. I consider this a matter of fairness, and fairness has not been shown to Mr. Wolf and MTH.[:(!]

Teddy Bear With all due respect, you certainly are correct when you say that you joined this forum yesterday and "have lurked for quite some time".

It's funny, we have never seen anything on here that states that BigBoy speaks for the O-Gauge community. BigBoy, however, has earned the respect of many of us here (myself included) and has often encouraged posters to be positive and avoid "flaming". These qualities are the marks of good leadership. No one appointed BigBoy as a representative for O scale or 3 Rail, but he is very knowledgeable and he certainly makes an excellent "unofficial" representative for the Forum, hands down!
Take some time to read through many of his past postings.

With all due respect, "Spouting off?" The hostiliity in your comments here strongly suggest that you're doing the spouting off.

TeddyBear, the facts have been explained quite clearly, by Mr. Ebdelman (sic) himself. No one's making up anything! And in his defense Big_Boy_4005 has not ever shown in his posts that he has any "Axe to Grind" with MTH or Mr. Wolf. Plain and simple, Mike Wolf has made some good accomplishments for O scale and 3 rail, but he used strong arm legal tactics to help derail DCC and in the process incur the disapproval and distrust of the HO & N scale communites which are uniquely different from what MTH has been traditonally involved in. Are you saying that the overwhelming number of modelers whose posts were unfavorable towards Mike Wolf were wrong?..................... End of Story.

No hostility intended towards you, Teddy Bear, but that's just how it is. Winston Churchill was a historical figure that I've always admired, yet it's has been proven that he allowed the Lusitania to be sunk by a German submarine back in 1917 so the U.S would join in on the war. Churchill had made some very good accompllishments, but the Lusitania has been a very ugly stain on his record.

And so it goes...........................................................................

[ben10ben]

I don't intend to stir the pot more, the fact is that anyone who claims that Mike Wolf was the only one responsible for the O gauge hi-rail movement/rebirth simply doesn't know as much about O gauge history as they claim to.

Williams and Weaver were making excellent scale brass trains back when Mike was just a teenager putting together trains in his parents' basement. The O gauge revival was already in the makings when Mike severed his ties with Lionel, and was gaining momentum every year. There's certainly no denying that Mike played a part in it, but all he really did was jump start it. It would have happened whether or not Mike ever came along, it just would've been a couple of years later.

[Paul3]

Ted E. Bear wrote:

QUOTE: No one in the hobby today, or in the past 50 years, can even come close to his accomplishments. I suggest you take the time to learn about his achievements rather than taking cheapshots at him.

Oh, puh-lease. Mike Wolf has done more than anyone else in the last 50 years??? Are you serious?

Let me throw some names at you:

Al Kalmbach
Linn Westcott
John Allen
Irv Athearn
W. K. Walthers
Gorden Varney

Any of these people ring a bell, Ted E. Bear?

Paul A. Cutler III
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Weather Or No Go New Haven
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