M.T.H. Responds To DCC Lawsuit Allegations

[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,

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.

[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]

[PennsyHoosier]

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

[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.

[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!

[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.

[Anonymous]

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

[railman]

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

[Anonymous]

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

[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.

[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]

Elliot, I only made it sound that way as that is the way it sounded to me.

The statement, "less desirable" to me meant that while on Saturday, they were available to other TCA members, those members knew they were not worth what was being asked for the piece. Yet on Sunday, they found unsuspecting souls to pawn the stuff off on.
Like I said, I'm sure you didn't mean it to sound that way, but to me it did.

[AntonioFP45]

BigBoy,

No word yet on the status of the lawsuit? I've heard 2nd hand from one professional in the industry that looks like things may go in our favor.

[Big_Boy_4005]

QUOTE: Originally posted by Rod M.

QUOTE: Each year around Thanksgiving, we would have a 2 day meet. Saturday was for the TCA members only, but Sunday the public was welcomed. This allowed the members to sell their less desirable stuff to the public as well as promote the hobby,

What a swell group to be associated with. In other words, Sell the "junk" that your fellow TCA members passed on the day before to the unsuspecting public. Makes one wonder how many of those unsuspecting, and most likely in a few days, unhappy public newcomers were turned off to this hobby.

This sort of thing happens in every walk of life and in every form of business, however, it doesn't make the newbie feel any better when they find this out the hard way. I'm sure you didn't mean it to come out the way it did, at lest I'd hope not.

You make it sound as if the members were trying to rip off the public. That simply was not the case. It was no different from any non TCA event held anywhere in the country.

The quality and the prices of the trains didn't change from one day to the next. Nor did the integrity of the members. The only thing that really changed was the faces in the crowd.

Here in the Twin Cities the TCA is almost non existant. I quit going years ago, when the same 40 guys kept bringing the same stuff month in and month out, and I didn't want to buy any of it. The local public meets are sponsored by an HO club, a 2 rail O club, and a private individual with no club affiliation. There are NO rules as to what can be sold, and it's buyer beware.

[Anonymous]

QUOTE: Each year around Thanksgiving, we would have a 2 day meet. Saturday was for the TCA members only, but Sunday the public was welcomed. This allowed the members to sell their less desirable stuff to the public as well as promote the hobby,

What a swell group to be associated with. In other words, Sell the "junk" that your fellow TCA members passed on the day before to the unsuspecting public. Makes one wonder how many of those unsuspecting, and most likely in a few days, unhappy public newcomers were turned off to this hobby.

This sort of thing happens in every walk of life and in every form of business, however, it doesn't make the newbie feel any better when they find this out the hard way. I'm sure you didn't mean it to come out the way it did, at lest I'd hope not.

[Big_Boy_4005]

QUOTE: Originally posted by peter-f

QUOTE:
... Sorry John, I don't. I don't buy those products. As a consumer I tell them where to stick it. Why are we even talking about who pays? [%-)] I didn't mention any of that in my post.

The dollar value of the judgement is meaningless like you said.

Oh, you are wrong there--
If you buy from a company that has been defending itself in such a case, you paid their lawyers... and that's not something you can choose to avoid as easily as boycotting the plaintiff.

As far as the final award, likely to be reduced... but in the mean time, creditors avoid further exposure to the defendants.

Those 'huge' awards are similar to medical malpractice awards... often reduced, but a burden on the defendent in the mean time... and as far as insurace goes (business OR malpractice) has anyone noticed the Ins. Companies are arbiters of First resort? (...they pay to settle rather than beat back the unjustified plaintiffs- just because it's cheaper... for Them.) Then they raise the rates to cover their exposure.

The lawyers ain't pretty, either, but they do mitigate predatory and reckless activities.

I haven't bought ANY new trains from either manufacturer in over 4 years. I don't own any steam engines, and have no plans to buy any. The trains I have been buying were picked up at shows or on eBay, and most were not current production at the time. It has been even longer since I last placed an order with a dealer for new trains, and I have no plans to change my buying habits.

[Anonymous]

QUOTE:
... Sorry John, I don't. I don't buy those products. As a consumer I tell them where to stick it. Why are we even talking about who pays? [%-)] I didn't mention any of that in my post.

The dollar value of the judgement is meaningless like you said.

Oh, you are wrong there--
If you buy from a company that has been defending itself in such a case, you paid their lawyers... and that's not something you can choose to avoid as easily as boycotting the plaintiff.

As far as the final award, likely to be reduced... but in the mean time, creditors avoid further exposure to the defendants.

Those 'huge' awards are similar to medical malpractice awards... often reduced, but a burden on the defendent in the mean time... and as far as insurace goes (business OR malpractice) has anyone noticed the Ins. Companies are arbiters of First resort? (...they pay to settle rather than beat back the unjustified plaintiffs- just because it's cheaper... for Them.) Then they raise the rates to cover their exposure.

The lawyers ain't pretty, either, but they do mitigate predatory and reckless activities.

[AntonioFP45]

Hey BigBoy,

Wow! I sure don't need all those extra features, even in DCC. To me the simpler it is, the fewer the headaches.

However, at low volume, I really enjoy the sound of a diesel locomotive's horn. As a teen in Tampa, I lived about 1 mile from the tracks. Often while doing homework in my bedroom, I would regularly hear train horns and immedietly knew if it was an Amtrak SDP40f (the SL4T horn was unique), an SCL U-Boat or an SCL yard switcher.

For me the horn is one feature that brings back many fond memories.

[Big_Boy_4005]

If I were to switch to HO tomorrow, I would still build my railroad the same way. I would still have it operate the same way. I don't own or run any steam engines. These are the features that would interest me.

Below are the features you will have access to when using a DCC controller:

- Operate Locomotive At Scale Speeds
- Activate Whistle/Horn or Bell Sounds
- Hear Squeaking Brakes
- Enjoy Synchronized Puffing Smoke Timed To Driver Revolutions
- Activate Passenger Station or Freight Yard Sound Effects
- Activate Doppler Sound Effects
- Control Smoke Operation
- Control Locomotive Master Volume
- Adjust The Locomotive Chuff Rate


Next, are the features you will have access to when using a DCS system:

- 22 Independent Volume Control Settings
- 16 Adjustable Chuff Rate Settings
- 3 Adjustable Smoke Intensity Settings
- Adjustable Brake Sound Effects
- Adjustable Wheel “Clickity-Clack” Sounds
- 15 Selectable Custom Sounds
- 4 Adjustable Diesel Engine Ditch Lighting Effects
- 120 Adjustable Engine Speed Settings
- 3 Adjustable Locomotive Direction Start-up Engines
- Simple Lash-up Creation
- Simple Route Creation
- Simple Scene Creation
- Record/Playback 90 Minutes of Operation
- Downloadable Locomotive Sounds Sets
- Independent Locomotive Chronometer
- Independent Locomotive Odometer
- Independent Locomotive Trip Odometer
- Track Signal Quality Test
- Linear Track Length Meter
- Trip Odometer
- 2 Independent Engine Reset Features
- Doppler
- Broadcast Your Voice Through The Train's Speaker
- Independent Whistle & Bell Sounds
- 120 Speed Steps – Control engines speed in increments of 1 smph.
- 42 Levels of Programming Option
- Labor/Drift Chuffing Sound Control
- Diesel Rev Up/Down Sound Control
- Speed Boost & Brake Control
- One Touch Smoke On/Off Control
- One Touch Volume Level Control
- Engine Sounds Mute Button
- One Touch Headlight On/Off Control
- One Touch Proto-Cast™ Control
- One Touch Engine Startup Control
- One Touch Engine Shutdown Control
- One Touch Passenger or Freight Sound Activation
- Sound Packages Downloadable from MTH Website

I just want to operate my trains. I don't need to hear them or smell them. Heck, I don't even know what some of that stuff is, so why would I want to pay for it.

[Big_Boy_4005]

QUOTE: Originally posted by rrinker

Well there you go, all the truly useful DCS features (broadcasting your voice and 'clicky clack' are NOT, IMO) are all available in QSI and Soundtraxx under DCC. Bottom line, even if MTH comes out with a Reading T-1 before BLI ro someone else, I am NOT going to change my whole control system just for one locomotive, and if I cna only use a tiny fraction of the capabilities, and it looks like there are very useful ones you can't access under DCC, then I see no point in buying the loco.
I'm looking at this not as a "boycott MTH" issue but as a "there's absolutely no reason to buy this product" issue.

--Randy

Yes Randy, that is a much more realistic way of looking at this whole situation. Forget all of the deep philosophical nonsense about patents and lawsuits. Just look at the product from the perspective of "is this what I want to spend my money on?" Do I want or need all of those features?

The patent and lawsuit issues are still deeply troubleing, but they aren't going to be what makes or breaks MTH's venture into HO. Bottom line, do consumers want this product?

[rrinker]

Well there you go, all the truly useful DCS features (broadcasting your voice and 'clicky clack' are NOT, IMO) are all available in QSI and Soundtraxx under DCC. Bottom line, even if MTH comes out with a Reading T-1 before BLI ro someone else, I am NOT going to change my whole control system just for one locomotive, and if I cna only use a tiny fraction of the capabilities, and it looks like there are very useful ones you can't access under DCC, then I see no point in buying the loco.
I'm looking at this not as a "boycott MTH" issue but as a "there's absolutely no reason to buy this product" issue.

--Randy

[Anonymous]

To master all of these....

Below are the features you will have access to when using a DCC controller:

- Operate Locomotive At Scale Speeds
- Activate Whistle/Horn or Bell Sounds
- Hear Squeaking Brakes
- Enjoy Synchronized Puffing Smoke Timed To Driver Revolutions
- Activate Passenger Station or Freight Yard Sound Effects
- Activate Doppler Sound Effects
- Control Smoke Operation
- Control Locomotive Master Volume
- Adjust The Locomotive Chuff Rate


Next, are the features you will have access to when using a DCS system:

- 22 Independent Volume Control Settings
- 16 Adjustable Chuff Rate Settings
- 3 Adjustable Smoke Intensity Settings
- Adjustable Brake Sound Effects
- Adjustable Wheel “Clickity-Clack” Sounds
- 15 Selectable Custom Sounds
- 4 Adjustable Diesel Engine Ditch Lighting Effects
- 120 Adjustable Engine Speed Settings
- 3 Adjustable Locomotive Direction Start-up Engines
- Simple Lash-up Creation
- Simple Route Creation
- Simple Scene Creation
- Record/Playback 90 Minutes of Operation
- Downloadable Locomotive Sounds Sets
- Independent Locomotive Chronometer
- Independent Locomotive Odometer
- Independent Locomotive Trip Odometer
- Track Signal Quality Test
- Linear Track Length Meter
- Trip Odometer
- 2 Independent Engine Reset Features
- Doppler
- Broadcast Your Voice Through The Train's Speaker
- Independent Whistle & Bell Sounds
- 120 Speed Steps – Control engines speed in increments of 1 smph.
- 42 Levels of Programming Option
- Labor/Drift Chuffing Sound Control
- Diesel Rev Up/Down Sound Control
- Speed Boost & Brake Control
- One Touch Smoke On/Off Control
- One Touch Volume Level Control
- Engine Sounds Mute Button
- One Touch Headlight On/Off Control
- One Touch Proto-Cast™ Control
- One Touch Engine Startup Control
- One Touch Engine Shutdown Control
- One Touch Passenger or Freight Sound Activation
- Sound Packages Downloadable from MTH Website

You need to go here...

[Big_Boy_4005]

QUOTE: Originally posted by Bill August

If Lionel does go chapter 11, then MTH will get nothing. Am I reading this correctly??
A

Maybe not nothing, but pennies on the dollar.

[Anonymous]

If Lionel does go chapter 11, then MTH will get nothing. Am I reading this correctly??
A

[Anonymous]

>>This seems a little on the nutso side to me!

I have to agree with sentiment. There are the ones who say they don't even play with HO but do not hesitate to post their thoughts here. Makes me wonder what their agenda is all about anyway. Other says there is prior art but refuse to explain any further. What is their agenda?

Guys! It's supposed to be a hobby! At least it is for some of us! Spare us the drama and get back to playing with trains. OK?

[Anonymous]

Through the years I have been involved in many hobbies. Sailing, R/C flying, 1/48th WW1 Aircraft modeling, HO model railroading, wooden and plastic model sailing ships and others. In all of these sports/hobbies/activities, I have met people with gigantic egos, whom fail to understand that these things are (after all) only hobbies. I see that their identities become linked with what they percieve to be their stature within the hobby.

This seems a little on the nutso side to me!

I've been doing hobbies for almost 50 years now. I do them to have fun and let my creative juices flow!

Those of you whom take things so seriesly and are abusive to those of us whom are not, need to know that we are not impressed and for the most part, you turn us off!

[Big_Boy_4005]

QUOTE: Originally posted by AntonioFP45

BigBoy,

Thanks for enlightening us. It's funny, at 41 I would have never thought of model railroad groups actually isolating themselves as you just described. I've always naively assumed that anyone would be welcomed at meets ( in some cases charge a low fee to help with expenses).

Based on all the input I've been reading, I can believe that there may be groups that are rather exclusive. It makes no sense to me though as I've always felt that this hobby was about having fun with trains whether you're a prototype modeler, free lancer, collector, garden railroader, suitcase Z modeler, or tin plater.

I can only hope that those modelers or collectors are not "too exclusive" and still make an effort to share the hobby and encourage our younger "PlayStation" generation.

Cheers!

Yes Antonio, it's sad but true. The TCA was formed in the 50's. It's a real "old boy's" club. There are times when I wonder why I keep renewing my membership. Force of habit I guess. 22 years have passed quickly.

Please don't get me wrong, there are a lot of good guys in the TCA. Actually the TCA and it's members are very aware of the larger issues we as model railroaders face. Collectors are even more of a dying breed, literally. In that regard hobby promotion is just as important to that group as it is to modelers of every other scale. I have been thinking about the future of the hobby for over 20 years.

The reason the meet is closed, has to do with the organization's rules and insurance. Membership is open to anyone, but applicants need to have the recommendation of two members before being considered. Because of the nature of collecting, rules are very strict, as the potential for fraud is high. The tightness of the group makes it possible for members to trust one another, because everyone knows the consequences of wrong doing.

When I lived in Denver, a bunch of the TCA guys got together and formed a sepreate group. The point was specificly to be able to operate outside TCA rules, and hold meets that WERE open to the public. Each year around Thanksgiving, we would have a 2 day meet. Saturday was for the TCA members only, but Sunday the public was welcomed. This allowed the members to sell their less desirable stuff to the public as well as promote the hobby, and maybe recruit new blood ar the same time. A real win win situation.

So how does this all relate to MTH? Well for many years now MTH has played, and played well, to this rather large captive audience at York. The HO community was never invited nor considered, but it wasn't a problem because MTH didn't make any HO equipment. Times are changing.

I'm not sure if MTH has been attending the National Train Show held in conjunction with the NMRA national conventions. If they haven't they should. Especially if they plan to get into HO.

I hope this sheds a little light onto how the other half lives.[:)]

[Anonymous]

Antonio

AMEN!!!!

Dave

[AntonioFP45]

BigBoy,

Thanks for enlightening us. It's funny, at 41 I would have never thought of model railroad groups actually isolating themselves as you just described. I've always naively assumed that anyone would be welcomed at meets ( in some cases charge a low fee to help with expenses).

Based on all the input I've been reading, I can believe that there may be groups that are rather exclusive. It makes no sense to me though as I've always felt that this hobby was about having fun with trains whether you're a prototype modeler, free lancer, collector, garden railroader, suitcase Z modeler, or tin plater.

I can only hope that those modelers or collectors are not "too exclusive" and still make an effort to share the hobby and encourage our younger "PlayStation" generation.

Cheers!