Mainline Modeler still scrapping with UP/CSX

[Anonymous]

First, arguing that the fee is only 3% so therefore we shouldn't oppose it, is fallacious as that is how income tax was started - the "we'll just just take a little iddy bit." Its the door to door salesman old trick - the foot in the door trick.

Now my own personal opinion is that the modelling industry is doomed to accept it. My experience is that there is virtually no "clout" in the modelling industry to affect a larger RR like UP. The only reason the CEO of UP might care at all what the CEO of Atlas might think is that if some how it is going to significantly impact the books of UP, which is hardly likely. This isn't me being rude, this is plain economic reality.

So for those companies that are going to fight it, they had better have pretty good precedent law on the books to back them up, and not just some high priced smooth talking lawyer who wants to add an addition on to his house and send his children to private school. The law is more on the side of UP than on the opposition. Personally I wish it weren't so, but who cares what I think, UP and the courts don't.

[Anonymous]

Dave H. Wouldn't it be within Kato's right to charge what ever they like to cover, or even not cover the fee. There is book keeping work that would go along with gathering, keeping track of and mailing UP what they're owed.

What the hey! Like they say, A million here and a million there and pretty soon we're talking about some real money! Or, has it been raised to billions now?

[dehusman]

Well lets do the math.

The RETAIL price is $140. Assuming Kato goes with the 3% option, that make s the license fee $4.20. So right off the bat Kato is charging the er 80 cents additional no matter how you figure it.
Since the fee is on the wholesale price, at a 50% markup that would make the price $70 and the fee $2.10. At a 50% markup Kato is raising the price $5 to cover a $2.10 fee.
At a 25% markup that would make the wholesale price $105 and the fee $3.15. So Kato would be charging $5 for a $3.15 fee.

Any way you cut it Kato is charging way more than the fee.

Dave H.

[Anonymous]

Bob Boudreau, I stand corrected. I looked at Standard, Trainworld, etc. and could see no price differences. I don't model UP either, however, UP and its' subsidiaries could be found on The N.P. so I am effected. Like I have said many times, it's not the cost, it's the principle! And, I don't give a rat's patootie if it is within UP's rights to do so, this decision SUCKS!

[PennsyHoosier]

LOL dkelly! The problem is, other present-day railroads may try and follow UP's route here. And that would be bad for the hobby as a whole.

Still stocking up on decals. What's next, paint colors? Should I buy a bunch of brunswick green and tuscan red, as well?

[Anonymous]

QUOTE: Originally posted by deschane

I just went through the January MR issue and could find no indications at hobby retailer's pages where UP products are more expensive. I would hypothesize this means the increase has been spread across the products offered, at the retail level. If true, this means that we are all paying for UP's idiotic idea.

Well in my copy of January MR, on the inside back cover there is a one page ad by Kato. On the lower left hand corner is a block re their EMD SD38-2's coming in February, and at the bottom it says "MSRP $140.00, $145.00 for C&NW and UP.

That does seem like $5.00 more for a UP (and C&NW) model to me. I've seen others, but this ad only took me seconds to find.

I personally don't give a rat's patootie what prices UP stuff is, because I don't have any need for it.

Bob Boudreau

[Anonymous]

dougal, I think UP equipment has always been heavily marketed. Using Ebay as a source, I found that the largest percentage of models offered were for Santa Fe and next was Union Pacific, so UP has always been popular. I just went through the January MR issue and could find no indications at hobby retailer's pages where UP products are more expensive. I would hypothesize this means the increase has been spread across the products offered, at the retail level. If true, this means that we are all paying for UP's idiotic idea.

[BRAKIE]

QUOTE: Originally posted by dehusman

The decal company would pay 3% of the cost of the decals, so if the wholesale cost of the decals was $2 then the UP would get 6 cents.

Now the question I would have is would Athearn have to pay a royalty on its challengers?

Steam engines rarely have a logo on them. The only catch is the sheild number plate and that UP used a unique type style. On the other hand a Missouri Pacific early switcher or steam engine has nothing but a generic roman text. Would they require a license?

Dave H.

All to sadly yes..UP owns the rights to the MP road name..And there lays the loop hole.[:(]

[Anonymous]

I think there's also a movie line that goes something like "I'm mad as hell and I"m not goint to take it anymore." lol

[PennsyHoosier]

The bottom line is that it mean higher prices for the modeler. "That's the fact, Jack," as an old movie stated it.

[Anonymous]

ericsp
I think that is .5 percent, not 5 percent.

[Anonymous]

I think its sad that our enjoyment of this hobby is no longer affected by just the production capabilities of a particular manufacturer. But now as much by their corporate legal stragey, I must say that the people who have posted in this forum have made this very enlightening and the way you guys have disected the issue have made it alot easier for a simple person such as myself to understand. I must agree that the whole licensing issue is very counterproductive and idiotic. I just wonder if those executives that thought this up got their start in the world of trains with the model railroad set under the Christmas tree, as so many of us did.

[ericsp]

QUOTE: Originally posted by dehusman

The fee is 3% of the WHOLESALE cost of merchandise with a UP logo or ,5% of the wholesale price of all merchandise sold.

Is that 5% of UP merchandise or 3% of all? Why would the manufacturer pay 5% of all merchandise when they could pay 3% of some?

[Anonymous]

an extra dollar or two is no big deal to me.

[PennsyHoosier]

Good grief! You KNOW who will pay for the licensing fees? WE WILL OF COURSE! [|(]

I'm about to buy a lifetime supply of decals and prepare to paint undecorated motive power and rolling stock for the rest of my modeling days.

Is model railroading that lucrative that the companies believe this is necessary?

I'm ready to bash on the UP at this point--but I'll take on the others who follow suit. This is so disappointing.

Come to think of it, it sounds like the MTH's approach to model railroading.

[dehusman]

The decal company would pay 3% of the cost of the decals, so if the wholesale cost of the decals was $2 then the UP would get 6 cents.

Now the question I would have is would Athearn have to pay a royalty on its challengers?

Steam engines rarely have a logo on them. The only catch is the sheild number plate and that UP used a unique type style. On the other hand a Missouri Pacific early switcher or steam engine has nothing but a generic roman text. Would they require a license?

Dave H.

[BRAKIE]

QUOTE: Originally posted by dkelly

Interesting thought. What happens if Athearn made two types of UP diesels. One painted and lettered - giving UP 3% of let's just say $50.00. The other UP diesel would just be painted and include a set of MicroScale decals for the modeler to put on. UP would then get 3% of let's say $3.00. Hmmmmmm. Would be pretty humerous!!

Nope! Don't work that way..You see the decal company also pays that fee.

[Anonymous]

Interesting thought. What happens if Athearn made two types of UP diesels. One painted and lettered - giving UP 3% of let's just say $50.00. The other UP diesel would just be painted and include a set of MicroScale decals for the modeler to put on. UP would then get 3% of let's say $3.00. Hmmmmmm. Would be pretty humerous!!

[Anonymous]

Ever notice that there has been more UP stuff being made in the past few months?

[Anonymous]

Surprise, surprise! Could it be that someone is using the UP fees to rip buyers off? Or, might it be that the extra work and book keeping to comply, might cost the manufacturer, then the wholesaler, then the retailer, some extra time and money? This would seem reasonable to me. All of a sudden, it's not just 3% anymore.

I can be spiteful at times, if I were a manufacturer, I'd have stopped making UP stuff, when this all came to a head. Then it would be up to the decal manufacturers to collect the fees, if they wanted to fool with producing them.

[dehusman]

They are charging more for a UP engine. That doesn't mean UP is getting all that. For all of that $5 to be license that would mean the wholesale price would have to be about $160. If the markup on the item was 25% then it would be a retail $200+ engine.

What was the price of the engine? One thing I have never seen anybody post is what is the markup between manufacturer and hobby shop.

Dave H.

[Anonymous]

QUOTE: Originally posted by dehusman

The fee is 3% of the WHOLESALE cost of merchandise with a UP logo or ,5% of the wholesale price of all merchandise sold.

So if Athearn sells an engine to the hobby shop for $50, and the hobby shop sells it for $75, the fee is 3% of $50 or $1.50.

I've seen some HO scale UP diesels listed in magazine ads at $5.00 more than other ones, so someone is charging $5.00 for the licensing fee.

Bob Boudreau

[dehusman]

The fee is 3% of the WHOLESALE cost of merchandise with a UP logo or ,5% of the wholesale price of all merchandise sold.

So if Athearn sells an engine to the hobby shop for $50, and the hobby shop sells it for $75, the fee is 3% of $50 or $1.50.

If the engine is being distributed by a historical society the license is free.

Dave H.

[Anonymous]

dkelly, I could not agree with you more! My point is these actions are counter productive and leave a bad taste in MY mouth. I really don't care what the amount of the licensing fee is, this just seems to me to be another corruption of the old honorable American way of doing business! I guess it ALL boils down to "My lawyer is bigger than yours"!

However, Our father who art "Brakie" feels we should grow up and drop this subject. We all know he doesn't really want this, as it would leave him with little to say to us Yung'ns!

Hey, this subject could be the basis for another "great" reality program on TV! Let's see, we've got political intrigue, The big guy kickin' stuffin' outa the little guy and being overall stupid and throwing his weight around. The little guy picking up the tab for all the foolishness and Lawyers making a good cut!

Now, what should we name it?

[Anonymous]

Just my 2 cents. What is the licensing fee? If it is some small amount, then no problem as an argument can be made that the model manufacturer is able to make a sale by using the railroad's property. I remember reading once that some railroad just wanted to give its OK to a product using its trademarks - which I have absolutely no problem with as that fits with the "official line" used by UP (protecting what folks think of the railroad). And yes the UP and DRGW does exist in the form of contracts - but only because those contracts have either language obligating "SP and its successors" or because UP bought SP's assets and liabilities. I believe any suit on these contracts would involve UP, not SP as it is my understanding that SP no longer legally exists.

I do believe, however, that some of the railroads miss out on an important aspect. While I can only speak for myself, I'm sure others out here would agree. My modeling of railroads is what sparked my interst in reading and learning more about them - first to increase the quality of my modeling. I then became more interested in the history of railroads and how they operate. If I wasn't a modelrailroader, I doubt I would care that the PC merger flopped, hope for the success of Conrail and a desire to see Amtrack continue. I dare say that modelrailroaders as a group are probably the most supportive non-railroad industry of the railroad industry. We've become a free spokesperson for the industry. How many of us have explained to others the importance of maintaining a rail system? How many young adults learned first hand about the importance of railroads at the Boy Scout National Jamboree working the model railroad merit badge and obtained the operation lifesaver information (which I'm sure saves the railroads millions of dollars with each avoided accident)?

IMHO the railroads are missing out on an excellent opportunity to advance their own interests by the licensing of their logos. Instead they should become involved in the hobby. Write articles in the magazines describing their newest technology and why it increases the efficiency of transportation. Would make an interesting sidebar to a construction/kitbashing piece. Imagine an article about intermodel with a sidebar written by BNSF on how their new port facility and cars decrease shipping costs and save the consumer money. Or a grade crossing article with a sidebar on how CSX is upgrading their grade crossing and how it has cut down accidents. Seems to me that would increase the perception of the railroads as good guys much more than getting a couple dollars for every model sold.

Of course just my 2 cents worth here.

[BRAKIE]

Guys,Its past time that this UP/CSX thing is laid to rest. Atlas and Athearn wised up to this and sign a agreement and that was the best solution as all other manufacturers already sign except maybe Lionel.
Now I am sure NS,CP,CN,KCS and other railroads including short lines will have a licensing agreement before long..
So grow up and let it rest as there isn't a dang thing that can be done about it except quit the hobby or continue to cry over spill milk...[;)]

[prostreetamx]

Ford almost lost the rights to thier blue oval symbol so the chose to start using it again. Car manufactures have been on the liscencing band wagon for years. Try to make a model of a Hudson or any AMC product without Diamler Chryslers permission. I have even seen recent books where Chrysler takes credit for the AMC AMX when AMC wasn't even part of Chrysler until 1986. I'm sure that any railroad that buys up another railroad and disbands or absorbs thier assets has also aquired all thier rights to name usage. Get used to it, In this age of lawyers everyone wants to get in your pocket. Vote with your wallet. I personally will buy whatever I want if I feel the price is fair.
Richard Payne
Las Vegas

[lupo]

Mark, I thought dehusman´s answer quite clarifying about what the reason behind the whole licencing deal could be.
( you are right, do not believe all things you read, specilally on the internet )

BTW: to me your topic is not of the "don't know what to post let's kick the Union Pacific" type as we saw a lot this spring and summer ( when the atlas forum was shut down ?? )
the fact that you started this topic was one of the reasons I read it.
I should have been more specific! ( and ship. . . . )[:D]

[Anonymous]

Lupo,
You need to take everything stated on here with a grain of salt! Not to besmirch Mr. dehusman, but, who's to say he has his facts "right"? What are his credentials which makes him an authority on this subject. I'm not saying he is not, I'm saying this is, after all, the internet, the purveyor of truth as well as, and easily as, lies!

Also, I attempt to post interesting topics and am not a UP/CSX basher. If you don't care about this subject, why would you take the time to post?

Submitted with respect.

Mark DeSchane