I went to the Timonium show today.
Talked to a guy who makes limited runs of custom freight cars. His 1/4 million dollar worth of tooling is lost, as far as he is concerned. The factory that shut down owes creditors more than a million dollars and the government isn't letting anything leave the factory until someone pays.
He thinks some US companies will go out of business because of it. A company he did not name has $10 million in tooling sitting in the factory.
I asked him about tariffs and he said MR isn't listed in the tariffs and as far as this dilemma goes, not even on the Chinese radar.
He considered closing up shop himself, but decided he would regret not producing the models he has research for and intended to produce. He has found another company and will be producing a DOD flatcar.
Henry
COB Potomac & Northern
Shenandoah Valley
BigDaddyHe has found another company and will be producing a DOD flatcar.
That sounds like I will not be getting the two B&O I-5 cabooses I prepaid for...
Intermountain seems to have made progress:
Ed They wanted to do the flatcar first, as it was a less complicated project. It that works out, on to the I-5
BigDaddyIt that works out, on to the I-5
I won't live that long. They have been promising the I-5 for at least four or more years!
Oh well...
Ed
Once again, the risk of contract manufacturing.
If I had the $10 million in tooling, I would be on the first plane and have the million ready to wire on garrantee of the return on my property. Then I would hire a good lawyer over there to see how much I could get back.
Sheldon
gmpullman BigDaddy He has found another company and will be producing a DOD flatcar. That sounds like I will not be getting the two B&O I-5 cabooses I prepaid for... Sad Intermountain seems to have made progress:
If that's an I-5 and a DOD flatcar, I believe that it is someone other than Intermountain.
maxmanIf that's an I-5 and a DOD flatcar, I believe that it is someone other than Intermountain.
I believe you're correct.
I dunno. From what I have been able to hear down the grape-vine about one of the affected companies, there was no loss of tooling for them when the factory closed. Their company just paid off any last remaining I.O.U's to the factory owner, and then all their tooling was moved to a new production site and the finished models shipped to the USA. Production is getting back to normal, and they even succesfully managed to expand their US based staff while the factory move was ongoing in China. So I do question the story that there are issues with the Chinese government and companies loosing tooling now; unless something arose after the first set of companies had already succesfully moved their tooling out.
Until concrete proof surfaces suggesting otherwise; I would not worry about the closure anymore. It seems the major manufacturers have already made the move succesfully, and if any complications had arisen we would be hearing it from official sources from several affected companies. No new news is often good news.
Sounds like a chat with Spring Mill Depot.
None of the other train companies have mention loss of assets so far. One I just heard from who was part of that factory closing gave me estimated delivery dates for models I have been waiting for. If he lost his tooling I'd think he wouldn't be able to do that. IMRC is also moving forward, and was also affected by the same closing. Dunno.
Rio Grande. The Action Road - Focus 1977-1983
Yes, this whole conversation seems to lack hard facts.
But this kind of stuff happens in business all the time. It happened a decade ago to FORD and GM.
FORD and GM were having body stamping done by Checker Motors in Kalamazoo, MI.
Checker shut down and filed bankruptcy, partly because of slow payments from FORD and GM.......
FORD and GM had to put up money to get their tooling out of the Checker plant.
It all sounds like a case by case basis regarding getting tooling out of the Chinese factory and moved to an alternate to resume production. From the comments above, I wonder if individually if company x pays all it's debts, then they get their tooling and off they go. If company y can't pay what is owed, then tooling isn't released?
Based upon only what has been said.
The owner did not legally protect his assets, but maybe he can't in China. Don't know what the rules are there.
In the USA, creditors cannot simply take possession of everything of value in a factory. There are liens and titles, which the bankruptcy court sorts out so the proper people get paid what they are owed.
If an asset that does not belong to the factory is sold to pay the debts of the factory, that is the samething as stealing. In the USA, its called selling out of trust and the perp can go to jail if it was deemed intentional.
I assume the Chinese government is busy sorting out who owns what, so I hope the owner took care to file whatever documents needed to be filed to protect his interests. The government is probably at the step where they lock down everything until they figure it out.
If he just sent the equipment over there on a handshake, good luck with that.
- Douglas
I don't know what purpose would be served by the owner lying to me. China does not have our legal system. He claims he owes no money, but the factory does. The Chinese government is not interested in his rights.
Sheldon's comments about the company that is on the hook for $10 mil, might do well to pay up. Maybe the government or the bureaucrats aren't just looking to break even but to get rich. Who knows?
BigDaddy I don't know what purpose would be served by the owner lying to me. China does not have our legal system. He claims he owes no money, but the factory does. The Chinese government is not interested in his rights. Sheldon's comments about the company that is on the hook for $10 mil, might do well to pay up. Maybe the government or the bureaucrats aren't just looking to break even but to get rich. Who knows?
I'm not saying that he's lying. I'm saying that maybe he thinks his equipment is lost forever when maybe the Chinese government is not allowing anybody to remove anything unitl they can figure out what belongs to whom.
When the government determines he owns the assets and owes no money, his equipment may be freed up to remove. That's the way it would work in America. But until the government sorts it all out, nobody is allowed to remove anything.
If he knows the government already knows he owns it and owes no money, but is keeping it held hostage until someone pays, that's theft.
In which case he need to find an admiral to send a few aircraft carriers over there to fetch back the equipment.
My impression based on feedback from some of the companies which used the same factory is that they have recovered their molds and are resuming production elsewhere. I know some have made trips over to sort things out in person which may be part of why they are making progress.
China has no intrest in pissing anyone off. They need to keep their people employed but they need to make sure of who owns what and who owes who first. If you don't have current paperwork, good luck.
My friend at Bowser, the retail store sales manager, told me on Saturday that they have lined up a new factory and were moving ahead with projects. The go ahead had been given on at least one. It is a "less complex" item so that they can closely monitor final assembly quality to make sure it is up to their standards prior to moving to more complex (higher part count) items.
John