"It looks like E. P. Lehmann may be in for a bit of a rough ride over the next few months, but the good news is that the difficulties shouldn’t affect product availability. Here’s the story we’re about to post:
E. P. Lehmann Patentwerk, manufacturer of LGB trains, today filed for financial protection in a German court. The protection was sought because their bankers had called Lehmann’s loans due in an effort to force a sale of the firm to an investor favored by the bank. As part of the same effort, the banks had prevented Lehmann from shipping finished goods to its customers, including now-independent LGB of America. (Shipments of LGB trains to LGB of America from other suppliers had not been affected.)
“We’re happy they (Lehmann management) have taken aggressive action to protect the company from a hostile takeover. We believe they will begin shipping from Germany again this week. We have plenty of product in our U.S. warehouse and are shipping as normal,” according to LGB of America’s David Buffington.
Buffington added, “The LGB brand has tremendous value around the world, and no one is going to let that get away.” – Terry Thompson
How could this have happened, they seemed to me a well run if a bit arrogant mob. Is there too many people living off the company and taking too much out of it?
Or has there been some dirty work at the crossroads against LGB?
Victor. Do you know for a fact it is a hostile takeover. The above is a comment from the new “head” of G45. There is no comment anywhere in the above from EP Lehmann Patentwerk. I would respectfully suggest you make sure you have all the facts before proposing any hypothesis.
Here’s a statement from Germany posted on the LGB Club site forum:
Ernst Paul Lehmann Patentwerk today announced that it was taking strong, immediate steps to prevent a hostile takeover of the family firm. Those steps include legal moves that should enable Lehmann to continue providing its quality products and services around the world.
“We do not believe that a hostile takeover financed by international bankers is in the best interests of our employees, representatives, retailers and consumers,” said Rolf Richter, Managing General Partner of Ernst Paul Lehmann Patentwerk. “Lehmann has been operating profitably, despite the severe problems in the model train industry, and we believe our family atmosphere is a very important reason for our success.”
To preserve that family involvement, Lehmann has taken the legal step of asking the German courts for protection from its financing banks. “We feared that the largest of our financing banks, an international bank forced upon us after the dissolution of our local bank, sold its loans to Lehmann to a third party without our knowledge,” said Richter. Richter also emphasized that these moves will enable it to ship product and provide services during the crucial holiday sales season. “We are going to ship a large volume of popular standard items, like track, and exciting new items,” said Johannes Richter, Managing General Partner and production manager of Ernst Paul Lehmann Patentwerk.
Interesting article. Looks like they are doing what most Australian companies are doing - going “broke” and then popping up as the same product only made with cheap labour, poor materials, non-existant quality and higher prices ex China. I think Quote from Buffington sums it up nicely. And ironically, LGBs home page waffles on about the Shanghai Toy Show. Anyways, if they move everything to China, should be able to buy pirate copies cheap! BTW - does anyone know where in My Least Favourite Country LGB has its manufacturing done.
The press releases from LGB are read with interest by many (all?) in the model railroad industry. Those who are fluently bilingual in German and English have also compared English text with German text and noted that the differences in content are remarkable and worthy of note.
Thanks Rene, guess we’ll all just have to sweat it out, from what I can rut out, when they hold the 1st court hearings in the coming weeks will be very telling as to the future disposition of LGB.
I haven’t been updating this thread as their were so many other sources discussing it, and a lot of angry words being thrown around over this issue, so I just let this one slide, but just to cap this thread off, now that it looks like LGB will now in all likelyhood, go the way of Delton, Great Trains, and Kalamazoo before it.
I’m not going to discuss the hows and whys here as to how they likely got here, many speculated answers to those questions are out there, if you choose to read them and can keep the emotional content in check.
You are correct. A newspaper in Nürgberg reported this [the factory closing]. Terry Thompson made a few phone calls this morning, but we have no other information. If we get anything, rest assured I will post it ASAP.
While on holidays in Vancouver I stopped in at Art Knapp trains. While talking with one of the managers he informed me that he has had supply issues with LGB for some time now. Particularily the availability of sectional track. He was already looking into stocking the new line of code 332 that AMS will be producing this fall. Funny…he already knew two weeks ago that LGB was kaput. News travels quicker in some circles. Later eh…Brian.
Actually some have speculated that EPL was facing kaputness when they had the blow out selling of the company archives at the annual picnic and fire-sale reduction of stock last year. A some have specualted the roots of all this go back longer to EPL not addressing the expanding competition back in the 90’s.
