Marklin, one of Europe’s largest and oldest model train manufacturers, has applied for Chapter 11 protection at a local court.
Banks no longer were prepared to finance the 50 million euro debt of the German company.
In 2006 Marklin came into trouble for the first time. That same year the company was bought by investment firm Knigthbridge.
The Chapter 11 comes at a wicked moment. Tomorrow is the first of the Neuremberg Toy Fair, the largest in its kind in the world, at which all major model train (and toy) manufacturers announce their new products.
This year Marklin was to celebrate its 150th anniversary.
Marklin has been struggling for several years now. According to some sources the company will be restructured with production moving to low cost countries.
I never had any reason to own anything by them but I know they are a long standing name in the model railroad world. Hopefully they will find a way to pull through.
Thanks for the info, Cornelius. That is indeed sad news. As others have expressed, I do hope Marklin is able to get their financial feet planted again.
I now have two Trix NYC Mikes. My first one (#1883) has been just a wonderful locomotive for me - both detail-wise and operationally. I just picked up it’s sister (#1890) a little bit ago off eBay at a very good price. [8D] Even on the Trix web site, the prices have been slashed by a considerable amount. I’m looking forward to double-heading them someday, with a cut of 25-30 40’ boxcars, hoppers, and gondolas behind 'em.
Cornelius, do keep us posted if you hear anything else. With the outsourcing for cheaper labor, I sure hope their quality doesn’t go downhill.
I´m from Germany and I can tell you that things don´t look good at Märklin. After the Investor King´s Bridge Capital took over and saved Märklin in 2006, insiders were already promising that in less than 3 years Märklin will be down to bankrupcy. And this is exactly what happened.
Märklin is one of the oldest and certainly the most traditional, influental, innovative and standard-setting manufacturer in the world, and it still is the #1 model railroad producer in the world outside the USA with the biggest sales. I can tell you: If the giant Märklin falls, all the others will fall too. The model railroading scene would never be the same again without Märklin, since it is hugely represented in the railroading world outside the USA. So let´s hope that they will somehow save the situation…
After reading the article, it looked to me like Märklin is not as bad off as, say, General Motors. However, they are on the edge, and they are in the mode of needing short-term bridge loans for operating capital. That’s why they have an issue with meeting payroll. A lot of companies operate this way, using short term debt (sometimes called “commercial paper”) to finance day-to-day operations. This whole way of doing business got into big trouble when the money supply dried up thanks to the mortgage mess in the US.
Märklin’s business hasn’t fallen off that much, but over-zealous mortgage brokers in Nevada, California and a few other places have put such a squeeze on the financial structure of the whole world that they’re now unable to raise the necessary funds to deal with their money flow problems.
Since Märklin is incorporated in Germany, they will be filing under German bankruptcy laws. Not quite Chapter 11, but it does sound like it’s the same kind of thing. Hopefully, they can weather the storm.
Kato has done well in the US because they make US prototype stuff.
Marklin on the other hand does not make as much US prototype stuff as maybe they should.
the other problem I’ve seen woth Marklin is that they are proprietary… if you have Marklin HO track then you need Marklin HO locomotives, etc. etc.
Seems to me that if Marklin made DC/DCC North American prototypes for the US market people would buy them. Even novices at the hobby would say “Well, if it’s Marklin then it’s probably good quality”
Kinda like Sony and Betamax VCRs. Betamax was arguably better than VHS just like Marklin ‘hidden’ third rail HO is arguably better than standard DC HO trains. Problem is, VHS was made by more companies and therefore was more the standard. Eventually Sony gave up on Betamax and started making VHS macines and made very good VHS machines.
I have mixed feelings about Marklin. When I got into model railroading in 1992, I chose Marklin out of nostalgia - my best friend had a Marklin set and I remembered many happy hours playing with this set as a kid. About 2 years ago, my frustrations with the Marklin system sort of came to a head and I got rid of my Marklin stuff and switched over to 2-rail. Some of the things that bothered me about Marklin:
I came to hate the third rail with pickup shoes. The pickup shoes are really noisy and look ugly. The turnouts are particularly nasty looking. Ok - so wiring is a bit easier but big deal. Automatic polarity reversers for DCC systems solve most wiring problems anyway.
The flanges are huge and ugly.
The classic motors are very noisy - although the new generation of Csine motors is very good.
Track and rolling stock are very expensive and the quality is no better than any of American brands. They make a big deal out of the fact that the bodies of locomotives are die-cast but the detailing is not great.
Thanks to the unfavorable exchange rate, they have become very poor value for the money.
The big advantage of Marklin is that its a complete system - you can get everything you need for a model railroad from one company - so its good for beginners. I just outgrew this comprehensive approach. With Marklin, your choices are limited.