http://www.spiegel.de/international/business/0,1518,605513,00.html
The credit crisis has reached Germany’s legendary model train manufacturer: Märklin filed for insolvency on Wednesday, citing a breakdown in talks for a loan. But it hopes to chug along under the umbrella of German insolvency law.
It is a shame, but everyones going through it. I can’t seem to understand why so much money is giving to a company like that when it could be used for much better situations. I never like their stuff anyhow.
mike
I bet there will be more added to the list in the next few months.
Remember, In every recession(depression) scenario, the surest sign the economy is heading toward a recovery is the rising unemployment figures, this means companies are at their lowest economic point and are desperate to stay afloat, so, lay people off in order to survive, tighten purse strings, save some money, make some money, hire people to make stuff. Also notice how many NEW companies have taken the place of the one who faded away. I know, these words of wisdom mean nothing if you just got your notice, and, you were not FIRED, you were let go, don’t ever tell a future employer you were “fired” you will be out the door in seconds.
Quite honestly, Marklin has been in severe financial trouble for the past several years. If it does outright fail, then very likely LGB will go with them, too. It’s no secret that the European model train manufacturers have been failing and being consolidated for a number of years now. There’s not a lot left and the current economic situation may well bring about their total demise. Model trains are going to have a very low priority in the lives of most europeans over the next few years.
With regard to the worldwide situation with the manufacturers, I would anticipate that we really have yet to see how the recession is fully impacting them and how it will reshape the hobby in the near future. Probably through this spring, we will be seeing products coming to the market that were already well along in the pipeline prior to the serious economic downturn. So, things probably aren’t going to look all that bad immediately. Thereafter, however, it remains to be seen what, if much of anything new, is announced and perhaps which of the smaller yet well known manufacturers goes belly up. Remember, four or five months into the Great Depression folks outside Wall Street didn’t yet think things were going all that bad. I suspect that if we had a crystal ball with which we could look 18 months into the future, most of us would be absolutely shocked to see the state of the hobby.
Incidentally, I was told yesterday that Horizon has just let more than a score of employees go. The first small signs of an industry trend?
CNJ831
Marklin is not me cup of tea, either. However, this is going to be a shock to European railroad modelers. The equivalent here would be if Atlas went under. They do have very nice models, so prices may be soft for those interested, leading to some bargains if you’re in the market for what they offer. I do hope they continue after getting back on their feet.
Lucky employers don’t know this little trick…
Oh, wait, they do now, thanks to you.
I’ve done interviews for my employer for a few years now—known that trick for years—mgr’s trained interviewers to watch for hesitations in certain questions—they’ll find out—
Every day you read the news with the markets and stock prices, and it seems to be getting worse. I’m waiting for some of the MR, big names that is to start cutting major production, and supplies. Its just a matter of time!
Whoa, hang on, My note on firing is being misinterpreted, It seems many people do not know the difference between ‘‘FIRED’’ ( employment terminated usually for some infraction of company rules) and “LAID OFF” (discharge workers through lack of work) The two are NOT the same.
I know that and you know that but some people who use my services sometimes may be getting a little more picky with who they hire—hence the sort of poke/prod thing. Let’s just say that some are getting a little paranoid about terminologies/differences.
Logic check
The company is 150 years old. It’s been through 3 insanely distructive wars, 5 changes of governments, 8 depressions (one where inflation was over 1,000%) and survived intact.
Are we to now believe that this current media induced “economic crisis” has anything to do with the company’s demise? I think not. I think its the logical end to years of poor management and lack of competetive foresight. They failed to see it coming.
" Lack of Competitive Foresight"? That and a good strong dose of Headinsand Complex. As in “I donwanna----”
And is that how you would explain the demise in recent years of all those other european model train manufacturers as independent enterprises, too? There’s a lot more at work here then simply mismanagement.
Incidentally, during war(s) most toy train manufacturers have made large profits through war work (look at Lionel in WWII), more than enough to re-build and continue on successfully after the conflict ended, no matter how much physical damage their factories sustained. Likewise, even if the local economy was not in a shape to provide a market, demand from overseas kept them going. You’ll find that the success or failure of toy and model train manufacturers throughout the 20th century was always closely tied to the world’s economic situation and, in time of war, government involvement.
CNJ831
appluase
See my note in the other trhead.
Guys,
Writing from the UK, I can put a European view forward as to why Maerklin, like others before it, finds itself in this mess.
Firstly, Maerklin (sorry can’t find an umlaut for the “a”), like Roco believed having “Made in Germany”, or “Made in Austria” meant a better product. It didn’t outsource to China, and labour and production costs were, and are far too high. My LHS is offering a Maerklin DB182 with sound at $302, and a Roco non-sound, DC only SNCF 463 four axle switcher for $150. It’s unlikely any US modeller would pay $150 for what’s essentially the same as an Atlas RS2.
Secondly, the market is shrinking. Young Europeans aren’t buying model trains. Railroad modelling is popular in the UK, Netherlands and Germany, but very much less so elsewhere, so whilst the populations of western EU and the US are roughly the same, the proportion of model railroaders in the EU is lower than in America.
Thirdly, Maerklin’s core product line is it’s three-rail AC system which is almost wholly based on German prototypes. This nationalistic concentration means that such Maerklin products appeal in Germany but have limited success elsewhere. This is true of all European manufacturers who look after their domestic markets. This is in contrast to say Atlas or Athearn that manufacture models covering the whole of the US (and they have the benefit of having a smaller number of prototypes, especially in today’s world of the ubquitous SD70 / AC4400 pairing).
Finally, the credit crunch is as bad here as it is in the US, but the European Central Bank is keeping interest rates in the Eurozone relatively high, which is no stimulus to get the economy moving. People read the papers and watch TV and are scared to spend their cash for fear of redundancy.
Ian
Good points Ian, and I was about to make the one about three-rail operation myself until I read your post. Being incompatible with every other HO manufacturer couldn’t have helped their sales. They were shortsighted in choosing their heritage over switching to two-rail operation years ago. I remember seeing Marklin trains at a store called Tiny Tots when I was about 7, and wondering even at that age why their equipment was completely proprietary.
My family came to the US in 1954 when I was three years old and one of the few things my father brought with him was a few pieces of Maerklin. Ever since then I’ve bounced back and forth between Maerklin and American HO and have got a pretty good idea of the strengths and weaknesses of both. What a lot of people don’t get is that Maerklin was a system, not just a brand. They made the engines, the cars, the track, and the transformers. No American company made that range of items in HO. The closest comparison would be Lionel in O. Compatibility with other lines was better than it might seem. Most other European makers produced at least some of their engines in three rail AC to run on Maerklin track and Maerklin produced a fair number of engines in DC under the Hamo name. Other rolling stock was an easy conversion. You just switched wheel sets. Yes, they didn’t use knuckle couplers but then neither did the real railroads in Europe or any other major model manufacturer. The only incompatible coupler was the Fleischman which was upside down compared to all the others. Why did I switch back and forth? I liked the PRR and tried to model it several times. The ugly fact of the matter was that the American models of the 60’s and 70’s didn’t work all that well. It took a lot of tinkering, which was not my strong point, to make things work together. Maerklin, on the other hand, worked. Take it out of the box, put it on the layout and off you went. You didn’t have to screw around with the couplers, and the engines ran like a Swiss watch. And it was compatible with everything you already had. I’ve still got all my Maerklin but it’s on the shelf and I’m working on a PRR layout populated with BLI engines. There have been a lot of opinions on this and other forums about what Maerklin did wrong and how poor their business plan was. I don’t recognize any of the posters as executives of more successful model companies but I suppose they must be to have such enormous knowledge on the subject. All I can
Not at all. I refuse to put all company failures down to the simple answer of “current economic crisis”. Even during the best of times companies go out of business, others thrive in the worst of times. Being focused on one market, one method, one concept, is a doomed philosophy. And as mentioned in other posts, the world is evolving, young tastes are changing, and companies need to tap that market.
Good case in point, the French TGV train V150 broke the land speed record
[quote user=“tangerine-jack”]
Not at all. I refuse to put all company failures down to the simple answer of “current economic crisis”. Even during the best of times companies go out of business, others thrive in the worst of times. Being focused on one market, one method, one concept, is a doomed philosophy. And as mentioned in other posts, the world is evolving, young tastes are changing, and companies need to tap that market.
Good case in point, the French TGV trai