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The following has just been received from one or our wholesalers:

 

12/10/12
Nolan Plastics, the manufacturer making Lionel 'Made in America' cars, has shut their doors and is seeking bankruptcy protection. The remaining orders look doubtful to be delivered. Heartland Hobby Wholesale will be contacting the bankruptcy judge and Lionel to see if there is a way to secure and finance the remaining production.

We will keep everyone posted. Do not discount your inventory on these items.  They have become instant collectors items.

Thank you,
Jim Harris
Heartland Hobby Wholesale


 

Richard
Brentwood Antiques
Last edited by Rich Melvin
Original Post

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>>The following has just been received from one or our wholesalers:

12/10/12

Do not discount your inventory on these items.  They have become instant collectors items.<<<
 
LOL, They'll need to explain why these modern era boxcars will be desirable to collect when folks have shown little interest in the thousands of cars actually manufactured by Lionel in America, not for Lionel prior to 2001?
Don't think so...
Joe

Agreed it's a sales gimmick, but I can see one side of it as a collector.

 

WAAAYYYY down the line, there could be an interest in the time Lionel tried this experiment to make a few items in the USA again.  It starts with the Presidential cars (the secoond time around) and includes a few holiday cars for that year before the company that made them went out of business.

 

What would be the total number of different cars that would "complete" a collection of these?  Off the top of my head, I know the Presidents, the Charlie Brown cars (less the boxcar in the set), and several other cars (maybe 5 not previously mentioned?) from this year's Christmas catalog.

 

I'm guessing it's less than 15 cars to have a "complete" set of these cars.  (not that I'm trying for this, at least not now)

 

-Dave

 

Originally Posted by Rusty Traque:

Collectable, schmectable...

 

There's nothing saying that Lionel won't look for another US builder after the court releases their tooling.

 

Rusty


"Always in motion is the future...."

 

Could be that this gets tried again, but with the initial attempt that failed to work out and this one that was successful for maybe a year(with the manufacturing company ultimately filing for baknruptcy), I doubt there are tons of capable companies lining up to do this for an affordable cost. (basing this timeframe on when they probably formed the partnership up until now, actual release of items has probably all been over 4-5 months)

 

-Dave

Originally Posted by Dave45681:

Agreed it's a sales gimmick, but I can see one side of it as a collector.

 

WAAAYYYY down the line, there could be an interest in the time Lionel tried this experiment to make a few items in the USA again.  It starts with the Presidential cars (the secoond time around) and includes a few holiday cars for that year before the company that made them went out of business.

 

 

 

-Dave

 

I don't recall the "Made in Mexico" stuff being worth any more or less than the Made in USA stuff from the MPC era.

 

Under the wrappings, these things are still 6464 boxcars, the value is in the decoration.  Colletors collect the object, not where it was made.

 

I wouldn't bet my retirement on them.

 

Rusty

Originally Posted by Rusty Traque:
 

I don't recall the "Made in Mexico" stuff being worth any more or less than the Made in USA stuff from the MPC era.

 

Under the wrappings, these things are still 6464 boxcars, the value is in the decoration.  Colletors collect the object, not where it was made.

 

I wouldn't bet my retirement on them.

 

Rusty


I never said they would be more valuable, just a collectable subset.  There is a difference. 

>>>I don't recall the "Made in Mexico" stuff being worth any more or less than the Made in USA stuff from the MPC era.<<<

 

I suppose since up to now Lionel only delivered about half the order, those actually interested in the cars, not the speculation around it would do well to buy them now...Shows how difficult it is to restart American production and be competitive after its been offshored. With healhcare laws looming large, it's probably impossible.  

Joe

 

Originally Posted by Bill T:

I guess the project was not profitable enough to continue operations. Maybe Lionel may want to take a stab at it and see if they can do the manufacturing without the red ink.

I suspect Nolan Plastics had problems before signing the contract with Lionel.  The reasons for filing for bankruptcy don't happen overnight.

 

Rusty

Originally Posted by Bill T:

I suspect Nolan Plastics had problems before signing the contract with Lionel.  The reasons for filing for bankruptcy don't happen overnight.

 

Rusty

 

I would have thought that Lionel's lawyers would have done a complete financial on the company before signing a contract.

Yea, like that always works!!

Originally Posted by Bill T:

I suspect Nolan Plastics had problems before signing the contract with Lionel.  The reasons for filing for bankruptcy don't happen overnight.

 

Rusty

 

I would have thought that Lionel's lawyers would have done a complete financial on the company before signing a contract.

Due diligence isn't infallible.  Even in this so-called "information age" financial and operational data can be concealed, especially if the company is privately held.

 

I'm not accusing Nolan Plastics of cooking the books, just that they might have been having some problems before accepting the contract.

 

Rusty

LOL!

 

That second listing in Jerry's post is our local shop. We pulled what we thought was a ridiculous number out of the air as a joke for that listing when the news broke. Looks like we didn't make it ridiculous enough! Amazing - just like in the late 80s with some MPC items!

 

For those that might be tempted to treat toy trains like a commodities market again, check what happened to those peak 1980 prices over a very short time. 

 

Jim

I don't know if these cars are going to hold their price or not, but there is a drift to bring production back to the US. I heard on the radio news that Apple is going to bring production of some of their products back to the states.

It seems that the off shore thing is not all it was ten years ago and some companies are having second thoughts. So maybe Lionel will continue in this direction.

It's hard to say why any one company gets into trouble today. You would be shocked at how many small businesses have one foot in the grave and another on a banana peal.

Our beloved Lionel's doors are probably open only because the outfit that owns them needs the write off.

If the rest of the shipment is held up until after Christmas, lets say late February, you could see them for $25 each at York.

 

or 

 

If the situation is resolved this week, you could see the rest of the shipment in your LHS at regular prices before Christmas.

 

or

 

The only way I can see these cars selling for astronomical figures is if only a tiny portion of the whole run gets produced and/or delivered.

 

If I were betting I would bet on the first scenario.

I am sure Lionel and many many Lionel dealers would like to be selling these cars now, probably a pretty good seller this time of year, not so much after 12/25.

 

I am also sure there are many people like me who collect and operate the Lionel Christmas cars. i have been buying them since my first son was born 15 years ago. I have quite a nice Christmas unit train running on my layout. Its part of our Christmas tradition, and I wanted to buy this car, especially this one, being made in the US for the first time in quite awhile.

 

What an unfortunate situation for all, including the Nolan Plastic people. I hope the situation is quickly resolved and the dealers get to make some sales with these cars before 12/25/12, and the consumer like me get to enjoy the car THIS Christmas, and Nolan Plastics manages to stay in business and keep their people employed.

Originally Posted by Craignor:

If the rest of the shipment is held up until after Christmas, lets say late February, you could see them for $25 each at York.

 

or 

 

If the situation is resolved this week, you could see the rest of the shipment in your LHS at regular prices before Christmas.

 

If I were betting I would bet on the first scenario.

Imagine, 2012 Christmas cars available sometime in 2013! When was the last time you ever heard of a toy manufacturer dropping the ball on a big ticket holiday item? Remember Furbies, Gameboys, Cabbage Patch Kids? They were expensive yes but they couldn't make them fast enough at the time. Here we have a manufacturer knowing that this particular item sells well at a particular time of the year to a loyal group of customers and they somehow botch it, it's not like the afore mentioned toys that no one knew would be that years big hit.

I also have been collecting them since they were offered and every year they and their MTH counterparts are run on the upper loop of my layout as a holiday tradition, now I know this isn't the end of the world but it is irritating.

Maybe if they had some of their own manufacturing capabilities instead of relying on jobbing it out they could keep a better handle on things.

 

Jerry

In some of the press material Lionel has posted...even in the LRRC Inside Track...Lionel clearly states that they have been looking for a supplier to handle larger production...maybe even a place to assemble after parts are shipped into from other US sources.  In other words Lionel did not put all their eggs in one basket.

 

On the other hand the digitally printed graphics on these new boxcars are amazing compared to decals.  I hope others have this tech. 

I think the best way for Lionel to handle this situation is to issue a e-mail to all of their dealers stating, though late, they will receive their complete orders of the Christmas cars. Any dealers wishing to cancel should contact their distributors or Lionel directly. This way, all of their pre-orders would be covered. Better late than never.

Originally Posted by jim sutter:

This reminds me of a couple of Lionel MPC freight cars. They start out at a normal price and then the dealers can ask whatever they want.

To name a few.

1. #5712 Lionel Lines Woodsided Reefer
2. #5717 Santa Fe Bunk Car

3. #5720 Great Northern Woodsided Reefer

 

Oh how I remember those days all too well, Jim.  

 

I lived in Middletown, NJ for a couple years back in the mid-1980's, and there was a nearby dealer who was noted for "adjusting" his prices based on whether Lionel shorted his order quantities.  He'd honor his pre-order prices if you had actually pre-ordered an item.  But if you walked in off the street, you paid his going rate.    Needless to say, I never bought much from the place after I realized the games that were being played on unsuspecting train enthusiasts.

 

The 5712 reefer was a doozie for its day... often commanding above $150, which in those days was a LOT of money for a traditional sized reefer.  I made a trip into NYC and purchased one at Madison Hardware before the collector frenzie hit on that car.  So it was one of the few MPC-era cars I kept (mostly for sentimental reasons) when I decided to sell much of my MPC stuff earlier this year.

 

David

Last edited by Rocky Mountaineer
Originally Posted by cbojanower:

Sounds like the supplier has a bunch of them in the warehouse and wants to move them out

They should have shipped product much sooner.  Too late, now that they filed for bankruptcy protection.  Any recent money/product transfers will now be reviewed for preferential payments by the court.


 

Originally Posted by Rusty Traque:
Originally Posted by Bill T:

I guess the project was not profitable enough to continue operations. Maybe Lionel may want to take a stab at it and see if they can do the manufacturing without the red ink.

I suspect Nolan Plastics had problems before signing the contract with Lionel.  The reasons for filing for bankruptcy don't happen overnight.

 

Rusty

I agree that Nolan's problems probably existed for a while, unless one of their major customers also recently went under or that this bankruptcy filing is due to Nolan not meeting one (or more) of their lenders financial covenants which caused their line of credit to be demanded in full.


 

Originally Posted by Rusty Traque:
Originally Posted by Bill T:

I suspect Nolan Plastics had problems before signing the contract with Lionel.  The reasons for filing for bankruptcy don't happen overnight.

 

Rusty

 

I would have thought that Lionel's lawyers would have done a complete financial on the company before signing a contract.

Due diligence isn't infallible.  Even in this so-called "information age" financial and operational data can be concealed, especially if the company is privately held.

 

I'm not accusing Nolan Plastics of cooking the books, just that they might have been having some problems before accepting the contract.

 

Rusty

Due diligence isn't infallible and reinforces the need for "skilled" lawyers and accountants/auditors to review potential subcontractor's financial and inventory data.  A performance letter of credit would have helped Lionel.

IIRC, this is the second time Lionel has had trouble producing rolling stock in the USA. The original maker was somewhere in NJ and ended up producing nothing. This second try leaves much of the production and probably all of the tooling stuck in bankruptcy.

 

Perhaps the next try will see Lionel contracting with Weaver who is alrady the largest decorator of Lionel cars in the United States.

 

Tony

Up on "The D & H Bridge Line"

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