Lionel's New General Manager

The problem is just because you make a train look like a race car doesn't mean fans of NASCAR will automatically want a train.

No more than putting a Lionel logo on a NASCAR racer will make train folks want to watch races.

Personally the only similarities between O guage trains and NASCAR is that they both go in circles. Outside of that the interested fan bases are quite different.

Of course with hotdogs, its a totally different story.

https://ogrforum.com/t...r-mayer-wienermobile

I have to believe that Lionel is on the decline..

Shades of the '60's when Lionel was buying all sorts of non-train related companies to bolster declining train sales.

After Lionel's last foray into NASCAR trins about 10 years ago (which ended badly from what I can tell), I am very surprised that they are going back at it again.

The first NASCAR iteration resulted in tons of NASCAR rolling stock being dumped by dealers for ridiculously low prices.

Well, this might not be the perfect comparison to the Lionel/NASCAR debate but here goes... In addition to my O gauge and Standard gauge interests, I also operate British Hornby OO scale. Hornby's current corporate manifestation is the result of numerous acquisitions over many decades by various owners, similar to Lionel's change in ownership since the 1960's. Hornby was very near death's door at various times in the 1970s, and 1980s and train sales were rapidly declining into the 1990s. Hornby has since diversified its offerings to include ownership of the wildly successful Scalextric road racing sets, Airfix plastic model kits, Humbrol paints, Corgi diecast vehicles as well as now owning outright Rivarossi, Lima, Jouef and Electrotren (all European HO brands). They also own Bassett-Lowke, the British O gauge company.

The sales of non-train items allowed Hornby to live and prosper and, yes, Hornby continues to invest in development of outstanding OO scale trains and accessories.

If Lionel sees the same trend of a declining customer base and market for O gauge trains that many of us clearly do, why the criticism of Lionel for trying to diversify its product base? Yes, maybe some R&D funding that would otherwise go to trains might be diverted elsewhere, but if the sales of those other product lines increase Lionel's consolidated profits, then there is that much more funding that could possibly go back to the train segment of the business.

I would prefer to see a diversified Lionel that continues to offer some trains than a Lionel that eventually withers away because it failed to diversify into other profitable lines of business.

Mack

RL NYC:

I belong to a model car club where many of the members own die-cast cars, including NASCAR.  At the last meeting, many were lamenting how the bottom has fallen out of the market and you can't give the models away.  I am a NASCAR fan and have been to quite a few races and so have some of my friends, both in the heyday (when tickets were difficult to buy) and current.  The attendance has dramatically fallen and the manufactures displays at the tracks have been reduced.  Sadly the polish is coming off this apple.  Too many people trying to milk the same cash cow.

Also the rotating paint schemes with multiple sponsors make it difficult to collect the one paint scheme used all racing season.  Exceptions may be the teams with full sponsorship like the #2 of Bad Brad Keselowski

Back in the day, one sponsor, all year same scheme, example, Dale (the Intimidator) Earnhardt Sr., black #3, Goodwrench.

I agree with you -- given the trend of the hobby towards more realism, boxcars with NASCAR logos will be a dud, no question.  But that's an example of mis-managing the co-marketing.  An example of Lionel improving its diversification and profitability would be, for example, for Lionel to make a nice die cast toy truck -- a racing support truck -- with a nice diecast stock car with appropriate NASCAR logos and what-not.   That would be another nice toy, NASCAR branded, made by Lionel.  Other than the fact it was made by Lionel, it would have no relation to the toy train business.  An example of a toy company that has done extremely well with premium priced, realistic looking, well made trucks is Bruder of Germany.  Lionel, as a premium brand, could do the same thing in die cast, or with plastic.  Point is they would diversify, as Mack has stated above.  It doesn't even have to be NASCAR related, it could just be other toys.  NASCAR would be but one sub-line of a different product line. 

I wonder why the new guy does not have the title of CEO or President, did Guggenheim Capitol Management eliminate that executive level at Lionel ?

My guess is that it's because you are going to see multiple business units, each with a leader, instead of simply the leader of the train business being the head guy at the firm.  The head person would likely have several key deputies, each in charge of a business line that includes the toy train line. 

I believe I must have watched a different video than you all watched.  I never heard a word about Nascar TRAINS, I very clearly heard about DIECAST Nascar products.  This is a natural business to pursue since all of the development skills and machines are exactly the same for making DIECAST trains as well as making DIECAST CARS.  Bachmann/Williams just released two new vehicles for their EZ-Streets line and they are DIECAST cars and NOT trains.  No Lionel re-invention here just utilizing the resources already available.  My 2 cnts, spend wisely,    Russ

Because Jerry C is still the CEO

Color me surprised

You haven't seemed to like anything Lionel has done since 1969. THe NASCAR diecast seems to be doing well for Lionel, nothing wrong with other sources of income

think Jerry's contract is up next year.

Because Jerry C is still the CEO

So the new guy reports to Jerry C and Jerry C is still calling the shots at Lionel.

You're right. But, its also about getting your name out there. There are plenty of non-automotive, non-beer, etc sponsor logos on even the Sprint Series cars. And the stands, at least at Pocono Raceway in Pennsylvania, are full of all types of people  ... including dads with their kids.

Can someone photoshop a Lionel logo on the hood of a Ford Sprint Series car?

How about watching a driver talking about his car after the race .... "Yeeeaaa ... my Lionel Trains Ford filled with Sunoco gas was running like a jackrabbit .... "

I think Lionel well realizes its challenges, and will do well in the future.

Mike Reagan sure is a critter . Is he always like that? Thank goodness Lionel has him.

I enjoyed the Grandstand video.

Jim

Good Day,

Just a thought…………………….

The best marketing and product strategy is when you produce and market the same products to the several different and unique markets. Lionel would have a winner by producing Tractors/Trailers in 1:48 scale to market to the NASCAR fans, Die Cast Tractor/Trailer Hobbyist as well as the O Scale Model Railroaders.

Regards,

Swafford

I feel like we are reentering the Gary Moreau era of Lionel Trains where the people at the top are not Train lovers but bean counters and marketers selling only a brand not Trains.

I wonder if Lionel is using the GE business model, where there is a parent corporation (GE) with several subsidiaries (nuclear power, locomotives, hospital equipment, and consumer lending), all of which have to show a profit as if they were an independent business.

My two cents:  I think that Mike Wolf is being smart, by diversifying within his area of strength and market recognition, by diversifying into HO and European trains, but staying within his corporate strength and expertise in trains which is part of his corporate competitive advantage.  

I don't know the NASCAR diecast market, but its not really connected to Lionel or trains.  That makes the diversification more of a gamble than a logical extension of current market and corporate strength and corporate name recognition.  

Now if Lionel were to install motors in the cars and trucks, with simple RF interface (like the new starter train sets have) and run them on a superstreets type racetrack, then they would be diversifying while building on their corporate strength and name-brand recognition, with better potential for cross-over sales in each area. 

Hey, but what do I know, maybe Lionel is making a killing with their diecast, and are already preparing to expand next into making PGA golf clubs?

No, shipboard navigational equipment, I think. Back to the roots.

Chemistry sets and Porter Microscopes.  Now that's the ticket for sure... Just like in 1966.    For what appears to be an era of top-heavy C-level management... I'm sure they're (and we're) in for an interesting ride.

David

Actually, that's not quite correct.  To clarify:

Jerry Calabrese is CEO of Lionel LLC

Howard Hicthcock is Sr. VP and General Manager of Lionel LLC

Michael Phillips is Senior Director of Marketing

Chris Elrod is Chief Financial Officer

When I first heard of the Lionel-Nascar Collectibles get together, I wondered "why?"  I wondered if this was an "arranged marriage" that was orchestrated by Guggenheim Investments/Funding; trying to make two weak sisters (by investment house standards) into a leaner and stronger business.  J.Cal. has a prior Nascar relationship.  According to SEC filings Guggenheim's Chief Legal Officer (W. Hagner) is a Director of Lionel Nascar Collectibles.

I think there is merit to those who believe that a company needs to be run by someone or some group that has legitimate passion for the product.  Unfortunately rigid financial performance benchmarks often drive management/corporate decisions for those companies that are subject to outside investment group influence.

In the end, speculation can be fun because I, nor probably any of us, don't know $#*! from Shinola of the actual details behind this new collaboration.  Hopefully the new arrangement will keep Lionel around longer.  I do fear that from the investment group viewpoint Lionel is more valued for the "Lionel" name, image and trademark goodwill than it is for its model train business.

I wonder, how many of you who think that Lionel doubling down on Nascar is a bad move are from the NASCAR heartland (i.e. the Southeast). Things are different down there. Personally, I haven't been interested in NASCAR since Junior Johnson retired and they stopped running anything that resembles real street machines, but that's just me. There may well be money to be made with NASCAR merchandise - or maybe not, but I'd like to hear what some Southerners think. I'm not going to buy any no matter what, but I'm not the target demographic either. 

On the other hand, the fact that the new GM comes from the NASCAR end of the business is troubling. Lionel is a train company and needs to remain so to preserve its identity. Executives tend to emphasize what they know and like personally. It will be a few years before we know if the new guy is going to do things with the train business that the advanced operators and collectors who hang out on the OGR forum want Lionel to do. 

The Fishing Equipment Div. and 3-D Camera Div.

Jerry C came from a NASCAR background and that's more than likely why there is such a close connection. Lionel would be wise to diversify, but not into loser licensing agreement deals. Lionel does trains, so diversify to other train markets. HO is the biggest toy train market in the world, so why aren't they tapping into it? For some reason, they think S and G scales are going to make them money - even though both are tiny niche markets compared to HO. They could market a line of HO structures or rolling stock if they can't afford loco tooling. They could market to a growing European market in either O, HO, or OO. Lionel could learn a lot from MTH as far as what to sell and who to sell it to.

I understand the concern about maintaining a strong O gauge train identity.  However, if you step back and look at Lionel's history since 1969, the folks here, more than any group anywhere, understand how unsettled the company's ownership has been.  All I am saying is that if there is a way to preserve the train business, within a separate business unit if need be, while diversifying profitably to other toy-related businesses, it's not a crazy idea.  Other firms have done the same thing, as was noted above with the U.K.-based firm.  I think having Lionel be diversified and profitable is much better for its train business than the alternative of it potentially going broke during the next shake-out in the industry or downturn in the economy. 

>>>It will be a few years before we know if the new guy is going to do things with the train business<<

Could be more of those cool "hotrods" in the next catalog??? 

Joe

Shoulda been this guy, he's done more for Lionel than most.

I have no idea.  Often enough, the marketing guy wears both hats.

I do not believe that anyone in the 113 or so year history of Lionel was a "train lover" if by that you mean someone like Mike Reagan or Jon Zahornacky who actually have played with trains as a hobby.  Certainly Dick Maddox was a wily veteran of the hobby industry, but I do not believe toy trains or even model railroading is one of his hobbies.

You're forgetting Richard Kughn.  Former owner of Lionel, and he was in fact a toy/model train enthusiast (still is).

Oops, you're right of course.  The exception, as the mathematicians say, that proves the rule .  And a very important one, as it's not clear that without Kughn's interest and investment that Lionel would have survived. Thanks for the correction.

So who is going to be the next Richard Kughn?

The simple fact of the matter is, we have absolutely NO influence as to the selection of a Sr. VP/GM at Lionel.  That's the responsibility of Lionel and Wellspring.

As to Mr. Hitchcock's potential success or failure at Lionel: "The answer is blowin' in the wind."

And, I don't believe Joshua Lionel Cowan or A.C. Gilbert were "train guys" either.

Rusty

My very best wishes to Mr. Hitchcock and everyone at Lionel and to us Lionel customers. I am sure everything will be fine.