Mike Wolf to retire and close MTH

OK guys....keep this on topic or we will close the thread and not allow another one like it to start.  Your vacations, and vehicle discussions, etc. were deleted.  Looks like some of you just don't get it...as we have warned some of the same people over and over to stay on topic and quit posting unrelated material contrary to the thread and the purpose of this forum.....so....if you are going to do this know that the mods have been instructed to delete your membership account. 

As I have posted, back a few years ago,  (at an online estate auction) I bought an MTH Proto 1 Commodore Vanderbilt.  It was (then) some 20+ years old, but new in the box.  I of course had no idea that it suffered from the dreaded zinc pest, only to find that the drive wheels were falling apart.  A replacement chassis was the only "fix" but was no where to be found, from MTH parts or anywhere else.

I wrote a letter to Mike Wolf, saying that I expected no warranty or other consideration- but asking him if he could help find a replacement chassis to buy.   Five days later, a new chassis showed up, no cost.  I was shocked and pleased that such personal care was still there in the business.  When I met him at York to thank him again personally, he seemed to have no recollection of my situation, so maybe one of his employees handled it.  But still, the character and culture of a company, big or small, in a huge industry or a small one,  comes from the top.

Not only was MTH and Mike Wolf good for the industry, he was a good guy from my perspective.  I wish him the best.

I buy a lot of trains from Ready to Roll in Miami. The owner, Bill Lucas, is a great guy and a long time MTH dealer. Mike Wolf owns a home in south Florida and visits Ready to Roll from time to time, usually on Saturdays where I’ve met him several times. One Saturday several years ago I went to the store with a broken DCS remote hoping that Bill could fix or replace. Mike Wolf happened to be there this day and asked me what happened to my remote. He was familiar with the problem and proceeded to disassemble the remote and fix it right at the counter before my eyes! Needless to say, I was amazed and impressed. Mike is a true “train guy” who has made enormous contributions to this hobby. He will be greatly missed.

Who knows, maybe Mike will have to take a part time job there to supplement his Social Security and fix trains. 

Pete

@MartyE posted:

Watched some of the Trainland  Virtual Train Meet. Andy didn’t seem like he would be carrying on at MTH.  I got the impression he will be done with the business side when MTH closes next year. I always enjoyed talking to Andy at York. I wish him well. 

He sounded very noncommittal to me, possibly leaning toward him not carrying on.  For MTH to continue successfully, it will need to have a passionate train person at the helm.  I don't know Andy - is he a true "train nut"?  

Speculating that he's a) done pretty well financially and b) he's a contemporary of Mike Wolf, I'd guess that he wouldn't want to bet his own retirement money on the future success of MTH.  I know that I wouldn't do it.

@Mallard4468 posted:

........ For MTH to continue successfully, it will need to have a passionate train person at the helm. ,,,,,,,

In my opinion, it would be better to have someone experienced in running a business of this size [ preferably successfully ! ];  experience with the Chinese, or access to a "China hand", would be a big plus.   If he [ OK, or she....] is a train person, which would be another plus, they will have to let the business side of the brain over ride the passion side.

Remember, Mike W. got his BS in Toy Train Mfg at Jerry Williams U, and Lionel paid for his Master's........

Best regards, SZ

With all of the brick and mortor hobby shops closing across the country, perhaps this might be in good timing. The O gauge market is pretty saturated with fewer new younger modelers entering the hobby and longtime enthusiasts passing on. We now have more O gauge trains to choose from then ever beforehand.

If MTH were to be reconstituted as a publicly-owned company, I'm prepared to buy stock whether or not it produces earnings for me. I would consider my investment to be a contribution to supporting the hobby - and it might result in some equipment I would buy in the future.

MELGAR

Nikhil, I'm sorry to say this, but all the "feel good" the anecdotal evidence in your post means nothing. It all comes down to numbers.

For a potential buyer, this deal is like any other business deal. There is an asking price, a business valuation, a few years of financial statements, perhaps a pro-forma statement looking forward a few years, and other pertinent information about the business. A buyer will look at the numbers and make a judgement about whether there's an opportunity here.

The numbers have to work. But the numbers may not work for a lot of reasons:

• Asking price too high?
• Business valuation too high?
• Do the financials show declining revenue over the last few years?
• Production logistic issues = high costs?
• Personnel issues?
• Licensing issues?

The bottom line? If the numbers don't work, there is no viable business here. Given that Mike is preparing to turn out the lights and lock the doors, it would appear that the numbers have not worked for any potential buyer so far.

A disclaimer: I'm not privy to any "inside" information here. I'm just trying to make the point that this deal is no different from any other business deal. If the numbers don't work, there won't be a deal. It really is that simple. It has nothing to do with how "iconic" certain MTH products might be.

Nikhil, I don’t think you are aware of the nuances of a publicly owned company.

In such companies, stock holders demand a strong return on their investments, and demand that the stock price increases steadily. Sometimes, they also expect a quarterly dividend. 

If a company fails to meet those conditions and the stock price tumbles, the company is overhauled and eventually lost. 

Sorry, but based on market conditions, MTH is hardly an attractive company for an IPO. 

And since no buyer has emerged yet while MTH continues to liquidate its stock, I’m losing faith that it will continue as a privately held company as well. 

Should we worry that our MTH products would soon be worn out and irreparable once the company closes its doors?

I'm stocking up!

😎

@onetrackmind posted:

Should we worry that our MTH products would soon be worn out and irreparable once the company closes its doors?

Nope! With so many locos out there, Somehow. Somewhere someone will have replacement parts.

I met him one time at York.  I was very impressed  with him.   

He gave us great products at a fair price.  His innovations and competition in the market was sorely needed.

He has earned his retirement and I wish him well.

It's a shame that our hobby isn't as large and profitable as we think it is.

@onetrackmind posted:

Should we worry that our MTH products would soon be worn out and irreparable once the company closes its doors?

Based on my ownership of MTH trains, they are delivered in good shape and generally run for a long time before they may need to be repaired. But their closure will result in my cutting back my train purchases. Parts are more of a concern for me.

MELGAR

The engines themselves I think are less worrisome....  It's all the other stuff... TIUs, Remotes, WIUs, Z4000s, and support of the WiFi app that's going to suck if it goes away.  You always drop a remote eventually. In a club environment, you need a steady stream of all this stuff to keep the place running. You have accidents, roof leaks, lightening strikes, the utility company putting 600V where the 110V goes (yes this happened at AGHR)....  you name it. If you can't replace what breaks, it won't last long as a running layout.

That's one reason why I've stuck with conventional operation. My Z4000s have been in operation for twenty years without problems. Steam engine tethers and traction tires may be another story.

MELGAR (Ph.D.)

@Rich Melvin posted:

Nikhil, I'm sorry to say this, but all the "feel good" the anecdotal evidence in your post means nothing. It all comes down to numbers.

For a potential buyer, this deal is like any other business deal. There is an asking price, a business valuation, a few years of financial statements, perhaps a pro-forma statement looking forward a few years, and other pertinent information about the business. A buyer will look at the numbers and make a judgement about whether there's an opportunity here.

The numbers have to work. But the numbers may not work for a lot of reasons:

• Asking price too high?
• Business valuation too high?
• Do the financials show declining revenue over the last few years?
• Production logistic issues = high costs?
• Personnel issues?
• Licensing issues?

The bottom line? If the numbers don't work, there is no viable business here. Given that Mike is preparing to turn out the lights and lock the doors, it would appear that the numbers have not worked for any potential buyer so far.

A disclaimer: I'm not privy to any "inside" information here. I'm just trying to make the point that this deal is no different from any other business deal. If the numbers don't work, there won't be a deal. It really is that simple. It has nothing to do with how "iconic" certain MTH products might be.

Agree! The real question is the value of any assets! Or, whats left after the real estate is sold off.  Lionel,  has a control system and is already producing engines and boxcars, etc. Bachmann is doing their thing. So, bascially in comes down to a couple of accessories no one else produced. Plus, a control system that at times could be like Morris the cat - In my experience.

IMHO, the game is over!  Eventually, some things may be bought up! But, at a cost that is pennies.

Just run the heck out of them. If in the future a loco dies and can't be repaired make a unpowered unit out of it. I have MTH locos going all the way back to the very early PS-1 era, have not had to replace the electronics or convert to unpowered yet.

@NIKHIL posted:

 

So, overall, I am going to tell you this: We need MTH to keep going!!! Mr. Wolf has to retire, but ownership has to transfer from private to public ownership. Whatever the reasons, ever since MTH has entered the O gauge market, MTH has now become a major player and has given the competition a serious run for its money. What started off as a line of replicas of Standard and O gauge trains from the tinplate era has now blossomed into a vast offering of extremely well-made O gauge trains, track, structures, and other accessories.

So, let's stay tuned. In the meantime, let's keep the World's Greatest Hobby on track - and be optimistic about the future of Model Train hobby, as long as we continue to keep children involved or get kids into the hobby of Toy Trains (and possibly sign them up for the TCA Kids and Teens Clubs) - or continue to get more people involved in this hobby and recruit more people into TCA. All we have to do is to learn patience with children and toy trains.

So when are you making your offer? 

There are too many signs that says MTH is done.  The auction, the sale of the building, the silence from Maryland, and the lack of a heir apparent.  As Rich pointed out the financials have to be there and in the case of O gauge trains I doubt they are.  The best hope for MTH was Andy and Rich but I don't see them, after already being in the business almost as long as Mike, wanting to start a new chapter.

I do hope MTH goes on but the warm and fuzzies that you listed don't add up to $$ and cents.

What's going to happen with the website and access to all the manuals, sound files, etc.?

@Mallard4468 posted:

What's going to happen with the website and access to all the manuals, sound files, etc.?

Unfortunately there are a lot of unanswered questions that comes along with this.  If MTH does get another entity to take over customer service, parts, etc.,  I would imagine they would become the keeper of that information sans the DCS stuff which is supposed to be handled by another 3rd party company.  All of us are waiting for the smoke to clear to see what ends up where.

People need to accept MTH is gone.  But maybe as a result, Lionel will gain more customers and in turn have more development money for new engines or technology.  Yes, having no competition is never good, but you have to deal with reality, not dreams.

ALAS, 'tis true.

Burrowing an axiom from ancient times, and massaging a bit I think "the writing was on the wall" of MTH closing began when Lionel moved primary production overseas, 20 years ago. It took Lionel some years--the lawsuit undoubtedly extended the time--but eventually, and this is my two-cent opinion, Lionel's technology advancements in their Legacy and Vision Line items out-paced MTH's innovations in their Premier line and Lionel's aggressive licensing broadened their market base such that the Lionel name made a resurgence of titanic proportions.

Yet, IMO the single most important factor in Lionel winning the final battle of the titans was the Lionel name, which is gold in worldwide sales and marketing and which Mike Wolf could never completely overcome (although he gave it a sincere effort and was able to market Tinplate trains under Lionel Corporation). In addition, there are some people, young and old, who cherish the Lionel name and the orange and blue boxes, and they don't even consider anything else, which of course is brand bias, but nevertheless represents a critical portion of market share. That level of brand loyalty is priceless to a company's owners (Harley Davidson has it, too).  

In actuality, MTH had some superior aspects in both their Premier and Railking Lines, too many to list, but apparently they weren't enough to warrant MTH being a profitable company such that Mike Wolf could've sold the whole kit and caboodle. If the "price is right", I predict Lionel will buy the tools and dyes to the Premier Line; there's just too many outstanding models, especially in the steam category, that have superbly engineered chassis and highly detailed superstructures (many with rounded boilers on their undersides  

I feel for the long-time staff who will be out of job, some of them have quite a few years working for MTH. Brand bias aside, it is a sad time for the hobby, not just for the lack of variety, but for the loss of a significant contributor in the O-gauge community. I've endeavored to make DCS and Legacy work on my layout, and the fun of operating trains has been enriched by both systems and both companies products.  

@Paul Kallus posted:

Burrowing an axiom from ancient times, and massaging a bit I think "the writing was on the wall" of MTH closing began when Lionel moved primary production overseas, 20 years ago.

 

You do know that Mike Wolf was originally a sub-contractor for Lionel arranging for Korean production of some of Lionel's O Scale...

Rusty

@Bill T posted:

...I have MTH locos going all the way back to the very early PS-1 era, have not had to replace the electronics or convert to unpowered yet.

Same for me.

MELGAR

I guess I shouldn’t be surprised this thread has flared back to life although I was more expecting it to occur next spring.

Here is a mental health suggestion; unless you or your closest friends and associates have perhaps $30-40 million to buy the tooling and whatever other MTH assets exist - there’s nothing you can do about this. Zip. Nada. Quit worrying about it.

And for anyone thinking the exit of MTH will somehow make Lionel “better”  - C’mon man! 🙄

Now; go to your basement or train room and run and enjoy the trains you have!

Curt

I was a die-hard Lionel-all-the-way guy up until fairly recently (save for rolling stock and accessories which of course work universally), but I've since invested in numerous PS3 locomotives.  For me, while Lionel I think beats out MTH in some ways (speed control, chuffing sound, quilling whistle, whistle smoke for a few), MTH beats out Lionel in a few key metrics:

- The ability to swap out sound files and even build custom ones to load (albeit with aftermarket software)

- The consistent addition of the drop plate between the loco and tender

- The ability to change the drawbar and make a closer engine/tender coupling

- Protosmoke: the chuffing and sheer volume just beats Lionel imo, and the load-dependent volume on diesels really wins the day

- Protocouplers: They're reliable and quiet and couple easily.  Electrocouplers always sound like I'm electrocuting something.

- While it varies from model-to-model, I think MTH Premier consistently puts just a hair more detail into their models than Lionel, as a whole.  MTH uses thinner wire on their steam engines, which makes them look a little less toy-like and a little more scale model-like.  (And if you're complaining about it being too thin and breakable, buy RailKing)

I, for one, will really miss MTH and all the advancements they brought to the hobby.  My hope is that, perhaps with their departure, some of these technologies and tooling could be up for grabs for Lionel and other model-makers.  But I guess we'll see!  At the end of the day, as devoted as many of us are to MTH, Mike Wolf doesn't owe us anything except for the remainder of the warranty on the models we purchase this year.  If he wants to retire, so be it and good for him.

Woody, you missed MTH has much better crew talk. "OVER"

@Dave Zucal posted:

Woody, you missed MTH has much better crew talk. "OVER"

Oh my God yes!!! 👍

Curt

Back in the 60'sand 70's Firestone tire co.Management decided to bankrupt the company. After getting some major concession from the union in the area of health and welfare, and retirement contributions by the rank and file, management secretly gave themselves some huge bonuses. Well now the WAR was on. Meanwhile 3 or 4 distributors got together and made a 3rd party purchase of a closed Firestone factory . They hired back the skilled workers who had been laid off and went back into production,with a quality product. The name of the new company is Hercules Tire .The rest is history. I think the same should be done today with MTH!

Wow. 

@fastman posted:

...The rest is history. I think the same should be done today with MTH!

But...the numbers STILL have to work!

I agree with MTH advantages but that's because I only have 2 modern (post 1990) Lionel Engines.  For me, I like the wide variety of MTH road names, subways, and specialty sets like the North Shore Line and Metra.  The problem has been for me, when you picked your command system, you pretty felt like you ought to stick with that manufacturer.  My LHS gave me that advice a long time ago.  I chose DCS.  I may now add Legacy.  But if DCS is going to die, wouldn't it be in Lionel's interest to modify Legacy to accommodate DCS engines (buying the rights to?) to get us to convert?  If they did that, it would be easier to justify buying Legacy and then adding Lionel's engines to my stock in the future.

Why don't MTH people chime in on this column?  If MTH was truly on a death spiral, what do they have to lose?  Inquiring train nut minds here need to know.  Also, I have spent more money on MTH products since the announcement than ever!  This week I am picking up an extra remote and TIU for insurance.  Yikes!  Cha-ching!  Fortunately I picked up some extra money from an inheritance (Thanks, Dad!).  That closing announcement might play into their end strategy to maximize sales before closing, or before transferring to new ownership in some form.  Some hobby shops are holding out hope and a few have told me they believe MTH will continue in some form.  

@IRON HORSE posted:

But if DCS is going to die, wouldn't it be in Lionel's interest to modify Legacy to accommodate DCS engines (buying the rights to?) to get us to convert?  If they did that, it would be easier to justify buying Legacy and then adding Lionel's engines to my stock in the future.

 

I always thought Lionel was lucky to have DCS operate Legacy engines.  Why?  To do so you needed to buy a Legacy base (or TMCC), and a Legacy or TMCC engine.  Lionel couldn't lose on that setup.  They were selling engines and equipment to the DCS crowd without any overhead.

Now the same could be said about doing it the other way around but what is the investment into the added engineering to do so for Lionel?  If they do nothing and you need a new locomotive you'll most likely need to buy a Lionel engine and base.  Unless there is an incentive to make money I doubt Lionel will invest the effort, time, and money to make PS engine work via Legacy.  Just my opinion.

On a side note, there was always a rumor from many years back that there was a way to operate PS engines from a Legacy remote in command but due to legal complications it was never implemented and no one would ever confirm it.  Would love to know if that was truly the case. I would assume you, as in MTH's case with a Lionel command base, would still need a TIU but only the Doctor knows for sure.

Rich I love your contributions to this magazine and the innumerable contributions you have made. PERIOD. But the human spirit and desire to succeed cannot be diminished. I was running a mid-size trucking company in upstate N.Y. at this time and would not have given Firestone a snowballs chance of surviving. But Hercule's saved hundred's of blue collar jobs with that move. Bridge stone saw real value in the established distribution system and ditto there. This magazine could be a MAJOR contributor to that effort. A couple of weeks ago I went Digital on my subscription,and Alan Arnold CALLED ME on the phone and we had a great conversation. That man cares about his company and us. I'll take that all day long.

..."don't they know it's the end of the world...it ended when Mike Wolf said goodbye"...

No way! 

The hobby will continue to strive even if MTH shuts it's doors forever.  Just look at the history of model railroading from it's meager beginnings from wind up toys to today's high tech computerized trains with minute detail that the hobby hasn't ever experienced before.  True, they come with a price, however the market still offers Nice Price affordable O gauge trains for those who just want to play train for the enjoyment it brings for any number of reasons.

Regardless, one thing remains a fact.  O Gauge Railroading with it's staff of professionals will be here to report the very best news and to share your dreams when you submit articals and photographs of your layout for all members of the OGR family to enjoy.  For without you, OGR would close it's doors just like so many manufacturers of model trains as well as several model magazines that lost their readership for failing to maintain the high standards that OGR does.  However, if OGR is to survive these turbulant times, it needs everyone of us to do more than just sign up for the fourm, which doesn't require any fee whatsoever.

Please consider taking out a Digital Subscription and becoming a Supporting Member to insure that OGR will not only be here for you to enjoy today, but so your children and their children's children will also be able to share in The World's Greatest O Gauge Railroading Magazine for generations to come.  Believe me when I say that doing both is the best investment I made in 2020!  You can loose your caboose on Wall Street, but with a OGR DS and SM you'll reap dividends beyond your wildest dreams!

Happy Rails to you!

Godspeed

Joseph Toth Jr. 

Please Pray for World Peace.  We owe it to our children and their children's children.  They deserve no less!

I think if we had the firmware/xilinx bitfile on the PS3 board/TIU/Remote available and opened up (like open source) and whatever software tool makes the sound file format.... we could probably hobble along and just design whatever we needed as we go. Without those items it's lights out though.