Sunday, September 22, 2019

E.P.L. in Bankruptcy --- Remembering 2006 - Part 2

This is an article by HJ Neumann from his blog "IIm Online Nachrichten" that HJ Neumann wrote in September of 2006, just right after LGB declared bankruptcy. This is a pretty long article, no pictures. The bankruptcy fact ripped right into HJ Neumann's heart -  having been a staunch, seriously devoted, lifelong fan of all things LGB. In this article HJ Neumann poured his heart out. YT wants to share his thoughts back then on the occurenec of the event 13 years ago this week.

This is Part 2

The next question that needs to be asked is: how to proceed? For now an insolvency counselor (similar to a bankruptcy judge in USA) has taken over the executive board.With that delivery to dealers will start again. It is the cardinal task of the insolvency counselor to secure daily business and continue until a buyer has been found. Or - if none is found- to sell off any assets left to satisfy creditors.
The damage that has been done to the brand "LGB" by that! What is going to happen to the employees? What's going to happen to the dealers, the suppliers and their employees? Who can be found to take over LGB? An investor alone will not do. There has to be a new leadership team. Just remember when POLA was taken over by FALLER. All hell broke lose inside the company and until today the brand didn't really recover. And LGB is somehow bound to stay at their manufacturing site Saganer Street. You can't just  remove all the machinery and reassemble somewhere else...

Here's the opinion of one insider: exchange the complete top management. Then choose the best from the leftover employees, invite the 50 best (biggest in sales volume) dealers to Nuremberg and present them right then and  there with a new product program and a new concept. Then start the whole business again, slowly but surely. With this simple concept may be an investor would be willing to supply the needed funds. But he needs to be found first...

LGB itself had this to say:
"The ERNST PAUL LEHMANN PATENT WORKS (EPL) in Nuremberg, manufacturer of the world-renowned  Lehmann Big Train is part of the traditional Nuremberg toy industry. The family owned business celebrated its 125th anniversary in July of 2006. Since March 2005 LGB is in serious restructuring. Due to the ongoing negative development of sales within the model train industry the measures to control costs which had started in 2002 already had to be drastically intensified.The 150 employees supported the restructuring process by sacrificing their wages.Due to the close bond  to the production location Nuremberg and the high standard of quality manufactured here EPL gave up manufacturing in the Czech Republic. Safeguarding the jobs in Nuremberg had priority. In spite of these positive parameters the creditors locked the bank accounts on 09/01/2006 and prohibited any product sales. Sales projections and supply-and delivery schedule are according to plan for the business year 2006. Also, the loss producing American subsidiary LGBoA was sold to an US entity with contractual agreements to proceed with the operative partnership long term. Despite of considerable liquidity flowing into the accounts due to the sale they stayed locked.
The banks kept pressuring the owners (of  EPL) who had guaranteed the loans personally to a point where the owners decided to declare bankruptcy, as of today. Interested investors now have access to EPL. With this, the owners opine, the tradition of the 125 years old  world renowned company can continue and the delivery of the New Items Program which is highly anticipated by customers is secured."

YT likes to stress that the article is the opinion of HJ Neumann and the last paragraph ("LGB itself had this to say:") is a statement by LGB itself. HJ Neumann is and was a very loyal LGB customer, editor and author of LGB Gauge II News and member of a local, very big LGB club. During his career as editor he did a lot of interviews with the LGB top management. However, some information was not available to him relating to LGB: Financial structuring of the company for instance, banking policies, bookkeeping practices, asset management, maybe shady transfers, things along that line. Please take this into consideration in regard to his opinion here.
As to the statement LGB gave in September 2006: YT is stunned that China activities weren't mentioned. LGB had transferred major portions of production  since 2000 at least. Oh and please this one: on the day the employees accepted their wage sacrifices, Johannes Richter presented his just bought $ 100,000.00 car in LGB red to the stunned LGB workforce by doing doughnuts in the factory parking lot................
And last: Since 2011 and with SIMBA-DICKIE GROUP Germany taking over Marklin, LGB and others better times were ahead. Today LGB under the SIMBA-DICKIE leadership is a shining example of Gauge II model trains bringing back a lot of the old LGB glamour. The program is good, the locomotive-model variety serves the German market as well as the US market. Customers on both sides 'of the pond' are flocking back to LGB for years now and new dealer stores (some online) spring up in the USA to offer LGB again.

E.P.L. in Bankruptcy ---Remembering 2006 - Part 1

This is an article by HJ Neumann from his blog "IIm Online Nachrichten" that HJ Neumann wrote in September of 2006, just right after LGB declared bankruptcy. This is a pretty long article, no pictures. The bankruptcy fact ripped right into HJ Neumann's heart -  having been a staunch, seriously devoted, lifelong fan of all things LGB. In this article HJ Neumann poured his heart out. YT wants to share his thoughts back then with the occurrence 13 years ago this week.

On Monday September 18, 2006 it was announced that LGB Nuremberg had declared bankruptcy. LGB published their version of the news on the LGB web site.(YT: see original wording in Part 2)

As much as these news stir up emotions:insiders already knew for a long time that the policies management chose for the last years were doomed to fail. Lehmann (YT: the L in LGB) was "resistant to consulting" as a major LGB dealer once said. And he was right! Even though LGB had a many consultants within the last years who delivered their written expertise for a lot of money. But were those really heeded? There was no chance. Did they actually talk about the LGB product in these expert reports; there was no chance for that because they absolutely couldn't have a clue  about that subject. And the product has always been the most important.What does the customer want and what may it cost so he can afford and buy it? That was the '$64,000.00 question' and for years they picked the wrong answers. They never asked their own people, not the salesmen in the field nor the LGB dealers big and small - they just got the crude facts slapped in their faces. In addition (LGB) constantly embarked on hiring the wrong people and thus couldn't even make up for their own incompetence.
"The pilot is disembarking" another author wrote when the former Vice President of Sales, Klaus Baumann, was retired. This statement was true as well. Especially in hard times which we are under for a while now it is important to have somebody who can steer the ship around the cliff. Not one qualified species  was left at LGB in the end. And right off the bat the ship ran aground. She had been off course for a while already and the leakages below the waterline were explicitly apparent. But nobody wanted to notice. The captain had no certified license...

And then there was that eXtra huge whole in the hull. Well, it just sped up the process - it wasn't the cause. But it showed the arrogance , the overestimation of their own capabilities, the misjudgment of  realities. Obviously nobody knew what the market really wanted. Definitely no Disney-, Coca-Cola, Peanuts- and other colorful, often ugly paint-splashes, and predominantly no mangled standard gauge locos. The customer wanted something completely different. But the panel that knew the market was no longer in demand nor consulted. Even though there had been a series of good new items for a few years -  many a fans were staring in disbelief. Compare it to a pack of lions. When a new one enters the scene he thinks he needs to lock jaws with the others. Well if the CEO tolerates this then he has to accept responsibility for that later as well...

"Lifeblood was barely trickling" I wrote about this year's "LGB Summer Fest". But maybe that was nothing but tinted water...
A company that mainly consisted of a giant legal department could not function properly. Definitely not with hobby products for people who wanted to enjoy them. (LGB) put so much weight on  pointless bits and pieces when it was too little, too late, already
The "LGB-family" hadn't been cultivated anymore for quite a while. They liked to take but never gave. The "LGB Depesche" (LGB Telegram in USA) used to be a connecting agent but now resembles a sales brochure. Flat and typical for everything else.
Old friends were spooked and scared away. Those who missed long accustomed-to Christmas cards were  'Bourgeois" or 'small minded'. They petty much had forgotten that these 'small minded' people had loyally supported and upheld (their LGB). And they saw the writing on the wall for a long time coming. And they were wondering why nobody at LGB did put on the emergency brakes. Instead big words and the big show ruled LGB as if nothing had happened. As if it isn't in the last minute of  the eleventh hour..

Pretty fresh in our memories are the stories the LGBoA boss told on how they pampered their VIP customers and the success they had with that. How this all resulted in profits. Lehmann was never destitute for something like that. Their opinion was : They already make enough money with our products!"
Their cardboard boxes got thinner, the protecting cardboard wrapper was omitted. Labels were printed at the factory and in black+white. Thanks to China product quality decreased immensely but prices increased ever more. There was no way this would work out! The eXtra shop annoyed the customer base. Despite well meaning tips it wasn't stopped nor canceled. And nobody can comprehend a New-Item-program consisting only of color variations. What a blistering pace LGB displayed in their early years. Our articles about the LGB history are witness to that. We do remember quite well the statement by the senior CEO of LGB how "Out of each Dollar earned we have to reinvest 99 cents". That must have been ages ago; otherwise (LGB) should have had all those new items on offer with which the competition already had passed them by - and which are still missing in their offerings.
Now it is too late! Singular measures like re-importing US-specialty-products or establishing an in-house  LGB Club were way too late. Karma slaps you in the face when you're that late!

LGBoA was the first to go. And the stories they tell over there are just ludicrous, absurd. Taking a well oiled machine and smashing it into a wall like that - quite a pro you need for that! Where are the models the Americans  wanted to buy supposedly? The "Gallopping Goose", The "Heisler', the "Climax", a "K 28" or "K 27"? Instead they built a "Mikado" that nobody wanted, had gear problems and blocked the form building department for more than a year. They even had a "See Through" F 7...
They even killed the LGB/ASTER series. To choose a GG1 at the very end could be viewed as sabotage, almost. The Wuerttemberg Mallet was way to big in scale and that's the reason it didn't sell. The last 200 engines were re-painted green. You could count on it, now everyone wanted a black one But they were green now!

For a while now people were saying none of that would have happened if Eberhard Richter would have still been alive. May be, but it doesn't help right now. Why didn't his brother intervene in all those years? With all due respect - this question must be permitted.
++++++++++++++ to be continued... Please see part 2 of this article on the next LGB Yarner

Monday, August 5, 2019

LGB Klaus ---- in Google

Last year Klaus got a call from GoDaddy, his web page provider. The information was you either change your web page from the standard of 2011 when it was first published or it will be canceled for good. Technology had simply put its stamp on it and the base it was written on was completely outdated.
They gave Klaus a choice. Rewrite it within a week to the new standard which will be available to you at no charge for this time frame. And so he did. It was a busy 'week' to say the least. Then - it was done. Except for one little tiny matter. To build a library of search words so that when a person out there looks for stuff about LGB Klaus' web page would come up on Google. TrainCraft by Klaus that is.

Easily said................Now Klaus was putting in all the search words he could thing of. First and foremost LGB, then all sorts of words for model trains. And so on. Then trying it out how it worked. Then redoing the library. Then using the web page builder algorithm. And go figure; it worked!!

But Google has their own way of putting information into search logic. And thus a search term was born that Klaus could have never invented himself - even if he tried hard!
LGB Klaus
Now - all of you who have been around the block for a few decades do remember LGB Hans, the store owner of Gold Coast Station/CA. Klaus would have NEVER chosen something so eerily similar to a search term with that kind of history to it. But Google doesn't give a dime about history, relationships, achievements or contexts. It is pure mathematics, algorithms.

There! Type 'LGB Klaus' into Google and see what comes up: TrainCraft by Klaus and all his blogs! There you have it. Whenever you like to see what is new at Klaus just type in LGB Klaus and the whole smorgasbord of Old LGB opens up before you.
desktop image, mobile will look different

Now you ask - and what else is new? Well, get ready for some really big NEWS. Always wanted a Klaus 101? Just you and him? Now you can! Go to Klaus 101 and see.
Ready to call Klaus for reservations?! GO!

Monday, July 15, 2019

Klaus Travels With Guenter Ruhland

Klaus worked with Guenter Ruhland sometimes just as close as he did with Wofgang Richter and Klaus Baumann. Guenter, the Head Mold Master was as essential to the continued successes of LGB as Wolfgang Richter and Klaus Baumann were. Wolfgang had the general idea, Klaus Baumann knew how to sell it or generate demand and Guenter Ruhland was the one to get it ready for production, making the molds and figuring out the "fine print" for manufacturing Wolfgang's ideas. And (Famous) Klaus was at Guenter and Wolfgang's side when technical problems popped up that required expert knowledge, sophisticated solutions and specialized implementation.

Having fun with Guenter solving LGB technical problems it came as second nature to Klaus to have fun  off-time as well. Klaus was a big fan of visiting museum rail roads and as soon as he knew his flight schedule he'd start searching for museum railroads in proximity to the destination airport. When San Francisco appeared in his schedule in the early summer of 1995 he  knew where to go :
The Dixiana Shay, built 1912 at Roaring Camp

The Tuolumne Heisler at Roaring Camp, built in 1899

The Roaring Camp Rail Road in Felton, CA. Located just 2 hours south of San Francisco it is nestled in between red wood forest. The RR is a narrow gauge railroad featuring at least 4 running museum locos, among them 3 Shays and a Heisler. Please visit their website at Roaring Camp RR

Klaus took Guenter in his cockpit (yes, it was before 9/11) and off they flew to San Fransisco. The spend the arrival night in San Francisco and then traveled by car to Felton the next morning. They boarded the train pulled by the Heisler locomotive for the 3.25 mile long track.

In 1995 the Heisler was the only loco to run on that track. Afterwards they trudged through the rail yard enjoying the other museum locos: The Sonora Shay built in 1911 and the rarely used loco  Kahuku, built around 1890 and bought in 1966 from another museum.
The Sonora Shay, built in 1911

They drove back to San Francisco and later had dinner at the still existing Cliff House, a famous San
Fran institution in its own right.

The next day they took a boat to Alcatraz. They were in for a big surprise: the movie "The Rock" was being filmed on Alcatraz, starring Sean Connery and Nicholas Cage. To quote Wikipedia:"Most of the film was shot on location in the Alcatraz Prison on Alcatraz Island. As a national park, it wasn’t possible to close Alcatraz down, and much of the filming had to accommodate tour parties milling around.[9]". Klaus still quips:" Yeah and when we were there, we just saw equipment around us everywhere and cables but no actors and no action..!"
Courtesy of sftravels San Francisco

They flew back to Frankfurt the following day.

Friday, June 28, 2019

Klaus Travels With Wolfgang Richter -- Cumbres and Toltec

Travelling the Cumbres and Toltec Line is a great adventure by itself. "The line is a 3 ft (914 mm) narrow-gauge heritage railroad running for 64 miles (103 km) between Antonito, Colorado and Chama, New Mexico, United States. The railroad gets its name from two geographical features along the route, the 10,015-foot (3,053 m)-high Cumbres Pass and the Toltec Gorge. Originally part of the Denver and Rio Grande Western Railroad's narrow-gauge network, the line has been jointly owned by the states of Colorado and New Mexico since 1970." (quote from Wikipedia, for detailed information go to Cumbres&Toltec Wikipedia.)

Klaus had visited the railroad already and knew about the excellent trip, vistas and overall fantastic narrow-gauge adventure you can experience. In 1995 Wolfgang Richter joined Klaus in Klaus' 50th birthday celebration festivities in Skagway/Alaska. There they came up with the idea to go on a joint trip along the Cumbres&Toltec line.

The summer of 1996 was  as good a time as any to go on and realize their earlier plan. Said and Done. Wolfgang Richter had some business at  LGB of America/San Diego. He organized his itinerary to fly in and to eventually meet up with Klaus in Chama/NM by late August. They stayed in the Branding Iron Motel in Chama which still exists today. For dinner they went to "Vera" to get a steak dinner. Klaus, the ever creative type, had brought a specialty beer from Germany and had come up with a
deal for the owner of "Vera" : whatever was ordered as beverages that night for his table, this specialty beer would be served. You can imagine the surprise that Wolfgang and his entourage encountered when they were served an original dark heavy German beer in the middle of New Mexico's nowhere.

The next day they started their journey on the Cumbres and Toltec to Antonito/CO. Back then you could move through the whole train, each and every car, throughout your time aboard the train. That way they also got to experience the open air gondola.
Arriving in Antonito they stayed at the hotel directly across the railroad depot. Antonito is a very small town, then and now. After an uneventful snack they went to bed to get back to Chama the next day. Another fantastic, scenic train ride brought them to the end of their joint journey.

Wolfgang went back to San Diego to fly back to Germany. Klaus drove to Denver to catch a Lufthansa flight back to Frankfurt. The restaurant Vera doesn't exist anymore. The little hotel in Antonito has gone through a lot of owners. The Friends of the Cumbres And Toltec have a fantastic webcam at  Friends of CST . Enjoy the views!

Wednesday, May 1, 2019

LGB # 2040 -- more than one loco

In 1968 Wolfgang and Eberhard Richter opened the L-G-B part of the company Lehmann Patentwerke with an 8-page catalog offering 3 locomotives and 9 cars ( 3 passenger cars, 3 open/flat cars 2 boxcars and one tank car), 6 different track items, 3 cable sets, 4 figurines, 1 throttle and 1 transformer. The big headline on the front page was " Das War Noch Nie Da" (verbatim "that was never there- yet") which translates somewhat into "You've never seen anything like this" or Nothing like that ever existed".

On page 4 they showcased their very first ever garden locomotives in a scale yet unheard of in toys : 1 : 22

Page 4 of the very first LGB catalog from 1968
The life size models for these locomotives where loco KL 1994/1889 Bn2t Nr.1 of the Austrian Salzkammergut Railway (LGB 2010), the loco 2774/1892 Bn2t Nr.2 of the Steiermaerkischen Railway (LGB 2020) and the loco Krauss XXXII 2700 1923 Nr.4 of the Huettenwerke Siegerland
Life size model Krauss 1923 for the LGB 2040 steam loco
The Krauss locomotive was very similar to the two Austrian locomotives but had a slightly longer boiler. Eberhard Richter saw the general similarity in those types and the chance of making one model and get 3 locomotives out of it by changing cabin color, smoke stack form and offering lighting or not. And so was born the LGB 2040 No. 4 -- and as well the 2010 and 2020.

LGB manufactured the 2040 until 1975. Meanwhile the LGB 2010 (affectionately known as the Stainz) and somewhat less the LGB 2020 turned real shooting stars. Customers couldn't get enough of the cute little locomotive , available as set or single. The price was decent ( DM 95.00 or US$ 30.00) and you didn't need a wooden plate or anything to mount it on. Tracks worked on almost any surface, soil, garden, driveway, floor - you name it. With the lowest price and pretty basic configuration for the 2040 (no engineer, no light) the demand turned more and more to the 2010. The ongoing "Wirtschaftswunder" in Western Germany, namely the enormous economic growth spanning 3 decades helped LGB to sell more and more every year, expanding their offerings from 3 locomotives in 1968 to 20 locomotives (steam,diesel,electric) by 1978.

By then the LGB 2040 was retired for a while replaced by the 2015 and ever more configurations of the 2010. So, when Wolfgang and Eberhard needed a number for the newly constructed Crocodile the number 2040 was just coming in handy. In 1993 they had sold so many locos and had come up with so many new types, series and configurations that LGB expanded the numbering system by one digit to 5 digit numbers.

Hence the Crocodile got the LGB # 2040 and thus became known as such. No matter what configuration or coloring scheme she came in.

Monday, April 8, 2019

A Benevolent Angel -- Frau Grimm and the OLD LGB Parts Department

Klaus' Plea: I want to keep you informed and entertained with our blogs without ads or the need for subscription.It takes great effort and time  to entertain the blog sites. Please support us in our endeavor of keeping the blogs ads-free, the LGB history alive and promoting this delightful avocation by donating any amount you feel comfortable with. Send me a check or go to our Go-Fund-Me page 

Wolfgang(left),Klaus Baumann (center) and Eberhard Richter

THANK YOU for keeping the LGB hobby alive!! And God Bless!

Your donation will help in our efforts to have a new blog at least every week!

The Old LGB Parts Department
At the Old LGB factory at Saganer Street in Nuremberg LGB entertained a parts department that until today still has to find its match. It was most important to Eberhard and Wolfgang Richter to offer every part that was needed to built their LGB locomotives as a spare part for purchase to their customers.
It was in 1968 that they had started their Lehmann Grossbahn manufacturing model trains and at roughly DM 300.00 for a train, A German hobbyist had to spill out the modern equivalent of  US$ 950.00 for a Stainz Starter set. It was therefore of utmost importance to provide spare parts on such a luxurious object and preferably at low costs so customers would not loose interest in a hobby that was sort of expensive in the first place.

A look at the LGB 2018D blowup sketch of the loco shows the enormous number of parts that goes into e.g. the Mogul (shown is page 1 of 4 pages). And remember, there were no computers, no internet. Nothing to help you remember or look up the number of a spare part the customer would ask for. And these blow up sketches were NOT part of the train/loco when you bought it. So, lets say you were missing the bell from the loco. You went and called LGB parts department and said" I need a bell for my LGB loco". Yeah, right. Which loco? Did you know you had a Mogul, a Stainz, a Field Railway loco? This is were Mrs. Grimm comes in.

Mrs. Nelly Grimm was the angel of the repair and parts department. She is the wife of LGB head Meister of Production/Manufacturing Rolf Grimm. Mrs. Grimm had an extensive knowledge of each,every and any LGB spare part ever made. Not kidding. You lost a tiny screw on the bottom of a Salzburger steam loco 2010- she knew and did mail you the right one. You needed a bumper for the blue electric loco 2030? She knew and mailed you the right one. You called and said:"Mrs. Grimm, My Steyrtal loco (U-Series) has its dome cracked, do you have a new one for me. And she would know to ask,:"Is it the one with the ring around the dome or without?"' and you would get the right part. Mrs.Grimm breathed LGB parts. They were here blood and soul. She didn't have to check any blow up sketch, no manual, no list. She knew them by heart. 50.000 parts. By heart. And that is only for locomotives. Add to this the passenger cars, freight cars and box cars. AMAZING!

You can imagine how well liked Nelly Grimm was. She and her husband Rolf were invited to almost every important LGB occasion. Be it a toy fair, a company anniversary, LGB Club affair, big LGB dealer parties. Wherever the who's who of LGB was invited, Nelly Grimm and her husband where right there at Wolfgang Richter's side. Always humble, always very nice and more than often bringing a self-made cake to the occasion so nobody would go hungry and the event would  - for sure - have a "gemütlichen"( homey) feel to it. It might happen that people who collected LGB trains did not know (of) Wolfgang Richter or later his son Rolf Richter as the CEO. But everybody knew Mrs. Nelly Grimm.

Today, Nelly Grimm and her husband Rolf just celebrated his 80th  birthday anniversary. They still live in the same house with their beautiful garden and their LGB train layout.  I don't know of anybody within the (German speaking ) LGB community that would or could ever forget her. I think we all wish she would still be reachable to give us that fantastic help when we need a spare part on a LGB loco that we can just describe as :" That thingy on top of the round body with the wheels on"...

Mrs. Nelly Grimm -- a big Thank You from a far away place, the USA, to you and your husband. And a wistful thought back to good old times....

Klaus' Plea: I want to keep you informed and entertained with our blogs without ads or the need for subscription.It takes great effort and time  to entertain the blog sites. Please support us in our endeavor of keeping the blogs ads-free, the LGB history alive and promoting this delightful avocation by donating any amount you feel comfortable with. Send me a check or go to our Go-Fund-Me page  
THANK YOU for keeping the LGB hobby alive!! And God Bless!

Your donation will help in our efforts to have a new blog at least every week!