Wednesday, January 31, 2007
Do you have Lionel? We have some "add-on sets" from Lionel that contain 3 RR cars and some additional track. We also have individual RR cars and some operating accessories from Lionel.
Come in and browse around. I'm sure we have something to add to your enjoyment of The World's Greatest Hobby.
To kick off the new year, The N Scale Architect is releasing the N-Scale version of two very popular HO kits from our Railway Heritage Models product line, the Reading Company Standard Tower and Central of New Jersey Standard 2-Story Station !
Both of these kits were developed using actual prototype plans and are of structures that were replicated at numerous locations along the tracks of these two popular Northeastern railroads. Further information on these exact locations and detailed painting instructions are included with each kit along with our usual high quality laser-cut micro-plywood pieces, castings, roofing material and step-by-step instructions. Both of these kits are now available for immediate shipment.
Tuesday, January 30, 2007
found NS 24V holding the Lehigh Line's main here for NS 213. Power for 24V would be PRR 8434 (C40-8W, ex CR-6256), NS 6641 (SD60) and NS 7129 (GP60).
At 10:35, 213 [Elizabethport, NJ-Atlanta, Ga] would start to take the siding. Power on 213 would be NS 8950 (C40-9W) and NS 2504 (SD70, ex-CR 2504).
After 24V went west, another eastbound headlight appeared off it the distance. This headlight would belong to NS 9496 (C40-9W). That would be on the point for NS 214 [Atlanta, Ga-Croxton, NJ]. BNSF 7721 (ES44DC) and BNSF 1049 (C44-9W) were the additional units spotted on 214.
Not a bad way to spend an hour on this dreary Saturday morning at Flemington Jct (NJ).
Thursday, January 25, 2007
MTH and Lionel Appear in Bankruptcy Court Today
Judge Directs the Parties to Mediate and Attempt Settlement of Their Legal Matters
January 9, 2006 - For the first time since December 14, 2006, when an appeals court vacated MTH’s $40.7 million dollar trade secrets verdict against Lionel, and remanded the case for another trial, attorneys for the two rival model train makers appeared in the Bankruptcy Court for the Southern District of New York today.
My summary of today’s legal proceedings will be a little different this time, compared with the past. I was present in court today to observe the proceedings, (as was Stuart Rankin aka OGR forumite Lionel LLC). In the past, my information was based on conversations with the party’s principals or their attorneys, or by reviewing the legal documents filed with the court.
Today’s legal proceedings were significant enough that both MTH’s Mike Wolf and Jerry Calabrese were present in court today. The two men shook hands upon seeing each other.
After making several applications for interim compensation on behalf of the attorneys and other professionals representing Lionel, which were quickly approved by Judge Lifland, their attorney Adam Harris, represented to the court that although the appeals court decision was very favorable to Lionel, they were still interested in settling the outstanding trade secrets case, and separate patent infringement lawsuit brought by MTH in June. Mr. Harris proposed to the court that a neutral third party mediator be agreed to by the parties so they could discuss settlement. Not surprisingly, he stated he expects the appeals court to deny the petition for reconsideration of its December 14 decision, filed by MTH with the appeals court on December 28. He also stressed it was in Lionel’s best interest to exit from bankruptcy as soon as possible as there are companies that will not do business with them until that occurs.
Mr. Alec Ostrow, representing MTH, then addressed the court. His proposal was that Lionel be directed to pay their other creditors in full, so they would not be prejudiced, and that the parties continue to litigate the legal matters between them. As Mr. Ostrow was discussing continuing the litigation between the parties, Judge Lifland, politely but firmly interrupted, and inquired why there was no response to Lionel’s proposed offer of settlement talks between the companies, or agreement to mediate their differences with a neutral third party. Mr. Ostrow requested a short adjournment so that he could confer with MTH’s Mike Wolf. Judge Lifland granted the request. Both Jerry Calabrese and Mike Wolf exited the courtroom to discuss matters with their attorneys.
After re-entering the courtroom, Mr. Ostrow informed Judge Lifland that MTH would agree to mediate the remaining legal issues between the parties.
Judge Lifland informed both sides they have 7 days to agree to a mediator. Mr. Harris proposed that one of the other bankruptcy judges be appointed, rather than selecting one through a private mediation company. Mr. Ostrow agreed this would be acceptable. Judge Lifland stated he would make an inquiry to some of his judicial colleagues, and would notify the parties if one of them would agree to do it. Judge Lifland noted that a “retrial of the trade secrets case would not be palatable to either side, and the lawyers should get out of the way.” In other words, he told the attorneys that they are not to be present when Mr. Wolf and Calabrese discuss settlement of the case between themselves or with a mediator.
Judge Lifland also informed the parties that if the legal issues are not resolved through settlement within one month, he would conduct a Bankruptcy Code section 502c estimation hearing on damages. This procedure allows the court to make a determination of any potential damages MTH would be entitled to for both the trade secrets lawsuit and separate patent infringement lawsuit (the patent infringement lawsuit was filed in the bankruptcy court since Lionel’s bankruptcy was already pending there). Mr. Ostrow stated an estimation hearing would be inappropriate if the case is not resolved through mediation. I suspect his rational for this is he would prefer to allow a jury to decide damages in the trade secrets case, as it did once before (prior to it later being vacated by the appeals court). Judge Lifland responded by stating he would not allow the bankruptcy to continue indefinitely. Lionel has been in bankruptcy since November 15, 2004 a period of over two years.
Both parties were also directed to work out scheduling orders for each litigation matter, even if it looks like the legal matters will settle.
Hopefully, the apparent willingness of both sides to discuss resolution of the various legal matter s between them, coupled with the judge’s directives, will result in a settlement of their legal disputes. Stay tuned
Please, let’s keep all follow-up posts civil, and avoid rude comments and speculation. Thanks.
Saturday, January 20, 2007
Here is a set of pictures of a UP rotary snowplow working in western Kansas, near Wallace, around New Year's day. It seems to be working east, and probably came out of the Denver area.
UP Rotary 900082 coming almost straight at the camera.
Just west of overpass
Standing on overpass. Note top of guard rail in foreground.
Note depth of drift the plow just went through. This is the back of the work train.
Coming up to Wallace, KS
Wednesday, January 17, 2007
The first set of pics are of a CN coal train on the ex BC RAIL/PGE that was hit by a snowslide. Don't know exactly when this happened, but the email was dated 1/11/07. The email also included the following text: "CP also had a major avalanche on the Mountain Sub at the west end of the Mount McDonald Tunnel yesterday blocking the railroad and the trans-Canada highway."
Saturday, January 13, 2007
BALTIMORE - Rush Loving, Jr., author of the best selling book, "The Men Who Loved Trains," will appear on cable television network C-Span next week discussing his book. The interview was taped at the B&O Railroad Museum in Baltimore. It is scheduled to air on C-Span Sunday, Jan.14 at 7 p.m., Eastern time and be repeated at 1:30 a.m. Eastern time Monday, Jan 15. Loving's book offers a behind-the-scenes look at the boardroom battles to save America's northeastern railroads beginning with the lead-up to the Penn Central merger through the Conrail break-up in 1999. Loving is a journalist and former associate editor of Fortune magazine who covered the demise of Penn Central and the creation of Conrail.
along the Lehigh Line in Hunterdon County (NJ) provided Saturday morning's vantage points and photo landmarks. With temperatures in the mid-sixties, I had to pinch myself to make sure I wasn't dreaming and this was actually January and not early spring. The line up of NS trains was as follows:
NS 19G rolled by Flemington Jct (CP51) @ 8:32-Motive power was two C40-9Ws, NS 9159 and NS 9509, along with PRR 3026 (GP40-2, ex-CR 3324). Behind these three there was 151 cars of freight. Car 146's appearance provided a nice sight. It was a Rio Grande boxcar. I haven't seen many of those during my time trackside. 19G would be instructed to take "...the long siding at Pattenburg..." as it passed by CP51 so that 21M could pass by.
NS 21M-Bloomsbury @ 9:30-Motive power would be NS 8931 (C40-9W) and NS 7535 (ES40DC).
NS 24V-Bloomsbury @ 10:24 was the time when 24V would pass beneath the Milford Road Bridge.
NS 18G-Jutland @ 11:30-Motive power would be NS 9809 (C40-9W), PRR 8329 (C40-8W, ex-CR 6074) and HLCX 5980 (SD60) would take the siding at Flemington Jct.
Warm temperatures and a nice array of trains made for an enjoyable morning. No complaints from me on this day!
Tuesday, January 09, 2007
Following is from Model Retailer 01/07.
"DeLuxe Innovations changes hands, coasts.
N-scale model-railroad manufacturer deLuxe Innovations has changed ownership and locations.
Founded in 1993 by George Johnsen, the company will now be headed by Dave Ferrari, a veteran of the model railroad industry. Ferrari is the founder of Squeak N Products and held a position at Atlas Model Railroad.
As for the name, deLuxe is now DeLuxe with a capital D and purple triangle logo. It is moving its headquarters from Burbank CA to Whippany NJ, appropriately in a 53 ft. CSX intermodal container on a double stack train.
Veteran deLuxe managers Steve Rodgers and Craig Ross will stay with the company. Rodgers and his dealer sales office will remain in IL. Atlas veteran Wayne Shortman has joined the team."
Check out the web sites.
Monday, January 08, 2007
I decided one more trip trackside was on my agenda. Despite overcast skies I headed out along the Lehigh Line at various locations on this Saturday morning. The trains and their locations are as follows:
NS 21M (North Bergen, NJ to Chicago, IL-BNSF) -Bloomsbury, NJ (MP 69) @ 9:10-had two SD70M-2s, NS 2771 and NS 2745, along with NS 9962 (C40-9W) for power.
NS 19G (Oak Island, NJ to Pittsburgh, PA)-Jutland, NJ (MP 60.8) @ 9:36- was laboring with 104 cars of freight as it approached "NJ's Continental Divide" at Pattenburg Tunnel. Motive power was NS 9711 (C40-9W) and PRR 8443 (C40-8W, ex-CR 6271).
NS 24V (Harrisburg, PA to Dockside, NJ)-Flemington Jct. NJ (MP 51) @ 10:30- had NS 9343 (C40-9W) and CEFX 3166 (SD40-2, ex-UP 3360) bringing the containers east on this overcast Saturday.
In closing, I hope that 2006 was a good year for you and that 2007 will be even better...
Sunday, January 07, 2007
With regard to the delivery of TMCC II, that is now scheduled for Late February, pursuant to a discussion with Mr. Calabrese last week. The story states January, but it has been pushed back since then.
The Past Is Prologue
Train hobbyists familiar with the history of Lionel® know that when New Yorker Joshua Lionel Cowen entered the electric train business more than 100 years ago, he setup shop in lower Manhattan. During Lionel’s golden years following World War II, the company had an office and display showroom at 15 East 26th Street in mid-town Manhattan. After General Mills bought Lionel in 1969, the company moved to Chesterfield, Michigan. The connection to New York City all but disappeared.
The good news is that on February 16, 2006, President/CEO Jerry Calabrese announced in an online press release that Lionel would open an office and showroom in Manhattan. In essence, the company has come full circle and returned to its roots in New York City. On October 17, 2006, I visited Lionel’s new office and met Mr. Calabrese, who now works at this location as home base (see photo 1).
The New NYC Office
The new office is located in the NAP building, on the northeast corner of Madison Avenue and 33rd Street, not too far from the old office/showroom on 26th Street. The offices for Calabrese and Vice President of Marketing Mark Erickson are on the 11th floor. A large room on the second floor currently contains three small operating display layouts shown in photos 2, 3, and 4. Currently, the room is used to display and demonstrate Lionel products to corporate buyers from retail stores.
Jerry explained the purpose of a New York City office as “Being close to the executive offices of potential retail buyers, such as those who attend Toy Fair, and licensors like NASCAR. Retail buyers representing the major department stores will not travel to Chesterfield to see Lionel products,” he said, “so if they won’t come to the mountain, we’ll bring the mountain to them.”
The Man and His Plan
Calabrese became the President and CEO of Lionel LLC in September 2004. Prior to that, his career posts included: President of Marvel Comics Group, the ad agency of record for NASCAR’s 50th anniversary in 1998, a Senior Vice President for Playboy, and Editor of “Games” magazine. He is an expert at rebuilding and redeveloping hobby-based businesses, which of course makes him ideally suited to lead Lionel.
When I asked him about Lionel’s current marketing plans, he was eager to talk about it. He has a specific two level vision for the company — to offer a diversified line of high-quality Lionel products and to broaden the retail base where the company’s trains can be purchased. He cited The Bose Corporation® (maker of speakers, Surround Sound™ systems, and the Wave Radio™) as a business model that Lionel should try to emulate.
Quality throughout the Line
“In order for Lionel to be successful, we must offer a diversified product line in terms of cost, but with high quality,” he said, “beginning with a $200 starter set such as the Pennsylvania Flyer set [6-30018] for first-time buyers at one end of the spectrum and continuing to top-of-the-line products such as the Acela set for $2,000.”
He stressed that quality consciousness must include everything in between: low cost accessories, expansion packs, and mid-priced engines in the $300 to $800 dollar range. “Once a ‘newbie’ to the hobby has purchased a starter set, the next step may be to add-on an expansion pack for that set. That’s why we offered them for the less expensive starter sets a couple of years ago. Similarly, it’s the reason for presenting additional passenger cars, the elf hand car, and an add-on figure set for our very popular Polar Express set [6-31960]. The third step would be to point customers to a mid-priced engine, and the ultimate goal would be to get as many devoted enthusiasts into the hobby as realistically possible.”
Seeking Retailers but not Discounters
Jerry emphasized that Lionel must expand its retail base beyond the traditional hobby stores in order to reach more first-time buyers and bring them into the hobby; thereby increasing sales. “Lionel needs to sells trains in mainstream retail stores where they will be discovered and purchased by the general public,” he said.
“We have worked hard to convince upscale retail stores to carry Lionel train sets with the understanding that the trains would not be cheaper versions of cataloged sets nor built-down to meet a certain price point. We told retailers of the value, tradition, and quality of the Lionel brand, and we pressed for agreement about not discounting the sets. Also, retailers will not be entitled to sell our other items such as track and operating accessories. Those products will be reserved exclusively for the hobby store market.”
Making a Christmas List
He cited several specific examples of how Lionel would accomplish this during this holiday season. First, they teamed up with Target, the nation’s second-largest retail store chain, as its exclusive general merchandise retailer. Target will sell an exclusive uncataloged starter set with the venerable 4-4-2 Atlantic steam locomotive and tender with Trainsounds and four freight cars for $249. The set will include such extras as a tractor-trailer truck, play mat, and railroad signs. Jerry excitedly referred to this set as “the big box of trains” (see photo 5).
Lionel will also provide its starter sets to upscale stores including Macy’s, FAO Schwartz, Dillards, Fortunoff, and Belks this Christmas season. All these stores will carry the Polar Express set, O-gauge Christmas set [6-30039], and the Holiday Tradition Express G-scale Christmas set [7-11000] (see photo 6). Lionel has sold almost 20,000 G-scale Christmas sets to retailers and hobby stores.
Most of these stores will also be selling the Thomas and Friends set [6-31956]. Macy’s will offer the Pennsylvania Flyer set and the New York Central Flyer set with Trainsounds. Because it is located in the south where NASCAR events are very popular, Belks will also be selling NASCAR train sets.
Due in part to these efforts, Calabrese expects Lionel’s gross sales for 2006 to be in the $65 to $70 million dollar range. Lionel will honor its one-year warranty for purchases made in retail stores as a confidence builder.
Visual Excitement on Rails
Lionel has installed operating display layouts in some retail stores — at Macy’s in New York City, FAO Schwartz stores in New York City and Las Vegas, Fortunoff stores in New York and New Jersey, and the Dillards store in Dallas, Texas. All the stores will have one or more of the three layouts shown in photos 2 through 4. TW Designs in Dallas, Texas built the layouts.
Lionel will also operate two large public layouts during the holiday season in New York City; one at the New York City Transit Museum within Grand Central Station (42nd Street and Lexington Avenue), and the other in Santa Land at Macy’s at Herald Square (34th Street and Sixth Avenue). The Grand Central layout will be open through January 15, 2007.
What’s Happening Now?
He described Lionel’s much-anticipated, new Big Boy locomotive, the first engine available with TMCC II Legacy Command Control™ as featured on the cover of the 2006 Volume 2 Catalog. “Dealer orders for this locomotive exceeded expectations by fifty percent — an encouraging situation, especially since this locomotive is expensive, listing for $1,700. The free Legacy set offered with this loco was the driving force behind it.”
Both the locomotive and TMCC II are currently scheduled for release in January 2007. TMCC II was first demonstrated by Jerry and Lou Kovach in Denver during the LCCA Convention in July.
NASCAR train sets were scheduled to hit stores in mid to late November, in time for the Christmas season. The NASCAR expansion packs are scheduled for release in January or February 2007, in time for the beginning of the car-racing season.
Regarding the future integration of the K-Line brand into the Lionel portfolio, Jerry said there will new K-Line products offered in 2007 with an emphasis on mid-priced locomotives in the $300 to $800 range. On a related note, K-Line orders from the old K-Line Collector Club, most notably the SD-70MAC diesel locomotive, are scheduled for January 2007 delivery. Lionel previously agreed to honor Collector Club orders placed before K-Line declared bankruptcy but not delivered.
What’s Happening Next
Lionel’s product plans for 2007 will include an O-gauge Harry Potter Hogwarts Express passenger train set for release in the summer (see photo 7). This set will bear a retail price in the $300 range. Jerry hopes this set will become the successor to the popular Polar Express passenger set.
Lionel will offer familiar trains in G scale: a Polar Express set and a Thomas the Tank Engine set. To me, the most interesting thing about these sets is they will be powered by a rechargeable battery pack instead of a transformer and operated by an infra-red remote control. The trains will be retail priced in the $130 to $140 zone. Lionel has entered into licensing agreements for these sets. Jerry showed me a pre-production sample of the Polar Express set (see photo 8). The locomotive will not have a puffing smoke unit. The observation car has a panel in the roof that flips and shows the “hobo ghost” from the movie on one side (see photo 9).
A G-scale General set will also be produced. With the rechargeable battery pack and remote control, it will list in the $120 to $130 range, as a licensing agreement is not involved. Lionel will also offer low-cost accessories to those who have previously bought starter sets. One of the items will be a play mat with computer-generated imagery on it. The ballast on the production sample was so realistic that I had to touch it to determine if it was real ballast or part of the computer-generated picture.
A second accessory item will be a “scenic panorama” desert scene (see photo 10). The panorama will have openings through it so that track and a train can pass through. It is possible, but not yet definite, that the computer-generated play mat and scenic panorama will be sold together as a modest-cost accessory set.
Stay Tuned for More
I’m sure there will be other surprises in the pipeline for hobbyists in 2007, but I didn’t expect Calabrese to reveal them all and risk deflating the excitement when the Lionel 2007 Volume 1 Catalog arrives in a few weeks. Monitor your mailbox!
Tuesday, January 02, 2007
on the Lehigh Line near Manville (NJ) and they were as follows:
NS @ 7:55 This westbound train's symbol was unknown and spotted at the Roycefield Road grade crossing. For power it had PRR 8330 (C40-8W, ex-CR 6076) and NS 8763 (D8-40C). Its consist was a combination of empty auto racks along with mixed freight.
NS 19G (Oak Island, NJ to Pittsburgh, PA) @ 8:15-Power was two C40-9Ws, NS 9522 and NS 9346. Behind them was 148 cars of mixed freight.
CSX Q300 (Philadelphia, PA to Oak Island, NJ) @ 8:20-had HLCX 8142 (SD40-2, ex-BN 8142) and CSX 7787 (C40-8W) for power.
NS 24V (Harrisburg, PA to Dockside, NJ) @ 9:10-had NS 9473 (C40-9W) and UP 4914 (SD70M) for power.
Hope everyone has a good holiday...