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DT
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MRE MAG reports that after a year of turmoil for Märklin, the American investment bank, Goldman Sachs, has come to Märklin's rescue in a bid to buy some of the Märklin family shares. If the current negotiations between the bank and the company are successful, Märklin will receive a cash injection to relieve their present crisis.

The crisis at Märklin has been gradually deepening as a shrinking model railway market has seen an ongoing fall in demand for their products, taking the company into the red. Besides being the oldest model railway manufacture (Märklin was founded in Göppingen
in 1859), the German company has been one of the world's largest. In the late 1990s they took over the rival German manufacturer, Trix.

Märklin's boss, Paul Adams (pictured above left), blames interest charges on the crisis claiming that the company has been making a trading profit. However 600 staff have been laid off over the last two years leaving a workforce of 1400.

[Via Model Railway Express MAG]
 

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Goldman Sachs have also recently bid for ITV so they clearly have a bit of money in their coffers at the moment.

What chance Roy Cropper will suddenly have an interest in German trains at some point in the future in the event of ITV finding itself with the same masters as Marklin?

Happy modelling
Gary
 

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QUOTE If the current negotiations between the bank and the company are successful, Märklin will receive a cash injection to relieve their present crisis.

There is no free meal in business.

Negotiations are current. Nothing has been agreed. Banks are banks.

And they talk about relieving their present crisis.

What about 3 years time?

This seems like a black hole.

There is probably a Marklin enthusiast at Goldman Sachs and he is influencing the board. Marklin are the Meccano of 2006. Rolls Royce product but how many people buy a Rolls Royce?

The real issue is that not enough people are buying Marklin products in their current form relative to the production levels. And if Marklin move downmarket there is a lot of competition. There will almost certainly be a downsizing of the operation and only the nuggets will remain. Jobs will go. However this is probably what is required.

Simply playing devils advocate here as this appears to be a business discussion.

Happy modelling
Gary
 

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I seem to remember that a venture capital fund of Goldman's owns Sander Kan, producer of Hornby's stuff (and many others). Buying a top brand would move them into the marketing & sales side as well as manufacturing. It's the only business model that works right now - but watch jobs go in Germany. Sander Kan's and Kader's payrolls dwarf the numbers employed at Marklin.

Marklin's stuff is wonderful - I'd love a Trix crocodile but can't justify the asking price! Same quality but lower price if made in China?
 

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It's possible to get the same quality from China but it takes a level of commitment in training and equipment. It also helps if the sub-components are made in China with final assembly and testing in Germany. That's being done right now by Marklin, they just don't publicize it.


Oh and the crocodile, got one of those on order in N-Scale. (DCC)
 

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QUOTE "The real issue is that not enough people are buying Marklin products in their current form relative to the production levels. And if Marklin move downmarket there is a lot of competition."

From the information on Trix's Profi club DVD they have already started down this path. They are addressing the need for cheaper models due to the contraction of the German economy. They have brought in a heap of reasonably priced starter sets to get the kids interested and try to gain brand loyalty from a young age.

They also seem to have saved on development costs by making about 5 versions of the same loco with different logos on the side.

In this years range of new models there are far more cheaper models than in previous years. Whereas last year there were plenty of models in the 300 Euro and above bracket, this year there is only a couple that I can think of. There are none of the excessive 700 Euro plus models of previous years.

I still occaissionaly buy their stuff as I like it. I just have to buy less of it due to the price. I suppose that if you were to get a Hornby Steam loco and put a sound decoder and lighting into it then the price difference is not that much.

As regards making them in China, the quality of detail of the latest Hornby locos is probably slightly better than Marklin/Trix. The running quality is the main difference.

If they are to compete with other companies they really have no alternative but to make some adjustments somewhere or end up as a niche manufacturer producing only "Rolls Royce" products.
 

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It's a tough choice and the German buyer is traditionally very demanding. It's especially troubling to me as they are my favorite brand. I wouldn't mind buying the "Rolls Royce" products but few come in N Scale. I guess I better increase my locomotive purchase to once a week before they end up as nothing more than Hornby wanabies.
 

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News came in on marklin

http://www.spiegel.de/wirtschaft/0,1518,408302,00.html
(sorry Germany text)

I use translation to english (not 100% sure)

Cult firm-SALE

Märklin before the departure in the uncertain

In the year 1859, Märklin was established as a families business in Göppingen, enthused the model trains of the firm generations of customers. For years however it has suffered from cheap competition - now is sold Märklin probably at a British foundation.

Frankfurt/main - it is lost again once one of these stories of the descent of a German middle-class person, that was long leading in its market segment, then however the connection. Already today the most important production plant lies for Märklin out of costs reason no longer in Germany, but rather in Hungary. The number of the jobs at the schwäbischen firm was sunk to in the past years around more than 600 presently approximately 1350 places, are disconnected this year probably further 150. And now a new, incisive change is forthcoming for Märklin: A British investor would like to get into at least as a partner - even entirely receive and Märklin perhaps.

DPA
Miniature steam locomotive of Märklin: What do the Britons plan?

It concerns the British private-Equity-firm Kingsbridge Capital Advisors. It would negotiate got into presently with the Märklin-properties over one, reports the news agency Reuters, and quoted an informed person with the words: "It seems on a unification to run out." Would be open yet whether it would concern a full acceptance or only a participation in families business out of Göppingen. According to Reuters, a second person confirmed the conversations. Also the "economy week" had reported already over a possible Märklin-sale at the British foundation.

Do the house banksplay?

Märklin has suffered for years from the sinking demand after expensive quality toy, also the growing competition out of Asia makes to create the Swabias. The owner families had determined four years ago the Paul Adam to the Märklin-boss and had delegated with the rehabilitation. The business had started then a deeply grasping restructuring in the autumn 2004. The revenues however decayed further.

FORUM
Rehabilitation drafts - stroke concert without new ideas?

Discuss with other SPIEGEL ONLINE readers!

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That got into could take place the Britons via the sale of credit. The US investment bank Goldman special it Should in the order of Kingsbridge already several million credit acquired have, that Märklin must repay. So a credit tranche, that had made available originally the DZ bank, had been passed along, to Goldman. Both banks wanted to relate no position to these reports. Loudly "economy week" duy wants to place Kingsbridge the Märklin-credit - wants to transform and then in equity.

Whether really all Märklin-banks play, is presently yet open. The Commerzbank Not yet had decided whether it wanted sell its credit also, was named it in the magazine. The district savings bank Göppingen and the country bank Baden-Württemberg would stand obviously to Märklin - at least yet for the moment.
 

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So Goldman Sachs are acting on behalf of a British investor. Are Marklin about to fall into British hands?

Happy modelling
Gary
 

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QUOTE (Gary @ 28 Mar 2006, 08:34)So Goldman Sachs are acting on behalf of a British investor. Are Marklin about to fall into British hands?

So, virtually the whole model Rail Industry of Europe is in british hands then.

Perhaps Goldman sachs can break up Märklin and ruin hundreds of lives, like BMW did with Rover.
 

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Read a piece in the daily star of all papers that Goldman Sachs are also rumoured to be part of a consortium looking at buying ABP(the association of British ports)as well so it looks to be spend spend spend month. Probably go bankrupt next year then!!
 

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I may be wrong but the impression is that Goldman Sachs are acting as financial advisors for a British investor and are not making a direct investment.

In general terms it is much easier for an outsider to make the hard decisions than a member of the family. There is not normally any emotional attatchment.

Think of the uproar that there was in France when Lima moved Jouef model railway production out of France. Apparently the French Jouef factory was barricaded and the moulds were hidden so that Lima could not get their hands on them! The French possibly were being French! There was little evidence of this when Hornby moved production out of the UK however wouldn't it have been interesting if several hundred Hornby fanatics had stormed the Margate factory and saved the moulds for the nation. On the contrary, broadly speaking, it was welcomed among British customers if it meant they got better models at sensible money. I guess this was down to the Hornby PR machine at the time. Would you all like to picture the French PR machine and what the French press were saying about Jouef!


Will Marklin customers react in a "British" way or a "French" way to a "Hornby type" restructuring if it happens?

Happy modelling
Gary
 

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I wouldn't have thought the German Rail Modelling public would have stood for any drop in quality. They are very demanding people. Any drop in standards would lead to a drop in sales. I really don't see Germans standing for the quality of locos we are dished up in the UK. We British are far too tolerant for our own good. I suppose thats why we are 10 years behind in terms of model rail technology.
 

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Aaaah, now then:

I have started on my model railway. Board down, and layout pretty much in my head. I thought I would try and cut a corner by buying the Fleschmann profi track ( ready ballasted ) It looks great, and seemed a good Idea. Well, all of my old stock ( Tri-ang ) won't run on it, as the rails are not high enough !!

So I ended up taking all of it back and getting the "normal" Fleischmann track. That stuff is not the best in terms of colour ( bronze ) but at least all of my old beauties can run without the wheel flanges touching the sleepers.....

Naaah, take away Märklin from the germans. Give them a little back of what they did to us !!

Its just like when vodafone took over Mannesman they kept the profitable parts and dumped the rest. The germans were furious about how a company could do such a thing. BMW has done the same to Rover, so now it's our turn again !! And what better Company could we get than Märklin ??


And anyway. If you don't like OO out of scale track
, the 3-Rail Märklin stuff must be the worst thing ever. It may have 1 advantage ( Loop w/o short curcuit ) , but it looks awful and non realistic too. I prefer the Hornby, roco, Fleischmann anyday to the Märklin crap.
little

nudge nudge wink wink

highway
 
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