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According to the Stuttgarter Nachrichten Marklin is in negotiation with there Goeppingen Employees to cut their Wages by 20% across the board.

This does not look good at all since all ready Inflation in Germany is going up and up (Energy Costs/Food etc.) many Workers will be very unhappy. On top of that Marklin will not disclose what upper Management is earning.

http://www.stuttgarter-nachrichten.de/stn/...rzt-werden.html (Germany Text)

Google Translation: German » English
Dusseldorf - The staff of the Swabian model train manufacturer's Marklin must, according to a report of massive wage cuts lie in wait. On the 600 employees in the company's headquarters in Göppingen could lose up to 20 percent of gross wages, reported the "Handelsblatt" on Tuesday, referring to the business community.

Märklin had in the past week stated that the cost base of the company was "still too high to be economically successful in the long run," reported the paper. Therefore, the management discussions with the council. At an employee meeting was Goeppingen in the personnel cost savings target of five million euros. A company spokesman rejected the report that a breakdown of staff costs on request. The council wanted, according to the sheet to the talks with the management not comment.

The "Handelsblatt" reported that there existed over internal accounts. It would be personnel costs in Goeppingen at around 20 million euros. To the proposed savings goal should be, on average, each employee in the company's headquarters at up to 600 euros gross per month refrain. The achievement of savings targets should be extremely difficult. Layoffs are excluded, as the company securing an employment contract applies, the layoffs until the end of 2009 prevents.
 

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DT
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I was looking at this and tried to get a translation that I could make sense of. It seems that the Märklin staff and even industry analysts are not happy with how things have turned out since the Kingsbridge deal.

The cost of production is still too high. Increasing production does not solve this problem. You make more trains, you need more people and if those people are Europeans, they demand high wages and social benefits that are expensive to any manufacturing company.
 

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Otoh, 5 million Euro is the figure for payments to external advisors, and if the CEO would reside in a residential area rather than a castle...

Oh yeah, and the quality issues would have to be resolvd.
 

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DT
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It sound like the CEO Axel Dietz is being pushed out and that Kingsbridge are looking for a buyer.

From the stories that I'm seeing, the people at Märklin at not optimistic right now and with 2009 being their Jubilee Year, I think that they can expect rain on their parade.
 

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Do you think this is only because the high production costs, or the fact that Marklin models tend to be more costly than other manucaturers? I definitely feel that in the garden railway range.
 

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DT
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QUOTE (Nygma @ 5 Aug 2008, 15:01) <{POST_SNAPBACK}>Do you think this is only because the high production costs, or the fact that Marklin models tend to be more costly than other manucaturers? I definitely feel that in the garden railway range.
I think that the production costs are key to the success of the brand. They are selling good quality products, but just producing and selling more of the same may make more money, but it also costs more to manufacture. They have to bring down production costs.
 

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Chief mouser
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It all seems very familiar, and not a million miles away from what happened to a certain British company.

Regards
 

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QUOTE (Doug @ 29 Jul 2008, 15:23) <{POST_SNAPBACK}>I was looking at this and tried to get a translation that I could make sense of.
My apologies Doug, I forgot about your message regarding this.

I suppose the news seems bad but then Maerklin only recently announced the divergence of model characteristics for the Maerklin and Trix brands which presumably will have a (small) good effect on their business? And the other thing with the 'credit crunch' is that I would say that regular buying of shop new model trains in Europe is the pursuit of the middle to high earners who of course will not feel the crunch so much on the whole so I don't think outlook is too gloomy.

Despite that pay cuts really won't motivate employees, and give the impression that the writing is on the wall anyway...better to consolidate back to the core range and prune the fringe activities and of course the expensive advisers etc. Seeing someone like Hornby (not chosen in particular only someone mentioned them) come in like a vulture and asset strip the moulds etc. so they can do endless reruns of old stuff (that seems the plan with Arnold) would be distinctly unpleasant. If the alternative is production further East than currently is the case (I notice Minitrix no longer says made in Germany underneath and I believe is made in Eastern Europe) then I think there will be no way to avoid it, unless the model ranges move furthrt up market and become more expensive...it allows them not to go to China but they will have to become a much smaller operation?

Hmmm. Let us see what happens!
 
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