Mike Wolf is retiring

[jlong]

His goal was to own Lionel. Not gonna happen.

Customers,
June 8, 2020 - First, on behalf of M.T.H. Electric Trains, I want to thank you for the support and encouragement you have shown my company over our 40-year journey. From humble beginnings and a lot of hard work, we were able to build one of the world's largest model train manufacturers - one unquestionably buoyed by your unwavering support.

In particular, I am proud that M.T.H. has released more models than any train manufacturer in the history of our hobby. The variety, quality, and infusion of technology throughout our offerings allowed M.T.H. Electric Trains to help bring enjoyment to all who share our wonderful hobby.

It is, therefore, with mixed emotions that I tell you I have decided to retire in 2021 and close the business. The last two M.T.H. catalogs, our 2020 Volume 2 O Gauge catalog, and our 2020 HO catalog and all non-delivered items from our 2020 Volume 1 O Gauge catalog, 2020 Ready-to-Run Train Set catalog, 2019-2020 S Gauge catalog, and 2019-2020 G Gauge catalog will feature the last products produced by M.T.H. Electric Trains.

The new items featured in all these catalogs will be available beginning Summer 2020 through April 2021 and will carry our limited one-year warranty supported by our Authorized Service Center network and the M.T.H. Service Department. Upon our closing in May 2021, our ASC network will provide warranty coverage through April 2022. A list of M.T.H. Authorized Service Centers is available on the M.T.H. website and will be updated as M.T.H. Authorized Retailers join the program over the coming months.

M.T.H. Electric Trains would not have enjoyed success without the support of the M.T.H. Authorized Retailer network. While traditional retail has changed significantly over the past decade, the independent hobby shop has been and continues to be the most important cog in our distribution chain. I truly appreciate the support and friendship these shops have shown M.T.H. I wish all of them good luck and prosperity in the years to come.

Finally, I want to thank all of my employees for their hard work over the years. Most of them have been with me for decades and their loyalty and talents were paramount to our success.

With thousands of tools and molds and a wealth of intellectual property, a new model railroading company may arise from my former company as I entertain various options and buyers. One scenario is a new company organized and owned by members of my current staff. Their decades of experience, work ethic, and creative talent will ensure success regardless of who owns the assets while providing a welcome bridge between the past 40 years and the future.

The remainder of my time will be busy as we clear out inventory and other miscellaneous items accumulated over the past 40 years. As that process evolves, we’ll be offering consumer and retailer purchase opportunities

Again, from the bottom of my heart, thank you for your loyal support for all these years.

Mike Wolf, President
M.T.H. Electric Trains

[ScaleCraft]

Saw that. Most everybody figured he'd just go away. One scenario his employees buy it? Right.
Whoever, dump the DCS. Opinion.

[Neil]

Mike got tired of waiting for someone to drive a dump truck up to his lawn and drop 50-100 million bucks on it. Didn't happen, so he's decided to close the company. I think this letter is both a farewell and a negotiating ploy to get the most he can from his staff if they want to operate the company after his departure. And maybe a little advertising, hoping some deep pocketed MTH fan will come forward and make him an offer.

I know this analysis sounds cynical, but Mike has always been the consummate wheeler dealer businessman willing to try anything legal . It's always about the money for most people. So this farewell letter is, in some way, in part about the money. We'll probably eventually find out how and why, but there are some contradictory things in the message. "I'm closing the company ....maybe the employees will operate it." Huh?

[Neil]

And you can bet no one is going to support or buy the rights to DCS if the company disappears. Probably Mike's worst idea other than the bazillion lawsuits.

[robert.]

Pa's labor department would chalk this up to covid-19

[Norton]

Its already been announced two employees will take over parts including electronics in the event the company is not sold as a whole. This has been in the works for over a year. I think Neil nailed it saying Mike was tired of waiting for the insiders to get off the pot.

Pete

[chuck]

Their decades of experience, work ethic, and creative talent will ensure success regardless of who owns the assets

If the employees buy the company won't they own the assets? Also, apparently he sold the headquarters building a few months ago.

I wonder why they are bothering with the "new" products if they are shutting down in less than a year? Didn't they learn anything from the bungled original announcement/product issues with DCS/PS-2? Is he expecting a rush to buy stuff before they close down for good (or bad depending on your perspective)?

Oh well, another one bites the dust.

[G3750]

Mike got tired of waiting for someone to drive a dump truck up to his lawn and drop 50-100 million bucks on it. Didn't happen, so he's decided to close the company. I think this letter is both a farewell and a negotiating ploy to get the most he can from his staff if they want to operate the company after his departure. And maybe a little advertising, hoping some deep pocketed MTH fan will come forward and make him an offer.

I know this analysis sounds cynical, but Mike has always been the consummate wheeler dealer businessman willing to try anything legal . It's always about the money for most people. So this farewell letter is, in some way, in part about the money. We'll probably eventually find out how and why, but there are some contradictory things in the message. "I'm closing the company ....maybe the employees will operate it." Huh?

I think Neil pretty much nailed it as well.

Some other things I think:

• DCS is now officially an orphan product. I know it was hard to tell the difference between the defacto and official states, but there it is now.
• MTH's primary assets of value lay (I think) in their freight car (Premier, Railking, HO) molds and dies. If these are physically in China, both ownership and the ability to move them is in doubt, in my opinion.
• Parts and maintenance is a viable business segment, but I doubt that MTH's supply chain is as organized as Mike Reagan made Lionel's. Obtaining parts will be an issue, I think. At least we've seen that in the shop recently.

George

[Rufus T. Firefly]

And you can bet no one is going to support or buy the rights to DCS if the company disappears.

Just how much longer do any of the patents have to run anyway?

[ScaleCraft]

In doubt....yes, from China? Absolutely.

In another scale, there was this company who wanted to control it all. Got sucked into the "Kool-Aid" trap of letting the PRC company design, generate tooling and build with the PRC retaining ownership.

Various things happened all of a sudden to cause the owner stateside to pull the plug and retire.
There was nothing.

By that time, the name had been sullied (you can only pull the bold-faced lie so many times) and there was precious little goodwill.
PRC owned it. Owner just closed the doors, fire sale of the garbage left in the warehouse (by that point, garage), the only thing he did was split off the electronics line several years prior, and that's still going...but it's a kluge, almost as bad as DCS, even though they publicly claimed their stuff was "better than dcc".

When the PRC owns it, that's the end until they get Bachmann to start selling the stuff for them (which is now happening).
There was another, German company, well known, previous folks in charge decided to send some of the tooling to the PRC to have stuff made cheaper.
Bankruptcy, new owners, bankruptcy, new owners, finally decided to get their tooling back from the PRC. They really did own it.

Nightmare. PRC did NOT want to let it go..treated it like a national asset.
Suddenly all sorts of charges showed up, like "you didn't pay this import duty when you brought it in", "you didn't pay this local bribe when you brought it in..." (joke on that one). Then the export duties.

But if Mikey doesn't own it...and we don't know....after all didn't a lot of this stuff start out in Korea?

I'm gonna stock up on popcorn.

[Neil]

One thing is for sure, those who worshipped Mike Wolf as a God equalled only by Joshua Cowen, and who derided Richard Kughn and Neil Young for their minimal contributions to the hobby will have to find another graven image to worship . Maybe we can find them a golden DCS remote?

Lionel has made some mistakes of course, and there are a few products that clearly were lemons in recent years, but that ship is still sailing without the cult of personality of MTH, the risks of a sole proprietorship when no family members of the next generation have interest, etc. Strange that the closing letter has been removed from some retailer websites. I'd guess they are concerned it will kill some potential sales?

There are still people who shout the misinformation that MTH was the first manufacturer of steam locomotives of scale size and that MTH was the technical innovator, not Lionel. They are obviously ignoramuses who aren't aware of the roles of Weaver, Williams and Right of Way in the scale movement, and that Lionel was starting to contract with Korean companies for similar products long before Mike Wolf became an important force in the industry. And that Neil Young and his crew came up with TMCC long before Mike Wolf belatedly started developing DCS as a response to TMCC. People believe what they want to believe, not the facts that suggest the guy they are worshipping is just another reasonably successful, if contentious businessman . Who did a lot of harm as well as a lot of good. Not any sort of hero in my mind. Just another guy who hustled and did some things well. His trains have always been pretty, for one thing. And if you like poisoning your lungs with mineral oil vapor, his smoke units are second to none.

[MartyE]

And you can bet no one is going to support or buy the rights to DCS if the company disappears. Probably Mike's worst idea other than the bazillion lawsuits.

Appears someone is stepping up and continuing to support it. A MTH announcement said a new company from MTH employees will support and even advance DCS.

[Neil]

Well, for the sake of the hobbyists who are DCS focused, I hope that turns out to be the case. It was developed by a separate group in Detroit, so maybe this is going to happen through that group (? Mike Kreibel or some such name). With no new PS3 products being made in the future, it has a dim future for the long haul I'd guess. But at least there will be short term support for current users.

If Lionel is clever enough, they'll make LionChief + 2.0 or LC +, or even just LionChief available as inexpensive retrofits for MTH, postwar/MPC Lionel and Williams locos. Solidify their market share/dominance and largely drive a stake through the heart of the remaining MTH-only market.

There's this guy on the OGR Forum who has developed a bridge that enables LionChief controllers to talk with TMCC/Legacy locos and enables Legacy controllers to talk to LC/LC+ locos. If that's for real, there will be no reason to replace PS1, PS2 and PS3 boards with expensive PS whatever boards in the future, potentially.

It really looks like the company MTH is disappearing if they are spinning off their DCS people as a separate entity.

[ScaleCraft]

And you can bet no one is going to support or buy the rights to DCS if the company disappears. Probably Mike's worst idea other than the bazillion lawsuits.

Appears someone is stepping up and continuing to support it. A MTH announcement said a new company from MTH employees will support and even advance DCS.

You got a link? All we've seen is his greatness saying "one scenario" is employees buying it.
You would think if this was the case, adding that to the original announcement would have been prudent yesterday.

"a new model railroading company may arise from my former company as I entertain various options and buyers. One scenario is a new company organized and owned by members of my current staff."

[Neil]

Here's the link:

https://www.mthtrains.com/news/659

It does seem very strange that this wasn't part of the original announcement. If it happens, it happens. There's something very erratic about the whole process of how the company is closing down, "it may be run by employees," "no, we are setting up a separate DCS company," "a couple of guys are going to be handling parts." Sounds about the way Dunkirk was evacuated . Hopefully with as much success even if it looks bad on paper.

Lots of statements that seem to contain contradictions, raising questions rather than providing answers. If I were heavily MTH invested, I would not find this reassuring.

Glad I never have been involved with MTH locos since the PS1 era . Well, I did recently buy one. But I'm relieved not to own a few dozen PS2 and PS3 locos and a couple of TIUs.

Make PS1, 2 and 3 Great Again! Just kidding. But they have a ways to go to prove that there are viable business plans to support their 25 year customer base since becoming a substantial company.