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Offline plavnostruev  
#1 Posted : 28 October 2007 05:00:58(UTC)
plavnostruev

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Joined: 18/11/2004(UTC)
Posts: 756
Location: New Jersey, USA
Article about Marklin in Financial Times, nothing earth shattering, but still.



Switch trains for survival

By Peter Marsh

Published: October 24 2007 17:32 | Last updated: October 24 2007 17:32

Drastic action was needed when Axel Dietz took over as the chief executive of Märklin. Though the 147-year-old German model train maker had an unrivalled brand name, sales had plunged nearly 30 per cent in three years.

Mr Dietz says: “The company was failing to show enough imagination in its product range and had lost control of costs.”

Märklin is one of many manufacturers in Europe that have been forced to learn to do things differently by competitive pressures. Their managers may despair in the face of low-cost rivals and changing customer demands. But sometimes applied common sense – as well as some verve – are all it takes to survive and thrive. As four survivors’ stories show, there is more than one way for a struggling operation to regain its health.

Revamp production

When UK investor Kingsbridge Capital acquired Märklin last year from its family owners, sales had dropped from €170m in 2002 to €124m in 2005.

After reorganising its factory and introducing new products, Mr Dietz believes the Göppingen-based company is on the road to recovery. Any restructuring, he says, had to take account of the special nature of Märklin’s output. “Many people regard model trains as toys but they are actually high-tech.” Collectors think nothing of spending several thousand euros on a one-off model train, which may require 4,000 process steps in its manufacture.

Mr Dietz resisted the temptation to follow other model train makers by transferring production to China, where he thought quality could not be guaranteed.

But manufacturing costs had to be cut dramatically. Mr Dietz achieved this by shutting one of Märklin’s three German plants and simplifying the company’s production efforts. The number of parts made by the company’s factories has been pared back to 50,000 from 75,000 two years ago.

Costs are also being reduced in the supply chain. The number of suppliers is being cut from 700 to 400, while the proportion of components bought from China is rising from 17 per cent to 35 per cent. Mr Dietz thinks this will put Märklin in a better position for the future, while maintaining its reputation for quality.


Mike
Offline steventrain  
#2 Posted : 28 October 2007 10:00:20(UTC)
steventrain

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Thnaks for the report, Mike.
Large Marklinist 3- Rails Layout with CS2/MS2/Boosters/C-track/favorites Electric class E03/BR103, E18/E118, E94, Crocodiles/Steam BR01, BR03, BR05, BR23, BR44, BR50, Big Boy.
Offline john black  
#3 Posted : 28 October 2007 10:27:42(UTC)
john black

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Quote:
[size=1" face="Verdana" id="quote]quote:<br />Financial Times: Mr Dietz resisted the temptation transferring production to China

Aha biggrinbiggrinbiggrin

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Offline xxup  
#4 Posted : 28 October 2007 10:39:34(UTC)
xxup

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Maybe only the box is made in China???
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Offline ulf999  
#5 Posted : 28 October 2007 11:04:20(UTC)
ulf999


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biggrin
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Offline David Dewar  
#6 Posted : 28 October 2007 13:37:09(UTC)
David Dewar

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Adiran :Maybe even just the little sticker that says made in China!!!!!!!!!!

I dont mind too much if some parts come from China and are checked and assembled by Marklin if this helps costs but I would not like my complete loco made other than by Marklin. In the past we have taken German engineering to be top class but looking at other products, cars for example, other countries appear to be overtaking them.

David
Take care I like Marklin and will defend the worlds greatest model rail manufacturer.
Offline Hoffmann  
#7 Posted : 28 October 2007 16:49:44(UTC)
Hoffmann

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Joined: 25/11/2004(UTC)
Posts: 1,106
Location: Guelph, Ontario

Hi all,

It appears that already 35% of Marklin Items are made in China. This includes most new high detailed Passenger and Freight Cars, the small Koef all the Die Cast Cars, the Transformers, Control Boxes and Turnout Motors.
Most (if not all Z-Scale Engines) Z Scale Items.
The Marklin Factory in Hungary makes most Hobby Items, Track and Start-Sets which is about 55%.
This leaves about 20% of Marklin items which are still made in Germany. Of course Marklin will tell you that all the design and engineering is done in Goeppingen.

The Items you purchase today which still say Made in Germany (aside from some Locomotives) are probably old Stock or from a molt which has not been changed yet.

Martin
marklin-eh
Offline mascagni  
#8 Posted : 28 October 2007 17:59:51(UTC)
mascagni


Joined: 25/07/2002(UTC)
Posts: 826
Location: Tallahassee, FL USA
Hi: I'm sure you are aware of the fact that, at least in the US, almost all toys are now made in China. There was a time when only rather low-end toys were made there, but now essentially all toys in the US are Chinese. This seems to be due to many very large-scale forces, and what we are seeing with Märklin is those forces being exerted on a formerly isolated island in the toy world. I'm not saying I happy to see it-I am not, but I think that it is inevitable. This will most likely help Märklin remain in business, but it will invariably impact our perception of the company and its products. I will be happy to have Märklin around, but if their quality degrades, I am not sure what I will really end up doing.

BTW, this summer there were massive recalls of items manufactured in China, especially toys. A major concern was the safety of the products. With toys, this was often the discovery that lead-based paints were used. So, another issue that we really never think about with our trains is whether it is safe to let our kids handle them. I hope this never becomes an issue. Another thing to remember is that this stain on Chinese-made toys has invigorated interest in toys made in the US and Europe. This actually may a be a good thing for Märklin to try to capitalize on with what remains produced in Europe.--MM
Michael Mascagni, Tallahassee
If I weren't a Mathematician, I'd be a Violinist.--Albert Einstein
Offline Guus  
#9 Posted : 28 October 2007 18:57:25(UTC)
Guus

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Joined: 13/10/2004(UTC)
Posts: 2,616
There have been talks for a considerable time now about Märklin products being made in China.

When do you call a product being made in country "X" from a legal point of view?Is it when only one screw is made over there or when a larger component from that country is installed.Or when the product is assembled over there?
I really don't know!
From what I seem to understand of what's written in the article only parts are made in China and not the whole product.
Furthermore there's bound to be a difference of definition between states of what one calls "made in" a certain country.

Can anyone shed some light on this?

Kind regards
Guus
Kind regards,
Guus
Offline Hemmerich  
#10 Posted : 28 October 2007 22:22:36(UTC)
Hemmerich


Joined: 15/04/2003(UTC)
Posts: 2,734
Location: ,
Quote:
[size=1" face="Verdana" id="quote]quote:Originally posted by Hoffmann
It appears that already 35% of Marklin Items are made in China.


The report doesn't talk about items, which you incorrectly relate to "finished products" - it clearly says "components".

Quote:
[size=1" face="Verdana" id="quote]quote:The Items you purchase today which still say Made in Germany (aside from some Locomotives) are probably old Stock or from a molt which has not been changed yet.


New items you buy today say "Märklin, Stuttgarter Strasse 55-57, D-73033 Göppingen". Nothing else is required or important! winkwinkwink
Offline David Dewar  
#11 Posted : 29 October 2007 00:16:54(UTC)
David Dewar

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Posts: 7,464
Location: Scotland
Most businesses in trouble go for cost cutting to offset falling sales. The problem that can arise is a further reduction in sales due to a poorer product.
Reducing costs should always go along with increasing sales and hopefully M are going down this route. As I have said I dont mind if parts of my model are made outside Germany providing the finished item is put together and tested by Marklin.

David
Take care I like Marklin and will defend the worlds greatest model rail manufacturer.
Offline Hoffmann  
#12 Posted : 29 October 2007 01:41:09(UTC)
Hoffmann

Canada   
Joined: 25/11/2004(UTC)
Posts: 1,106
Location: Guelph, Ontario


Hello Lutz,

I am amazed how easy it is to make Customers think (by calling some items components)that the items purchased are still made in Germany ( or any other Country).
Here is a list of some of the components you are thinking of.

Made in CHINA Marklin # 36812,36822,36824,43311,43313,43315,46451,46558,48292 all the Die cast Cars which are as loads on the Autoplant freight cars these are all Items new for 2007 and there is many more.

While I do not object to Items made in China it bothered me that Marklin is not truthfull.

We in North America know where things are made because Customs demands that a Sticker be placed on every Box (Cars Locomotives etc) of the Country of origin.

This is not the case in Europe ( Your Salami could be made in Russia and you would never know).

Martin
marklin-eh
Offline plavnostruev  
#13 Posted : 29 October 2007 04:00:47(UTC)
plavnostruev

United States   
Joined: 18/11/2004(UTC)
Posts: 756
Location: New Jersey, USA
Quote:
[size=1" face="Verdana" id="quote]quote:Originally posted by Hoffmann
<br />
Your Salami could be made in Russia and you would never know.
Martin


Martin,
You are killing me!!!
The only made in Russia item Lutz is probably consuming is natural gas biggrin. Don't know about his alcohol intake, perhaps vodka too wink

But seriously, here is a riddle:
Minitrix set 11601 has a steamer and three cars, each packed individually. On the steamer's box it is labeled "Made in Germany". On cars it simply says "TRIX, Nurnberg". And on the box it proudly proclaims "Made in China". [:0]
What gives?

Mike
Offline kimballthurlow  
#14 Posted : 29 October 2007 13:35:13(UTC)
kimballthurlow

Australia   
Joined: 18/03/2007(UTC)
Posts: 6,765
Location: Brisbane, Australia
Hey, get used to it. Quote from Financial Times, courtesy of Mike:
Quote:
[size=1" face="Verdana" id="quote]quote:But manufacturing costs had to be cut dramatically. Mr Dietz achieved this by shutting one of MÃrklin's three German plants and simplifying the company's production efforts. The number of parts made by the company's factories has been pared back to 50,000 from 75,000 two years ago.

That all sounds sensible to me, if not brilliant!
I would like to continue to be able to buy Marklin. Mr Dietz apparently wants me to, as well. His job depends on it.

My local paper only the other day said that Germany was the BIGGEST exporting country in the world, (which is something I did not know incidentally), until YESTERDAY, when China surpassed it!!
Sydney Morning Herald - Oct 27, "China has surged ahead of Germany for the first time to become the world's top exporter .... data from the World Trade Organisation ..... up 55% from a year earlier ... boasting 8% of global exports..."

Now Marklin is only a tiny indicator of what has happened. And we have not even seen Chinese cars yet!! So long as Marklin appeals to my desire for <u>well designed, thoroughly tested</u> (my underlining) products, that run without mishap, I will be happy. May Marklin long continue as the "prince" of model trains.

regards
Kimball
HO Scale - Märklin (ep II-III and VI, C Track, digital) - 2 rail HO (Queensland Australia, UK, USA) - 3 rail OO (English Hornby Dublo) - old clockwork O gauge - Live Steam 90mm (3.1/2 inch) gauge.
Offline Hemmerich  
#15 Posted : 30 October 2007 01:16:03(UTC)
Hemmerich


Joined: 15/04/2003(UTC)
Posts: 2,734
Location: ,
Quote:
[size=1" face="Verdana" id="quote]quote:Originally posted by Hoffmann
Made in CHINA Marklin # ... all the Die cast Cars which are as loads on the Autoplant freight cars these are all Items new for 2007 and there is many more.


Well, the cars usually contain now a brand name "Schuco" at the bottom side. Märklin offers some very nice Caterpillar trucks - IMHO they are as well made in China; at least it says so on them. Why not in the U.S.? They sell like hell here - so apparently nobody cares.

Quote:
[size=1" face="Verdana" id="quote]quote: While I do not object to Items made in China it bothered me that Marklin is not truthfull. biggrin


Why? Many components for their products come from China and that's what they tell anybody interested. When looking at their large amount of products (still) only a small part of finished Märklin products is shipped from China. If somebody is also interested to learn that most of their (HO) locos - not anymore just Hobby models but now as well the more expensive stuff - are produced in Györ they also tell that - and if someone wants to see his/her gator assembled, packed and shipped from there they even offer a factory visit. But that's apparently not what (some) people like to hear. Cool

Quote:
[size=1" face="Verdana" id="quote]quote:Your Salami could be made in Russia and you would never know


Sure you would - must taste like "Gazprom"! biggrin
Offline Purellum  
#16 Posted : 30 October 2007 02:44:24(UTC)
Purellum

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Classic Chinese shoes like these are now produced cheaper in India, and then exported to China. Cool


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Offline john black  
#17 Posted : 30 October 2007 21:57:58(UTC)
john black

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Now what ... biggrinbiggrinbiggrin
I hope no one visits a poor Southener's layout in Brooklyn. Intruders beware of Gators.
AT&SF, D&RGW, T&P, SP, WP, UP, BN, NYC, ARR, epI-III - analog & digital Marklin Classics only.
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