|What A Difference A Day Makes - a message from Jerry Calabrese
Boy, what a difference a day makes. Sorry to say, but in the eyes of some train fans, Lionel just set the world record for going from White Knight to mustache twirling villain. Yes, it’s true that on Thursday afternoon we asked Sun Models to stop selling certain K-Line engines that were covered by a permanent injunction, issued by a Federal court, to which K-Line, itself, consented.
After a lot of soul searching, we’re going to allow Sun to resume shipping orders and selling their inventory of K-Line engines, even though we have no legal or moral obligation to do so. The disruption to Sun, as well as some of our own dealers and fans who have bought those engines, would not be worth us making our point any more forcefully than we already have. But before we do, I want to clear the air on a couple of things.
Lionel didn’t start this fire; we’re just trying to put it out. No one told K-Line to use our technology, and no one told Sun to jump the gun and sell those engines when they specifically told us they would not do so without our permission. And while we feel compelled to voluntarily take care of K-Line club members who pre-paid for products, in good faith, we see a clear distinction between them and train fans trying to take advantage of a blowout. In the future, it might be wise to consider that bargains that look too good to be true often are.
Lionel intends to make K-Line products as part of a larger plan to expand our own middle line offerings that we believe have a greater role in our catalog and overall business – offerings intended to give more people a chance to own quality Lionel products at many levels. This includes engines and rolling stock that are more manageable in size and price, but yet strong on value. Having said that, selling highly detailed, die cast, steam engines that contain state of the art electronics for not much more, or in some cases, less than they cost to make, is a devil’s bargain and not a good deal for anyone.
Manufacturers and dealers who do that kind of business do not survive in the long term. In their wake they leave broken companies, broken hobbies and broken promises. Who takes responsibility for unshipped orders and pre-paid deposits? Who provides service and repairs trains that don’t work? Who invests in new tooling for next year’s products and keeps the hobby fresh and alive? Worst of all, this kind of irresponsible opportunism poisons the market for merchants and manufacturers who are committed and deeply invested in the next 20 years of the model train business, not the next 20 minutes.
For those of you who are concerned that the loss of an independent and competitive K-Line will lead to higher prices and fewer options, I can only promise that Lionel takes very seriously its commitment to making a broad range of great products and selling them at fair and affordable prices. We also take very seriously our responsibility to help create a stable hobby in which no one needs to be afraid that the product they buy today will be selling for half the price tomorrow.