Lionel Quality Electric Trains
Lionel Plant Closing
02/01/2001

Richard Maddox, president and chief operating officer of Lionel LLC, made the following announcement today:

After several discussions with its union and its employees, on suggestions to substantially reduce costs in order to avoid terminating the manufacturing operations at its Chesterfield, Michigan facility, no viable options were identified. As a result , Lionel management made a recommendation to, and The Board of Directors of Lionel LLC has approved, a decision to terminate the Chesterfield, Michigan manufacturing operations. Mr. Maddox indicated that the termination of manufacturing operations would not be immediate, but would be complete by the end of August and the Lionel distribution center (shipping and receiving) and corporate headquarters will remain in Chesterfield. To maintain its leadership position in the industry, Lionel will continue the following functions in Chesterfield, Michigan: consumer services, quality control, research and development, design, sales and marketing, engineering and all current administrative functions. The Lionel Visitors Center will continue to remain open to the public.

Mr. Maddox pointed out that the decision was based on increased costs of domestic manufacturing, increased competition and continued changes in the marketplace, and was not a reflection of the fine men and women of the Chesterfield manufacturing operation.

Maddox said, "The termination of manufacturing operations in Chesterfield will affect approximately three hundred and twenty five employees over the course of the next three to eight months. However, it is important to note that we will be keeping our distribution center and our corporate headquarters in Chesterfield. Both of these operations will provide employment opportunities for at least some of the employees displaced from our manufacturing operations. The employees of our distribution center, who until now have been a part of our manufacturing operations, will continue to be represented by the UAW."

According to Mr. Maddox, "The Company has hired Modern Human Resource Systems, a Company with a national reputation for helping employees displaced as a result of downsizings and closings. The Company will assist displaced employees to find new work and will make a variety of career transition services available to all associates through a series of specialized workshops, small group meetings and individual counseling sessions. Modern Human Resource Systems will also be enlisting the help and support of various federal, state and local agencies to insure that employees receive all of the assistance needed to find employment."

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