Atlas acquires Microtrains

[MK]

And of course their extensive line of small parts and  willingness of the staff to sell small items not in their normal list of stocked items was also commendable. Things that smaller companies excel at.

One time I had a broken part on a freight car that I bought used at a train show.  I e-mailed them asking if I can buy that spare part as a used freight car I bought at a train show had a broken one.  Response was immediate.  They asked for my address and sent me a few.  Gratis!  I wanted to pay them and they would not accept!

[C855B]

... just look around you at all the takeovers and big mergers of non-model companies  which have been happening since the '80s, and it is not a very positive picture. ...

Not at all a parallel, Pete. That was corporate America issuing stocks and bonds, and "maximizing shareholder value" with "leverage". I was in the biz of facilitating SEC filing documents for this nonsense from 1976 to 1990. Not proud of feeding the monster, but being a minor cog in the machine amounted to a good living.

I won't pretend to know the circumstances behind this particular buy-out, but that both companies are privately held seems to indicate somebody wanted or needed to cash out while the cashing out was good. That Atlas is evidently seeking to retain key MTL individuals is a positive, although the indication they are off-shoring production leaves me with doubts, that the transition will be longer than anticipated, and fraught.

[Ed Kapuscinski]

Good news indeed! I hope Atlas follows through; their history speaks differently.

This is a common perception I really don't understand it. Can someone explain or elaborate?

[Sokramiketes]

So looking at NSE Georges’s comment above, if Atlas is entertaining keeping select MTL employees employed, why not just keep the whole operation going at it’s present location? It’s turn key. Just keep it going.

How do you know it's turn key?  These long time family owned company situations get more and more funky over generations.  We can't assume everything was an "Atlas side problem" when some of this is an "Edwards Family problem". 

There's a lot of mind-reading going on in this thread.   

[Ike the BN Freak]

This is a common perception I really don't understand it. Can someone explain or elaborate?

I have a feeling it has to do with BLMA, as their line of detail parts just hasn't come back. But the note George added, does add a lot of back story to it, wish Atlas had been more public about that years ago.

[jdcolombo]

FWIW.

Atlas has every reason to continue and enhance the MTL product line.  The products are enormously successful and have a large mainstream N scale modeler following.  At the end of the day, I go with good 'ol capitalistic greed to make things work.  If I thought Atlas' management was incompetent, then I'd be worried.  But they aren't.  They are solid and interested in making money, and therefore have every incentive to keep the MTL train on the tracks, maybe with an overhauled prime mover and better speeds.  There will certainly be a transition period, but it will be nothing like what we're going to see with the UP/NS merger.  THAT's going to take years to work out.  I doubt Atlas will need more than a few months to get everything humming.

John C.

[crrcoal]

How do you know it's turn key?  These long time family owned company situations get more and more funky over generations.  We can't assume everything was an "Atlas side problem" when some of this is an "Edwards Family problem". 

There's a lot of mind-reading going on in this thread.   

I see your point Mike. I’m basing my view off of their monthly releases. Its constant so it seems they have all their infrastructure in place: facility, tooling, molds, dies, employees. So it “appears” turn key. So if it’s possible then why not instead of shipping stuff overseas? You’d have Atlas East and Atlas West.

[Ed Kapuscinski]

I see your point Mike. I’m basing my view off of their monthly releases. Its constant so it seems they have all their infrastructure in place: facility, tooling, molds, dies, employees. So it “appears” turn key. So if it’s possible then why not instead of shipping stuff overseas? You’d have Atlas East and Atlas West.

I'm guessing there's a reason this is happening. My bet is that it's very much not as turn-key as it'd seem.

There could be all number of reasons why this went down now and how it did. Maybe MTL's building needed a surprise $500k repair? Maybe a critical piece of machinery died and is uneconomical to replace. Maybe @JoeD decided to retire and they knew they wouldn't be able to carry on without his charm?

[Dave V]

FWIW.

Atlas has every reason to continue and enhance the MTL product line.  The products are enormously successful and have a large mainstream N scale modeler following.  At the end of the day, I go with good 'ol capitalistic greed to make things work.  If I thought Atlas' management was incompetent, then I'd be worried.  But they aren't.  They are solid and interested in making money, and therefore have every incentive to keep the MTL train on the tracks, maybe with an overhauled prime mover and better speeds.  There will certainly be a transition period, but it will be nothing like what we're going to see with the UP/NS merger.  THAT's going to take years to work out.  I doubt Atlas will need more than a few months to get everything humming.

John C.

My only concern with that sentiment is that Atlas is not a primarily N scale company. Like many large companies (looking at you, Walthers), N scale is a side hustle for them with HO and O being where most of their market lies. Multi-scale manufacturers love to tell us how N scale is small potatoes compared to HO.

How does what MTL does "scale up" to how Atlas does business?

How does a completely different way of doing business (local manufacturing, near-realtime announcement to delivery in monthly releases) fit into Atlas' business model?

Therein is the source of our collective angst.

[samusi01]

Also, I assume this development will impact Lowell Smith rather heavily. I can't see Atlas maintaining a niche market like his.

They seem to have done something with him in the past; I have a pair of their foobie C636 in SP&S from him. There may be other examples, or perhaps the painting was done out of house. I'm not sure. I don't see why they wouldn't work with him as Broadway Limited works with him.

[crrcoal]

I'm guessing there's a reason this is happening. My bet is that it's very much not as turn-key as it'd seem.

There could be all number of reasons why this went down now and how it did. Maybe MTL's building needed a surprise $500k repair? Maybe a critical piece of machinery died and is uneconomical to replace. Maybe @JoeD decided to retire and they knew they wouldn't be able to carry on without his charm?

The Joe D scenario is the most plausible explanation

[Ed Kapuscinski]

My only concern with that sentiment is that Atlas is not a primarily N scale company. Like many large companies (looking at you, Walthers), N scale is a side hustle for them with HO and O being where most of their market lies. Multi-scale manufacturers love to tell us how N scale is small potatoes compared to HO.

How does what MTL does "scale up" to how Atlas does business?

How does a completely different way of doing business (local manufacturing, near-realtime announcement to delivery in monthly releases) fit into Atlas' business model?

Therein is the source of our collective angst.

I don't know. Atlas seems to be pretty active in N: updating old (and inherited) models (this year: RS-3, GP60, Phase 2 GP38-2), dropping new diesels (SD45 13 months ago and U33B this week). I might seem like an Atlas fanboi, but it's because they've supplied the majority of my equipment over the years.

Micro-Trains becoming a fallen flag truly sucks. They were a HUGE factor in N scale: both historically and currently, but things change and this could've gone far worse.

I'm guess I'm really just getting tired of everyone constantly shitting on every model railroad manufacturer for every single move they make.

It guess it goes along with my hatred of the first order thoughts that always start with "they should just...".

[Usili]

I'm guessing there's a reason this is happening. My bet is that it's very much not as turn-key as it'd seem.

There could be all number of reasons why this went down now and how it did. Maybe MTL's building needed a surprise $500k repair? Maybe a critical piece of machinery died and is uneconomical to replace. Maybe @JoeD decided to retire and they knew they wouldn't be able to carry on without his charm?

One thought could be that they had enough coming in to maintain existing stuff, but not necessarily in terms of major capital expenses that are needed combined with other factors.

[martin station]

 I really hate to see this as Micro-trains was one of my favorite companies to purchase their products. But when I look at Atlas, the competition is getting tough. Look at what's being offered today. With the demand for detail and the bells, whistles and cost that goes with it, you need to constantly up your game to capture market share. I stated this on another fourm, I see this all the time in farming, with the cost of equipment, maintenance, fuel, chemicals, ect... and with an uncertain market, it's either go large or go out. It's difficult to see farms that had been in families for generations selling out, but you just have to "roll with the changes"
Ralph

[signalmaintainer]

My only concern with that sentiment is that Atlas is not a primarily N scale company.
Therein is the source of our collective angst.

And yet Atlas has been one of two primary movers and shakers in N scale since the late 1960s. I can't fault the continuous improvement in their core N scale product line, e.i, the new loco chassis with speaker and E24 pin lightboard are great.

It's the outfall of their two previous acquisitions that's come under criticism and, as you say, Dave, is stoking our angst. For me, it's because MT nee Kadee is the other of the two primary movers and shakers in N scale. Atlas simply can't go half-a$$ on us and put most of MT's product line out to pasture. They've got to get this right.