DJM - Statement of Affairs released

[Markwj]

2 hours ago, d9002 said:

"Final though on this for now. Whatever the true situation with the Clayton, it might be asked what would have happened to confidence in DJM if the money hadn't been repaid when it was? Would people have started jumping ship then as regards other projects and could the refund therefore have been seen as a necessity whatever "pot" it came from to protect the business?"

 

Roy LS ....exactly so.

Having received ,y refund, like you, I assumed it was my own money coming back and not obtained by delving into another "kitty".

I must admit though that particular episode dissuaded me from any further "investment" in DJM, preferring to wait until there was something more substantial than vague promises and "maybes"

I wouldn't worry if it was your own money coming back or not. If it isn't then it has been misrepresented like most other communication which has come from this manufacturer. I would love to know the view from china but I suspect we will never find out.

[TheSignalEngineer]

Suppose I could count myself lucky. Never got involved with DJM except for the Beattie via Kernow which although an exquisite little thing can hardly pull itself let alone any stock. The only other thing I considered was the 14xx but was put off by reported problems and missing the one I wanted. The rest of his announcements didn't really interest me and I don't like parting with any money without a confirmed delivery date.

 

In the longer term he is saving me quite a bit of money as I gave up pre-ordering until I have seen a decorated sample and it is on the boat. That gives me time to consider if it's something I really must buy or "Oh, that's nice, I'll have two" then put it in the cupboard only to find three years later and wonder why I bought it.

[Ravenser]

3 hours ago, phil gollin said:

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Ahhhhh . . .  but the ethical/philosophical question is would it be right to buy such a model (should it ever appear) if (and we don't really know) it was the Chinese manufacturer who helped DJM go under ??????

 

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The ethical / philosophical and legal questions would appear to be:

 

- Now that DJM has gone, would it be ethical or legally viable for anyone else to deal with the parties who may control this tooling , to bring the model to market in the UK? Bearing in mind that the DJM registered design would be relevant - this presumably is the DJM design

- Is the model good enough for anyone to bother taking on the risk and complications of trying to release it here? If they were to purchase the IP from the liquidators for a small sum there would be no legal obstacle. (Unless Dave Jones managed to buy the relevant rights back off the liquidators simply to stop anyone else releasing his model....)

- The ethical/philosophical question is really whether it would be right to refuse to do a deal for the model when DJM are not around, and boycott the product when we have no firm evidence that the Chinese manufacturer did anything  wrong....

 

Given the mess that DJM's business affairs seem to have fallen into, and the demonstrable acrimonious collapse of his partnerships with 3-4 parties in the UK, with DJM taking reprisal action through IP registrations and the Announcement, coupled with the brief agitated appearance of a Chinese factory manager here - it seems quite possible that DJM's problems with the factory may not have been the factory's fault 

 

So how far are people in the hobby morally justified in black-balling this model when we don't know what has happened? That's a very finely balanced ethical problem . Is there a Professor of Moral Philosophy in the house?

 

The only precedent would seem to be the Replica/Kadar dispute in the early 90s - I don't really recall people operating moral boycotts against Bachmann RTR

 

(I doubt if this will become a real question for at least 12 months - but once the dust has settled, I suspect those who control the tooling may attempt to find another potential UK distributer)

 

As an aside it seems possible to me that there might have been unsettled bills from say the Class 71 project which sparked the dispute, rather than the dispute being about the payments on the Class 17.

 

If costs on the 71 had escalated beyond the budget, is it possible DJM might have distributed the models to crowd-funders, leaving some balance still outstanding in China? At which point a factory might well have retaliated by freezing the tooling it held. I suggest this only because we are now seeing distinct signs that DJM may have been robbing Peter to pay Paul. If it wasn't the Class 17 per se that was the flashpoint for the commercial dispute  , Dave Jones' comments become a little easier to understand

 

His crowdfunding model doesn't seem to have any protection against an significant escalation of costs in China - and we all know there has been one. He would also be completely exposed to the consequences of any fall in the pound when he sold at a fixed price in sterling and contracted at a USD price in China. In June-July 2016 sterling fell from $1.50 to the pound to around $1.25....

 

 

[The Stationmaster]

One fairly important point about the factory which DJM got into some sort of dispute with - it has carried on working on models for other UK concerns and I know of one which has very definitely come to market and got good reviews while it also finished for customers working directly with them projects which were originally via DJM.

 

That suggests to me that the factory is not run by 'fiendish devils out to destroy poor innocent British railway model commissioners' otherwise we would have no doubt heard of others having problems similar to DJM with that factory - and we haven't.  We know that Kernow's tooling for all their models via, or originally via, DJM are not involved in any kind of dispute.  I have heard that the same applies to the Hattons 14XX tooling which also came from that factory.  So far as we know in the public domain the only UK concern 'in dispute' with that factory was DJM and the only person who has complained openly about their business dealings was - DJ.

 

To me that says an awful lot.  And it leaves me asking why DJM and not anybody else if the factory is as he implied?

[GWR-fan]

The Chinese factories are in the market to make money.  If tooling, etc., was fully paid for then why would a business refuse access to tooling paid for or refuse to deal with a commissioner of such tooling?   From a business perspective it simply does not make sense.  Reading between the lines it seems that the factory has carried out work not fully compensated for and had requested payment to settle accounts before proceeding further.  Perhaps they too spotted the red flags and had become wary of further dealings on credit.  Possibly,  the same factory may have been involved in other pending projects and could see that finances were not forthcoming.  Jason,  of Rapido fame,  shows how a company deals with its Chinese contractors.  He not only speaks the language but is fully involved in seeing projects through to completion with regular factory visits,  establishing friendly working relationships with the staff in the process.   When a commissioner bad mouths a contracting company then we know that any chance of seeing a project completed is zero.

 

Several years ago a major American manufacturer of model trains found itself unable to pay for several containers full of stock left stranded on the docks in China.  Over a period of time a relative of the owner of the company who had since retired, was able to raise some finance to secure some of the stock.  The range of product was later released through a well known Chinese brandname. 

 

I cannot see any stigma attached to releasing an ex-DJM product to the market.  No doubt the Chinese manufacturer carried out the work in good faith so why should they be criticised simply because another has tarnished their name.      There may be some legal issues due the announcement of an announcement fiasco but no doubt these could be resolved.  

 

A question that I find irritating is if possibly the current company business model was more to finance the lifestyle of the owner rather than a serious attempt to bring product to market.  No doubt the owner intended at some point in the future to release product to market once it was firmly established.  We will never know.  

[RedgateModels]

6 hours ago, GWR-fan said:

The Chinese factories are in the market to make money.  If tooling, etc., was fully paid for then why would a business refuse access to tooling paid for or refuse to deal with a commissioner of such tooling?   From a business perspective it simply does not make sense.  Reading between the lines it seems that the factory has carried out work not fully compensated for and had requested payment to settle accounts before proceeding further. 

 

or, assuming that the ep1 tooling was paid for by the up front money supplied by DJ's customers and the sticking point was costs to change the tooling due to cab roof and nose end issues. Did DJ assume that these changes were included in the costs and the factory said not, we need more money. Maybe at this point teddies were thrown and the 17 was put on hold.

[GWR-fan]

11 minutes ago, RedgateModels said:

 

or, assuming that the ep1 tooling was paid for by the up front money supplied by DJ's customers and the sticking point was costs to change the tooling due to cab roof and nose end issues. Did DJ assume that these changes were included in the costs and the factory said not, we need more money. Maybe at this point teddies were thrown and the 17 was put on hold.

 

 

This is a quote from an email posted by Melmoth back on page 29 - 

 

Quote:  ".....

The class 17 has been underwritten by DJM to get to the 1st EP stage, but i am at a loss to guarantee delivery within this year for the model unless it is financed externally (or crowdfunded if you wish).

So i am asking each and everyone of you who has expressed an interest whether you would be willing to pay for you model up front so that we can go into 2nd EP tooling, painted and decorated samples and finally product to fulfil your order.........." (end quote)

 

Dave was aware that additional costs were involved in the changes for the 2nd EP tooling.    Did this come as a surprise to him or did he assume that all tooling costs had been paid?  He subsequentally requested upfront payments in full to allow production to proceed.  If it was 2nd EP tooling costs that caused the rift with the company then why would he request voluntary upfront payments in full?   Perhaps insufficient funds were incoming to guarantee production necessitating a refund.

[RedgateModels]

Yes good point, although as you say if the customers paid for ep2 then why did the sample shown to Revolution still have errors?

 

I guess we will never know the real reason for the dispute. I was just idly speculating last night

[DavidH]

1 minute ago, RedgateModels said:

Yes good point, although as you say if the customers paid for ep2 then why did the sample shown to Revolution still have errors?

 

Because it was never done - the money raised wasn't enough to pay for the requested changes, so it was simply refunded and the work never carried out?

[RedgateModels]

39 minutes ago, DavidH said:

 

Because it was never done - the money raised wasn't enough to pay for the requested changes, so it was simply refunded and the work never carried out?

 

Very plausible

[John M Upton]

I remember the "crowd funding" request for EP2. I tentatively considered it but deep in a dark corner of my mind a little alarm bell was starting to ring so I stuck with my preorder through a retailer.

 

It really is all a bit of a dog's dinner isn't it?

[Roy L S]

2 hours ago, John M Upton said:

 

 

It really is all a bit of a dog's dinner isn't it?

 

The whole DJM affair summed up in elegant simplicity in a single sentence.....

[Wolf27]

Remember when Dave said he was only working at something like 30% of his capacity? Imagine the mess that this would have been if he gave it 100%!

[rab]

7 hours ago, John M Upton said:

 

It really is all a bit of a dog's dinner isn't it?

Well plenty of people seem to have bones to pick with Dave.

[d9002]

1 hour ago, Wolf27 said:

Remember when Dave said he was only working at something like 30% of his capacity? Imagine the mess that this would have been if he gave it 100%! 

 

Perhaps if he HAD given it 100% (as most businesses need at start-up) instead of 30%  then we wouldn't be in this mess now  ?

 

[Willie Whizz]

On 11/07/2019 at 21:38, Ravenser said:

 

...

 

His crowdfunding model doesn't seem to have any protection against an significant escalation of costs in China - and we all know there has been one. He would also be completely exposed to the consequences of any fall in the pound when he sold at a fixed price in sterling and contracted at a USD price in China. In June-July 2016 sterling fell from $1.50 to the pound to around $1.25....

 

 

Not necessarily. Having spent time with one of the (comparatively) big boys he MAY have been aware of the “Forward Exchange Market” in foreign currencies whereby he could have fixed his exchange rate liabilities - at least for a specified timescale. Not an especially cheap thing to do - but then, insurance always seems expensive until you need it to pay out, at which point it suddenly becomes the best money you ever spent ...

[Oldddudders]

Someone mentioned ethics among purchasers. Would I buy an ex-DJM model now owned by A.N.Other.Co? Of course I would if it fitted my needs. This is a market place. "You" make 'em, I buy 'em. Deal. 

[Clearwater]

20 hours ago, Willie Whizz said:

Not necessarily. Having spent time with one of the (comparatively) big boys he MAY have been aware of the “Forward Exchange Market” in foreign currencies whereby he could have fixed his exchange rate liabilities - at least for a specified timescale. Not an especially cheap thing to do - but then, insurance always seems expensive until you need it to pay out, at which point it suddenly becomes the best money you ever spent ...

 

 

Sure but whilst you might hedge once you know your payment schedule, it strikes me that DJ did not have a handle on when he would be paying the cash to even contemplate buying a forward contract.  As an aside, I doubt any bank would have taken DJ credit risk on that type of instrument.

 

where I suspect the issue was for Dave, is that an optimistic 2014/ 2015 written business plan assumed rates stayed stable and he was unable to either reprice or absorb the impact of that rise in his cost base.

[BoD]

1 hour ago, Clearwater said:

.......an optimistic 2014/ 2015 written business plan assumed rates stayed stable and he was unable to either reprice or absorb the impact of that rise in his cost base.

 

 

That’s right. Blame Brexit. 

 

I don’t think I’ve ever, even on RMweb, seen a thread with more Perhaps, Possibly, I guess,  May be,  It strikes, me, I suspect,  He may have, etc etc than this one.

 

Andy, can you build in a notify option that only kicks in when new and substantive information is posted.

[Phil Parker]

3 minutes ago, BoD said:

 

 

That’s right. Blame Brexit. 

 

I don’t think I’ve ever, even on RMweb, seen a thread with more Perhaps, Possibly, I guess,  May be,  It strikes, me, I suspect,  He may have, etc etc than this one.

 

Andy, can you build in a notify option that only kicks in when new and substantive information is posted. 

 

1: The exchange rates DID change after the referendum. I recall DJ saying this had eaten his profit on the 71. You can take that as you will, but the record does show a pound drop against the dollar, and Chinese factories price in dollars. 

 

2: If you don't like the thread, don't read it. We are moderating it to keep the thing on topic, but can't watch 24/7.

[Markwj]

1 hour ago, Oldddudders said:

Someone mentioned ethics among purchasers. Would I buy an ex-DJM model now owned by A.N.Other.Co? Of course I would if it fitted my needs. This is a market place. "You" make 'em, I buy 'em. Deal. 

I think you may struggle for Spares though which may be in the back of people's minds when buying. 

 

My own own feeling is that I would never buy a djm branded model or one he is involved with in the future out of principle but of course this does not mean my stance is right and yours is wrong just different.

[BoD]

11 minutes ago, Phil Parker said:

 

1: The exchange rates DID change after the referendum. I recall DJ saying this had eaten his profit on the 71. You can take that as you will, but the record does show a pound drop against the dollar, and Chinese factories price in dollars. 

 

Sorry. The emoti-thingy came out wrong it should have been a jester/jokey one.

 

11 minutes ago, Phil Parker said:

 

2: If you don't like the thread, don't read it. We are moderating it to keep the thing on topic, but can't watch 24/7.

 

I didn’t say I didn’t like it. I’m just amazed at how many suppositions and guesses are being made.  

And I do appreciate the efforts of the moderating team in keeping RMweb running*

 

*You can put my cheque in the post later.

[polybear]

1 hour ago, Markwj said:

I think you may struggle for Spares though which may be in the back of people's minds when buying. 

 

 

 

But isn't that the case with Hornby, Bachmann etc already?  Try buying many spares for a loco and you'll do well to get them, especially if the loco is more than a couple of years old or more.  Sadly the spares situation we enjoyed in the days of Triang Hornby are long gone

[Markwj]

14 minutes ago, polybear said:

 

But isn't that the case with Hornby, Bachmann etc already?  Try buying many spares for a loco and you'll do well to get them, especially if the loco is more than a couple of years old or more.  Sadly the spares situation we enjoyed in the days of Triang Hornby are long gone

I have had some success getting the Spares I needed for my Bachmann 47's and there is always a chance if the model is still in production but your point is still valid.

[Amand]

1 hour ago, Markwj said:

I think you may struggle for Spares though which may be in the back of people's minds when buying. 

 

My own own feeling is that I would never buy a djm branded model or one he is involved with in the future out of principle but of course this does not mean my stance is right and yours is wrong just different.

 

As long as the tooling legally changed hands, and the importer was selling items that they were entitled to sell, then I'd have no issue buying an ex DJM product, though with a bit more development work. Given that in the grand scheme of things models of locos aren't a necessity theres's been many changes of branding / ownership over the years. I've had a 14xx by Airfix, then after Airfix GMR ceased to be they were Palitoy Mainline branded (though maybe there was such a large surplus of locos that none were manufactured during the Mainline era.) Then models appeared in Dapol boxes with Dapol on the underside of the chassis, and a chassis update. Tooling then sold to Hornby with further chassis updates including the unfortunate issue with the traction tyre wheel not properly touching the track.

 

If a ex DJM product was relaunched then maybe there could be modifications to the chassis? I'd like a J94 but with a chassis with a skew wound motor, and jointed coupling rods that were the only mechanism for rotating the wheels. 

 

Spares ought to be a matter of asking the factory to produce say enough parts to assemble 4000 items, but only assemble 3000, sending spare parts over with the first consignment. Probably costly to catalogue, store and despatch parts, but it builds up goodwill if you know that you can keep a loco running for a good few years. Parts availability wasn't unique to DJM though, a friend has a Duke of Gloucester and a Q6 that need new motors, nothing available.