RMweb Premium petethemole Posted October 31, 2014 RMweb Premium Share Posted October 31, 2014 Since when has this been a Bachmann thread? Link to post Share on other sites More sharing options...
Paul Cram Posted October 31, 2014 Share Posted October 31, 2014 Since when has this been a Bachmann thread? Since it appeared in the Bachmann grouping! Link to post Share on other sites More sharing options...
Ozexpatriate Posted October 31, 2014 Share Posted October 31, 2014 I have just found this news item on a reliable source in the USA, this afects the UK market as well. the manufacturers seem to have a big problem to resolve and I am sure that a little understanding from the customer will help. A link to Jason's comments would be helpful. Jason Shron is a regular contributor here and posts frequently in the Rapido Trains sub-forum. He is refreshingly direct and honest for the head of a model railway manufacturer. There are many of us here who follow his descriptions of the model railway manufacturing situation in China. His 'visit reports' (which include photos) to factories in China are very informative. Link to post Share on other sites More sharing options...
APOLLO Posted October 31, 2014 Share Posted October 31, 2014 Ah well we still have plenty of Peco stuff available !!! Brit15 Link to post Share on other sites More sharing options...
RMweb Premium petethemole Posted October 31, 2014 RMweb Premium Share Posted October 31, 2014 I was under the impression from the thread title and much of the content that it was wider-ranging than just Bachmann-related. Link to post Share on other sites More sharing options...
Ozexpatriate Posted October 31, 2014 Share Posted October 31, 2014 Bachmann are different in that their owning company has its own factories so not really appropriate on this Bachamnn thread? Jason's comments refer not to Rapido Trains, but directly to the factory closure and ensuing labour dispute at the ex-Sanda Kan, Kader Holdings factory that started this thread. Kader Holdings is the parent company of Bachmann Europe PLC. Since when has this been a Bachmann thread? It started that way, but I think it's fair to say that any Chinese manufacturing is in scope. Link to post Share on other sites More sharing options...
RMweb Gold Ryde-on-time Posted October 31, 2014 RMweb Gold Share Posted October 31, 2014 Perhaps it should be moved away from the Bachmann sub forum then if people want it to be a general discussion? Link to post Share on other sites More sharing options...
RMweb Premium Andy Hayter Posted October 31, 2014 RMweb Premium Share Posted October 31, 2014 Last year Hornby had major supply problems. This year, judging by a slow down in supply, Bachmann also have some issues. I do not think you can separate Bachmann from a general supply issue. They may have advantages, those advantages may easily turn to disadvantages. What you cannot do is separate one company from the general market conditions. Link to post Share on other sites More sharing options...
Loconuts Posted October 31, 2014 Share Posted October 31, 2014 A link to Jason's comments would be helpful. I found Jason's comments on the Caboose Hobbies Industry News Section. I felt that this comment needed to be on this site as Kander Holdings is Bachmann and their take over has been the cause of this crisis. Why, I do not know as I am not privy to board room decisions. Also I do not have an axe to grind with Bachmann or any other manufacturer. I have all the locos and stock I need, to add anymore would need an extension to the Railroad which there is no room to extend. Also the moderator ok the comments from Jason on this site. Loconuts Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted October 31, 2014 RMweb Gold Share Posted October 31, 2014 A link to Jason's comments would be helpful. I found Jason's comments on the Caboose Hobbies Industry News Section. I felt that this comment needed to be on this site as Kander Holdings is Bachmann and their take over has been the cause of this crisis. Why, I do not know as I am not privy to board room decisions. Also I do not have an axe to grind with Bachmann or any other manufacturer. I have all the locos and stock I need, to add anymore would need an extension to the Railroad which there is no room to extend. Also the moderator ok the comments from Jason on this site. Loconuts And it must have been on there a long time - it is six years since Kader took over the rump of Sanda Kan and what was left after various takeovers. In fact Sanda JKan had been bought by the private equity concern back in 2000 and was sold on by them to JP Morgan in 2004 before finally being acquired by Kader Holdings. Kader rationalised production and shed what they presumably saw as smaller accounts - some are mentioned here - http://www.modelretailer.com/en/The%20Industry/Industry%20News/2010/06/Sanda%20Kan.aspx Link to post Share on other sites More sharing options...
Loconuts Posted November 1, 2014 Share Posted November 1, 2014 To the Stationmaster:- Thank you for that link, it made very interesting reading and explained a lot. The Jason comments I don't think have been up on the Caboose Hobbies site for very long as I check out the site once a month. But I think the result of this turmoil will cause a change in what our market will look like in a couple of years time and a change with the way we purchase our models. Pre-ordering will become the norm and we can expect to pay more realistic prices. Will it become a middle class hobby again as it used to be when I was a lad? (I am getting on in years) Will modelers discover scratch building again? Loconuts Link to post Share on other sites More sharing options...
Ozexpatriate Posted November 1, 2014 Share Posted November 1, 2014 A link to Jason's comments would be helpful. I found Jason's comments on the Caboose Hobbies Industry News Section. And the original is here if people want to look at it in context. The next article on that page is from 2012. Jason might be talking about January 2014, around when I believe a factory was closed based on reporting on the April 2014 industrial dispute referenced in the OP to this thread, or perhaps not. In their 2013 annual report, During the year model railway supplies from the Group’s largest supplier in China, reduced considerably after their decision to close down the main factory supplying Hornby and transfer activity to another that didn’t have the experience of producing our products.This could well be the shut-down Jason refers to - January 2013. It's hard to be sure with an undated article. I felt that this comment needed to be on this site as Kander Holdings is Bachmann and their take over has been the cause of this crisis.The "take over" of Sanda Kan was hardly the 'cause' of this crisis. It is related, but is much more complex than that. As Mike points out this goes back to Sanda Kan being acquired by JP Morgan and saddled with debt from that acquisition* back in 2004. They essentially went bankrupt in 2008. * The way that private equity companies do with such acquisitions. At that point Kader Holdings was the 'white knight' that rescued the Sanda Kan factory and kept it open. Ironically, Hornby might well be completely out of business by now if Kader had not done that. Ultimately Kader made a decision to close it in part due to rising costs and changing local laws and taxes as is their prerogative. This story has had much greater impact to Hornby's business (since Sanda Kan was at one time their sole model railway supplier) than it has to Bachmann Branch-Line and we have been following it as closely as possible given the sparse information that trickles out. Link to post Share on other sites More sharing options...
Ozexpatriate Posted November 1, 2014 Share Posted November 1, 2014 Kader rationalised production and shed what they presumably saw as smaller accounts - some are mentioned here - http://www.modelretailer.com/en/The%20Industry/Industry%20News/2010/06/Sanda%20Kan.aspx As we both know only two well, they shed a lot of volume from some big accounts in 2013 too! By the way, Hornby published their interim report on November 13, last year. Likewise, their 2014 interim report could be available in a couple of weeks. They will undoubtedly have much to (not) say on their supply chain issues. Link to post Share on other sites More sharing options...
Ozexpatriate Posted November 1, 2014 Share Posted November 1, 2014 But I think the result of this turmoil will cause a change in what our market will look like in a couple of years time and a change with the way we purchase our models. Pre-ordering will become the norm and we can expect to pay more realistic prices.Yes, I agree. Perhaps, being interested in US models, you already know this but at one point Sanda Kan was the supplier to Atlas, Broadway Limited and all the Walthers lines including LifeLike. BLI was one of the first customers turned away after Kader Holdings consolidated the Sanda Kan customer list to try to focus the business on a return to profitability. BLI struggled to source products for some years. You can find a tribute by Atlas to Mr. Wai Shing Ting, the founder of Sanda Kan, here. Link to post Share on other sites More sharing options...
bigherb Posted November 1, 2014 Share Posted November 1, 2014 At that point Kader Holdings was the 'white knight' that rescued the Sanda Kan factory and kept it open. Ironically, Hornby might well be completely out of business by now if Kader had not done that. Ultimately Kader made a decision to close it in part due to rising costs and changing local laws and taxes as is their prerogative. Hornby did have plans to buy Sanda Kan so things might have been a lot different. Link to post Share on other sites More sharing options...
Bernard Lamb Posted November 1, 2014 Share Posted November 1, 2014 Hornby did have plans to buy Sanda Kan so things might have been a lot different. But as they did not have any money that was rather an optimistic idea. Bernard Link to post Share on other sites More sharing options...
bigherb Posted November 1, 2014 Share Posted November 1, 2014 But as they did not have any money that was rather an optimistic idea. Bernard Perfectly feasible, at the time Hornby had considerably reduced its borrowings from buying other companies, I expect they would not have had a problem raising the capital. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted November 1, 2014 RMweb Gold Share Posted November 1, 2014 Perfectly feasible, at the time Hornby had considerably reduced its borrowings from buying other companies, I expect they would not have had a problem raising the capital. Kader paid US $8.5 million for Sanda Kan at the end of 2008, i.e at the time the 'financial crisis' was getting underway. To be honest in the financial climate of that time I seriously doubt if Hornby could have raised the money to buy a loss making manufacturing concern in China. The price paid by Kader was equal to HK$66.30 million - in a year when Kader Holdings made a profit of HK$ 228 million, i.e unlike Hornby Group they had plenty of cash to spare. Link to post Share on other sites More sharing options...
woodenhead Posted November 1, 2014 Share Posted November 1, 2014 And why would Hornby have wanted to saddle itself with another loss making manufacturing base when that was the whole reason for outsouricing production to China. Link to post Share on other sites More sharing options...
bigherb Posted November 1, 2014 Share Posted November 1, 2014 And why would Hornby have wanted to saddle itself with another loss making manufacturing base when that was the whole reason for outsouricing production to China. I don't think Sanda Kan where loss making on their activities with full order books just that they where as so often happens saddled with a debt by the investment company, free of the debt they may well be have been in a profitable position. Link to post Share on other sites More sharing options...
Ozexpatriate Posted November 1, 2014 Share Posted November 1, 2014 Hornby did have plans to buy Sanda Kan so things might have been a lot different. It is certainly true that Hornby did due diligence in looking at acquiring Sanda Kan. You can find the cost write offs in the 2009 annual report - (£221,000) As Mike points out above, 2008 was a very difficult time to borrow money. Had Hornby decided to and been able to borrow the money, they would have had that debt on top of the debt they currently hold - reported as £7.3 million on March 31, 2014. With their recent turnover, this would be precarious for Hornby indeed. I don't think Sanda Kan where loss making on their activities with full order books just that they where as so often happens saddled with a debt by the investment company, free of the debt they may well be have been in a profitable position. It's not a big stretch to imagine that the 2008 financial crisis might have had a lot to do with Sanda Kan's insolvency. Perhaps a bank somewhere was calling on loans? It's hard to know how profitable they were without seeing their books though I am pretty confident that, as you say, the acquisition debt was a major factor. They certainly did have lots of customers at the time and produced excellent products. Link to post Share on other sites More sharing options...
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