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DCNR #5 - Daily Convention News Report

On Friday of Convention week, LCCA conventioneers enjoyed two local area tours, participated in the club's annual meeting, and packed the room for the Lionel Seminar "starring" Jerry Calabrese, Lionel's President and CEO. For members who like postwar Lionel products because of cool remakes and novelty items, this seminar was a love feast. Today's news report of that session is by Neil Blumberg (RM 16420).

Jerry Calabrese gave a long talk at the Friday afternoon Lionel Seminar. Clearly the catalog is going to shrink in size, and they will cover the waterfront in product niches with fewer SKUs. The company has recognized that the market will not support the current situation, dealers cannot stock even a fraction of their current product line, and most Lionel customers are less obsessed with specific railroads or locomotives than typical model railroaders.

The company plans to invest resources and effort at developing LEGACY as a simple but powerful layout control system that will work for layouts of all sizes and complexities.

The high-end first subway train with Legacy is nearing completion of design, although it has been fraught with difficulty. The company is trying to avoid any teething problems like with the Acela.

They will continue to make models that appeal to hobby beginners (as starter sets), to postwar and prewar fans, high-tech fans, and hi-railers focused on true-to-scale models.

The variety of products will be decreased for each catalog, which will mean that some folks will find only a few or perhaps no pieces of interest to them in any given catalog.

Other Lionel notes:

One of the big issues being addressed by Mike Reagan (new Chief of Customer Service) and others at Lionel is proper documentation for both operation and repair of Lionel products. I saw volume one in draft form. This should be of great assistance to repair stations and to consumers who wish to do their own repair work.

The company is indeed investigating distribution center possibilities on the East Coast, and Jerry mentioned that they are exploring in very preliminary fashion what the issues would be for assembling or even manufacturing some products domestically, given the two-fold increase in shipping costs and a four-fold-plus increase in wages in Asia. Nothing is imminent, but if things continue as they are, something might emerge eventually.

It sounds as if Legacy's initial bugs, mostly very minor, have been fixed in version 1.2.

Calabrese also noted that with the bankruptcy and lawsuit now concluded, the company can devote money and effort to developing new products in a way they could not do during the last eight years. He also mentioned a total figure of the cost of the lawsuit to Lionel (including legal fees) at 14 million. Nobody was very interested in discussing the lawsuit; clearly Lionel has put this behind them.

Conventional Classics represent Lionel's commitment to reinforce their iconic and traditional conventional models, but improved in performance with traction tires, Magnetraction, electronic E-unit, horn, bell, and whistle. These items will have near-perfect physical resemblance to the products of the 1940s and 50s. The company understands that conventional operators still are a large, and perhaps predominant, part of their business. They also understand the need to provide exceptional value through much higher margins to dealers and affordable prices to loyal fans.

Everyone agreed the company would get a landslide of orders for these models at these prices. Almost to a man, folks were ordering at least one set, often two; plus some of the separate sale cars and locomotives. I think these may well be the best-selling products by Lionel in many decades, with the exception of the Polar Express.

In LCCA product news ...
  1. The LCCA New Haven #209 train will be shipped from the LCCA Business Office in Illinois late next week.
  2. A Burlington ALCo A-unit postwar set is next in line, along with some special LCCA buildings. Future trains will have TMCC, and a straw vote by showing of hands affirmed this idea.