MTH Lawsuit

[mushroom2]

With the decision on whether Lionel can appeal the MTH lawsuit due next week, I was curious what anyone thought about how that lawsuit will affect the model railroad industry.

 

[mushroom2]

Just a little background. MTH just won a 42 million dollar lawsuit against Lionel and Korea Brass. Seems that some people at Korea Brass stole some plans from MTH and Lionel produced the model. The people responsible at Korea Brass are currently serving time.
Now the real problem is that Korea Brass does all of Broadway Limited's stuff as well as many others and with the lawsuit, there is a very real chance that Korea Brass may go down. No one seems to know where to go to have any other manufacturing done. This is for both brass and die cast. So any thoughts?

 

[Keith 55]

I find it funny that there MIGHT be those kinds of $ numbers floating around.
Beyond that, as an N Scaler, I don't give a poop if a bunch of lawyers get new houses at the expense of the O crowd.
"A Titanium Driver, Oh Yeah."

 

[mushroom2]

No might about it, that is the figure. It surprised Mike as well, he only sued for 39 million but was awarded 42. And as an N scaler, well that's the point. Korea brass makes EVERYTHING for Broadway Limited. They make a lot for Atlas, Life Like and many other manufacturers. This lawsuit will affect ALL scales. Yeah, the major impact will be on Lionel, but the shakeup might be way beyond all expectations.

 

[Keith 55]

Hmmm. "They make a lot for Atlas, Life Like and many other manufacturers. This lawsuit will affect ALL scales."
Okay, maybe I was a bit hasty.

 

[mushroom2]

I get the feeling it's going to be ugly. I just hope I'm wrong. The word I get though, and Keith this doesn't affect you, if you plan on buying anything from Broadway Limited, if you can't walk out the door with it, don't buy it. That doesn't sound good to me, but behind the scenes there may be a lot of scrambling going on to keep production going if Korea Brass goes under. So who knows. Time will tell.

 

[modelbob]

Now the real problem is that Korea Brass does all of Broadway Limited's stuff as well as many others and with the lawsuit, there is a very real chance that Korea Brass may go down. No one seems to know where to go to have any other manufacturing done. This is for both brass and die cast. So any thoughts?

Don't worry, it's quite likely somebody will fill the void if they do go out of business. They supply a lot of stuff, and make a lot of money doing it. If they are forced to close, somebody will see the void and fill it. They may even end up purchasing Broadway's equipment at bankruptcy prices.

Hopefully nothing will happen to them, but if it does I wouldn't be surprised to see some enterprising company in Asia pick up the slack. It's too big of a market to ignore.

Sadly, the kind of thing that happened is more common than you'd like to think. I've had companies from around the world say "Just send me a sample, we can make that". I've also seen an instance where a company paid us thousands of dollars to replace defective materials that were knock-offs of the rail thing and ended up breaking before the track was even in service. They would suddenly crack, even with no trains running, due to poor material.