Neil Young and Trains

Classic Toy Trains

Jan. 1996

Neil Young News

Subject: RUST: Classic Toy Trains article(long)

This will be in two parts, and is from the Jan.1996 issue of Classic Toy Trains (hence forth referred to as CTT) with Neil Young. The first part is an interview CTT did with Martin Davis and Greg Feldman, directors of the investment firm Wellspring, that bought Lionel along with NY. This was a five page interview, so I am only going to copy here those parts that pertain to NY. After the interview, I will give the entire "boxed insert"article on NY. This box included two photos of NY at the train controls.

[Note of information--Richard (Dick) Kughn was the previous owner of Lionel from whom Wellspring purchased it.]

CTT: Lionel is the first acquisition Wellspring has made. What role did Neil Young, your minority partner, play in leading you to Lionel? Did he suggest you invest in the company?

Greg: Yes, he did. Neil had a relationship with Dick Kughn through Liontech. He was there when Dick was selling, and he wanted a partner to do it with.

CTT: How did Neil find you?

Greg: He had hired a financial advisor.

CTT: You see Neil as a reliable source about this hobby. Why?

Martin: Well, let me put it this way. I wish we understood it just 10 percent as well as Neil does. He's so steeped in trains.You should spend some time with him to get your answer.

CTT: Could his passion for the hobby be a problem?Could his vision be too narrow? (Wanda: Neil? Narrow vision?)

Martin: No.

CTT: Dick Kughn was certainly versed in trains.

Martin: But Dick's acollector. Neil Young is an operator.

Greg: A big difference.

Martin: And Neil has an operator mentality.

CTT: Which means?

Martin: Which means he likes to play with trains and understands the play value. Neil spent an awful lot of his own time and money developing the Rail Sounds and Train Master technology. That, to me, is indicative of somebody who understands the future of the product.Because without that we really have little chance of expanding the market,and Neil understands that. Neil is a very creative guy. If anything, he has a zillion ideas, so you need to pick and choose which ones are going to work and which ones are not. And he knows that. But he's avery creative guy and a pleasure to work with.

Greg: Neil is so widely focused and has so many ideas and so much enthusiasm that it becomes an enjoyable chore just to rope him in and say we can only do so much at at time.

Martin: Neil understands both the collector and the operating markets. Because he has kids and likes kids, he understands what kids want. Just a few days ago in Chicago (National Model &HobbyShow), kids were around the Lionel table the whole time. It was terrific. That's what happens when you see these trains. You take them to an electronics show with all the gadgets in the world, and every kid wants to play with the trains, using the remote control. That's pretty good market research.

Wanda talking here: That's most of the Neil content of the interview. Several paragraphs later, CTT asks Martin and Greg how the two of them hooked up with each other, and they discuss what each of their strong areas are, and why they are a fit with each other and Lionel.

Greg:....Of course, we didn't wake up one day and say Lionel's the perfect fit for us. That's why it's nice to have Neil as a partner. He doesn't have a lot of the business things, but he has energy, creativity, and knowledge of the product. It's a good combination.

Martin: If you're the new CEO of Lionel, (Wanda's note--they're looking to hire one) and you have the assets Greg just described, it's going to be pretty tough to fail, if you're the right person. The assets Greg brings to the table, Neil brings to the table, and I bring to the table--I'm not talking about monetary assets-represent an extraordinary group of talent.

CTT: If you had to say that one element is missing among the three of you, what might that be?

Martin: What are missing? Nothing.

Here is the boxed in feature on Neil Young from the same article as my previous post, from the Jan 1996 issue of CTT. There are also two color pictures of NY on this page, showing CTT staff some train controls. Here goes:



Neil Young's vision


Earlier in October oflast year, Neil Young paida nother of his regular visits to Classic Toy Trains to demonstrate the latest developments in the Train Master command control system and the Rail Sounds II diesel and steam locomotive sound system. During that afternoon, he put a number of Lionel models through their paces, drawing praise form CTT and MODEL RAILROADER staff members. They agreed the two systems continue to improve and break new ground in our hobby.

Neil commented on the formation of a revived Lionel Corp., following the sale of Lionel Trains Inc. He emphasized that Liontech,the business he had launched with Richard Kughn to develop and market Train Master, had been included in the purchase by Wellspring Associates. In addition, he has a key share in the new LionelCorp., which will take many active steps to expand the market for electric trains and to reach people no currently aware of Lionel trains. They may know the name, he stressed, but not consider themselves hobbyists.

Being an owner of Lionel is, Neil said, "alife-long dream." However, he doesn't feel as though he really "owns"Lionel. "We're really just guardians of Lionel." Neil recognizes that Lionel has a long and respected heritage, one he and his partners hope to make more glorious in the coming years.

"We want to bring Lionel back to the level of quality and industry leadership it held in the 1950s. It was a technological innovator back then, offering remote-controlled switches and accessorites, smoke, and a whistle, among other breakthroughs." The key, Neil Young knows as an experienced operator of Lionel trains, is quality. "You can preach quality, but if the quality isn't in the product, you aren't fooling anyone. Customers will find out pretty quickly."

The new Lionel Corp., Neil concluded, is committed to manufacturing detailed models that are superb, reliable runners. By doing so, it will honor the firm's past and ensure a bright future. More important,it will bring enjoyment to another generation of children and their families.

End of article

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