Ernst Paul Lehmann Patentwerk, parent firm of LGB, has transferred ownership of LGB of America to a new firm, U.S.-based G45. “In these changing times you have to keep moving forward,” said Rolf Richter, managing general partner of E.P. Lehmann Patentwerk. “This move forward provides new opportunities for us, for LGB of America, and for our friends in the United States.”
David Buffington, president of G45 and longtime publicist for LGB of America, is excited about the opportunities the ownership transfer presents. “LGB of America began as a service center for LGB owners in North America. It’s now very different. It now distributes LGB trains, Piko structures, and Noch accessories. Of course, LGB is and will remain our top brand and market leader in large scale, but this change will allow us to also offer other interesting products.”
Buffington said the move will create new opportunities as well. “LGB of America already has a well-earned reputation for service to LGB owners, and we now hope to offer consumers even more in terms of repair, upgrade, and service.”
Tony Castellano will remain chief operating officer of LGB of America, and both Buffington and Richter emphasized that their companies will continue to work together. “We have a very good relationship with LGB of America, and we will work very closely with the firm to produce new models North American modelers will want,” Richter said.
MR’s interview with G45 owner David Buffington
Model Railroader editor and publisher Terry Thompson has been following this story as it developed, and he interviewed new owner David Buffington shortly after the changes were announced. Here’s a transcript of our exclusive interview with the new owner of LGB of America, or as it’s now known, G45.
Terry: Congratulations on your new role. As [President], do you anticipate taking a hands-on role, or will the day-to-day management of the firm remain much as it was under LGB of America?
David: Tony Castellano, who has become well known and well respected in the LGB community, will remain Chief Operating Officer of LGBOA and will continue to handle the day-to-day management of LGBoA. Of course, Tony and I will talk a lot, just as we’ve been doing for the past four or five years. In the same vein, Tony and I will talk a lot to the Richters and the folks in Nürnberg, just as we’ve been doing for years and years. We have very good working relationship, and I’m sure it will continue.
Terry: Do you plan to do additional marketing or promotion of the LGB products, and others you may offer?
David: I think everyone at LGBoA – including Tony, Jack Lynch in marketing, Paul Miano in sales and myself – understands that we have to reach beyond the traditional model railroad market to find new customers, for both now and the future. That’s why LGBoA was involved in the very successful Flower & Garden Festival and Epcot this spring. That’s why we’ve been working to get LGB into garden centers and other non-traditional outlets.
Terry: Will you have exclusive LGB products for the North American market? Could these include new models as well as paint schemes?
David: Yes and yes, if you’re talking about products intended primarily for consumers in North America. But the old idea of “exclusive” products — that is, products only available in one market — has gone out the window with the coming of the Internet and cheap shipping.
Again, we will continue a very close working relationship with the folks who make LGB, but now we’ll do it as one of Lehmann’s biggest customers, not as a subsidiary. LGBoA is working closely with Lehmann on product development, and to be sure, you’ll see some interesting new American-prototype trains from LGB in 2007.
Terry: Are you considering adding other lines? Do you have specific lines in mind? Would you consider importing a European line of trains in one of the smaller scales?
David: Yes, yes and yes. We’re not prepared to make any announcements yet, but this is one of the ways this change will benefit consumers. It gives LGBoA an opportunity to offer other model railroad brands to consumers in North America. The best example is the new PIKO G-scale Taurus loco, which LGBoA is distributing here. The idea of LGBoA distributing a non-LGB, G-scale loco would have been unthinkable just a very short time ago.
Terry: Sales appear to be flat in much of the model railroad hobby? What plans do you have for countering this trend, and where do you see growth opportunities?
David: There are simply too many model railroad makers fighting for smaller pieces a shrinking demographic pie. So again, we’re working to make the pie bigger by going into non-traditional outlets like Disney, theme restaurants and garden centers. We can not forget that Wolfgang and Eberhard Richter showed us the way by creating LGB, a model train that the traditionalists laughed at when the Richters introduced it in 1968. LGB attracted thousands and thousands of people who had no prior interest in old-fashioned model railroading. We have to remember that many thousands more are still waiting for us to show them the joy of this hobby.
Terry: How important do you believe technology, especially digital technology, will become for garden railroads?
David: Very important. Lehmann’s survey research indicates that more than 40 percent of LGB owners have already adopted our digital Multi-Train System, and LGBoA’s service staff installs a tremendous number of MTS decoders in older LGB locos. The response has been tremendous to the MTS seminars now being offered by our LGB partners, Bob Brashear and Calvin Lane. So we’re very optimistic about the future for the Multi-Train System.
Terry: Where should American LGB fans turn for warranty service?
David: Nothing has changed. LGBoA’s very skilled service staff in San Diego is always standing by to handle repair and upgrade work.
Terry: Will you sell direct to consumers?
David: LGB of America has no plans to sell direct to consumers. We have considered and will consider all possible ways to reach the many, many potential consumers who simply aren’t being reached now. At the Epcot Flower & Garden Festival, for example, we worked with Disney to offer LGB to guests at the Festival. The vast majority of those people had never heard of LGB and would have had no idea where to buy it.
Terry: Do you plan changes in your relationship with North American retailers?
David: Naturally, LGBoA will still have its authorized retailers and Train Stops. But we understand that these are tough times for retailers, just as they are tough for distributors and manufacturers. Competition is fierce at all levels, but we have seen that the retailers who offer what consumers want — like strong selection, convenient hours, fair prices and great service — can succeed. We need retailers like that everywhere to grow the hobby.
Terry: Will you continue to publish an English version of Depesche (the LGB magazine)?
David: The Depesche is published by Lehmann, and it will continue to publish an English edition. (In fact, I’ll be taking a look at some proofs of the next issue as soon as I finish typing this.) It’s another example of how we’ll continue to have a very close working relationship with the folks at Lehmann, while offering the LGB family here more than ever before.
Terry: Thanks for your time, and good luck with the new venture.
