German Toy Train Maker Off The Tracks

The world's oldest toy locomotive i i

The legendary Marklin Storchenbein engine is the world's oldest toy locomotive. It was stolen from the Marklin Toy Museum in 2005 and later recovered. Courtesy Marklin hide caption

itoggle caption Courtesy Marklin
The world's oldest toy locomotive

The legendary Marklin Storchenbein engine is the world's oldest toy locomotive. It was stolen from the Marklin Toy Museum in 2005 and later recovered.

Courtesy Marklin
The Schienenzeppelin — the rail zeppelin i i

Marklin produced several true-to-scale models of the Schienenzeppelin — the rail zeppelin — an experimental German rail car engineered in 1929 and based on the design of the airship. Courtesy Marklin hide caption

itoggle caption Courtesy Marklin
The Schienenzeppelin — the rail zeppelin

Marklin produced several true-to-scale models of the Schienenzeppelin — the rail zeppelin — an experimental German rail car engineered in 1929 and based on the design of the airship.

Courtesy Marklin
A Marklin toy tank i i

A boy holds the remote control of a Marklin toy tank, equipped with a camera, at the international toy fair in Nuremberg, Germany, in 2008. After years of not producing military vehicles, the company began creating them again to boost business. Guenter Meier/AFP/Getty Images hide caption

itoggle caption Guenter Meier/AFP/Getty Images
A Marklin toy tank

A boy holds the remote control of a Marklin toy tank, equipped with a camera, at the international toy fair in Nuremberg, Germany, in 2008. After years of not producing military vehicles, the company began creating them again to boost business.

Guenter Meier/AFP/Getty Images

The Marklin toy company's museum and store in southwest Germany have that everyday-is-Christmas-morning feel.

Marklin makes some of the world's most beloved toy trains, producing models for the past 150 years from the founding family's hometown, the city of Goppingen. Its headquarters is a prime destination for children and their parents and toy train aficionados.

Six different model trains, all made with painstaking attention to detail, snake their way along elaborate railways installed in the museum and store, passing through miniature snow-dusted villages with smiling people skating on glass ponds beside pine-dotted hillsides.

Yet there is an unseen, but very real Grinch-like villain lurking behind this quaint tableau: the global recession. Marklin is close to collapse.

Small, family-owned manufacturing companies like Marklin once formed the backbone of the German economy. Now 400 workers at Marklin have lost their jobs and a plant in Nuremberg was just shuttered, tossing dozens more people out of work.

Trying To Save The Company

The company, which pioneered electric model trains, is now in Germany's version of Chapter 11 bankruptcy protection and looking for new investors to save it from closing forever.

"The workers are deeply scared, mistrustful and cautious. They're afraid a new investor will come along who only wants to buy the brand name, but won't be interested in their skills and their labor," says Brend Rattay, a trade union official who represents Marklin's 600 remaining factory workers in Germany.

A British private equity firm, Kingsbridge Capital, bought Marklin in 2006, marking the end of a century and a half of family ownership.

Some townspeople blame the venture capitalists for souring Marklin success. But observers say that prior to the sale, the descendants of the founder bickered constantly and had started to run the company well off the rails.

But Knightsbridge Capital also failed to turn the company around. The global economic downturn administered the final, perhaps fatal, blow.

Executives Making $1,000 An Hour?

Court-appointed bankruptcy lawyer Michael Pluta says when he arrived he found the company with three CEOs paying themselves 700 euros — about $1,000 — an hour.

Pluta says his first act was to rid the company of its top-heavy management. He says he told them, "I will not pay. Bye-bye. Have a nice time!"

Pluta says he now has seven "serious investors" vying to buy the company. Each has pledged to invest at least $135 million to rebuild it. But Pluta says he is also seriously considering another option: turning to Marklin's huge global fan base — model train buffs from Alaska to Australia.

There are enough true believers, he says, to help save and revive one of Germany's oldest and most celebrated toy companies.

"Because the fans told us they would like to invest," he says. "And we have a Marklin club with more than 75,000 people in Germany. Even overseas in Japan. Japan is a very interesting market for us, even the United States."

Training A New Generation

Outside a toy store in downtown Goppingen, Peter Seizler is carrying a Marklin bag filled with new train pieces for his ever-growing track layout. The 38-year-old water engineer says his father played with model trains with him and now he is passing his passion on to his three kids. He says in this age of Xbox-like computer and video games, it is a hobby he and his children can enjoy together.

"I reached my kids with Marklin. I think it's not only the work of Marklin [but] it's also the work of parents to find a way to show the importance of things you can handle, you can take in your hands, and it's not only a game on a PC," Seizler says.

Perhaps the biggest fan still works at Marklin's downtown showroom. Giuseppe "Joe" Rocchia, 71, is the company's unofficial tour guide and de facto ambassador for perpetual youth. He came from Italy to work for Marklin in the mid 1970s and never left.

He points out a train model that was built in 1891.

"Marklin is a fascinating product. It's fascinating when you get involved," he says. "That is the reason. It's unbelievable!"

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