Toy Train Revue: Do you miss running Lionel?
Richard P. Kughn: It was a real passion. I enjoyed it. It was very fulfilling for me but it was also very intense. Took a lot of my time and energy and I wasn't able to tend to my other businesses. I was getting up in years – you know I'm 70 years old now – so I thought it was time to turn it over to someone who would carry on the tradition and make the company grow ever more. So I decided to sell.
I sold the company to Martin Davis, Greg Feldman, Neil Young and I kept a small percentage. But after I sold I was not active in the day-to-day operations, did not even attend board meetings. I was Chairman Emeritus but not a member of the board.
Mistakes have been made along with some good things. Just know that Lionel is making strides to produce quality and get back to serving their customer in the true Lionel tradition.
Dick Maddox has a strong background in model railroading. He's only been in for a short time so it's too early to comment but just watch what happens in the next six months at Lionel. Everyone is going to be very happy.
TTR: Give us a little history about how you came to purchase Lionel.
Richard P. Kughn: I started negotiating with General Mills in late summer of 1985. This was at the time General Mills was in the process of bringing the plant back from Mexico and I heard they were looking for a buyer. Negotiations started in August, 1985. I waited for them to get the plant back up and running in Mt. Clemens, then we took inventory and finalized the deal in April of 1986. I sold to the Davis group in October 1995.
During my watch we raised the level of quality, got products out on time, revamped our product line and introduced new technology like Command Control and Railsounds.
TTR: What about the recent change in Lionel management?
Richard P. Kughn: They are assembling a good team. Dick Maddox is a strong leader, a strong personality. Lionel has a darn good team of people, some from my regime and some that they've hired. It's not any one individual that makes a company a success. It's teamwork. It wasn't one individual when I ran the company. We had a good team and it took everyone working together.
When I look back at the trains we produced, I feel pride. The Hudson, of course, that's a romantic thing. Then there was the Hiawatha, Daylight, scale Turbine, semi-scale freight cars, the Standard gauge re-issues, accessories. The whole process – planning sessions, working on new catalogs, seeing how an item would relate to the past and to things we were going to plan for the next year – it was just all great fun. I loved every minute of it.
TTR: Is there one thing that stands out?
Richard P. Kughn: If I had to point to one thing I would say that during my years the company grew. Remember, things were not great after the move to Mexico.
Then in the early ‘90s there was an economic downturn. Markets for items like collector cars and toy trains were down. Sales fell. Then, starting in 1994, things got better. The economy improved and more people got in the hobby. Young people showed an interest. Perhaps not as fast as would like, but there was an interest. And now, with the expanding economy, I think the future looks bright, not only for Lionel, but for all of model railroading.
No other hobby does for a young person what model railroading does. I started with Lionel when I was seven. I learned to set up the trains and take them down, I learned about mechanical things, about electricity, model making, designing buildings and train layouts - it was a tremendous learning experience. Before I was ten years old, I studied about the real railroads, about transportation.
The thing that model railroading offers that video games, computers and other hobbies don't is the camaraderie - you ask your buddies to come over after school, work together building models and you have great fun running the trains. You learn to work with other people, share your ideas with their ideas and come up with solutions. That's called teamwork and that is what makes businesses successful today. Video games can't teach you teamwork. Model trains can. So I see a great future for Lionel and all of model railroading. I see the market continuing to expand.
TTR: What about the current market?
Richard P. Kughn: Lionel's position in the market has been a good one. I don't know much about the other companies -– what their volume is, what their bottom line is – and frankly I don't care as long as we at Lionel are innovative and keep producing a quality product at a competitive price.
Only time will tell if everyone survives. The marketplace has expanded considerably. The number of dollars an individual spends on trains has expanded. The economy has been good. All this has allowed these other companies to jump in and carve out a piece of the market. If there's a downtown in the economy and the spendable dollars dry up, then only the fittest will survive.
TTR: Do you still collect?
Richard P. Kughn: Oh yes. My collection is so dog-gone big I don't have room for it anymore. I plan in the near future to sell off a lot of my duplicates.
TTR: What’s going on with Madison Hardware?
Richard P. Kughn: Well, we're in business and we are surviving. Most of the trains and parts from the old Madison is gone but we have lots of new inventory.
TTR: Looking back on your time at Lionel, what would you have done differently?
Richard P. Kughn: Nothing is perfect in this world. Maybe I would have made some different alignments and made some changes in the manufacturing process. Probably I would have produced some items we didn't and not produced some items we did. Maybe some of the marketing tools were not quite adequate and we should have done some other things in marketing. You can always look back, no matter what business you're in and ask, “Why did I do it this way? Why didn't I do it that way?" But that’s Monday morning quarterbacking. We all worked hard, had fun and I am proud of what we have accomplished.
TTR: Do you still enjoy going to York?
Richard P. Kughn: I’ll be there in October. Already made the reservations. Over the years I've made a lot of friends and we still shake hands and swap stories. I like that.
TTR: Any perks involved with owning Lionel?
Richard P. Kughn: The bonus I got out of owning Lionel was the personal satisfaction of being involved with the greatest toy train manufacturer of all time. Being a major part of it and watching it come back to life and grow. Another thing was the reception I got from the hobby – the collector, the operator, the industry – the personal relationships and the reception they all extended was very gratifying.
TTR: How did Lionel survive for 100 years?
Richard P. Kughn: Joshua Lionel Cowan was a tremendous individual. He was an innovator, a creator. He did a great job with the company. Then they ran into trouble in the '60s and General Mills guided them through the '70s and in the early '80s the company did very well. Then they moved to Mexico and General Mills seemed to lose interest in the company and that's when I bought it.
Lionel has survived because they produced quality and they gave the consumer what they wanted. And they happen to make a product that is both fun and educational. That’s why Lionel has survived for 100 years and why they will survive for another 100 years.