"dctex99" wrote:

AND the John Deere Lindeman has metal tracks and great detail also;;;that is SpecCast, who did the D2 which retailed for LESS than $100.....they also took measurements of a CAT 15 but the BOD has not decided to produce it yet. As a model dealer my most common wants from CAT customers are 15's, 20's; other older and less detailed models that could be made cheaper than the newer and big bladed models we HAVE made.....??????

Thanks Mate , The type of feedback I was looking for .Hopefully the back room boys are taking notes from this thread .

"Old wrote:

Ianoz,
In your last couple of posts you are making some good points and suggestions. If you look back over my posts I feel I have done the same.
But what I am after is a bigger challenge, trying to get open dialogue going with the club administration, primarily the board of directors and their club functions so that there is an exchange of information and disclosure of what they are doing. This in my opinion is the only way exchange will occur that is amiable to both members and administration and things will get done. You can see how well that is working.

It's quite apparent that they are unwilling to do this and continue to cling to their "back room" fortress where they are free to do as they please with our money.

So, it appears we are at a standoff between members, at least on the BB and this administration. So I will ask you the question. What do you feel should be done about it? Would appreciate any response that others might wish to contribute as well.

I am also very concerned that there are international candidates, BOD renewals and new candidates that will be "sworn" into the same mode as we are in now. Even one vote will get them elected and only one has taken a stand towards open dialog communications and quite frankly there is high risk of that voice being stifled to.

.
Old Magnet , Your starting to see I am on the same wavelength.
The "Backroom boys "Appear not to like agitators. And Mate you are sure stirring the pot . So easy to click on a post delete . And click on Ban .
But they have a problem this time , It is not the likes of me stirring the pot, and Fob it off as the banned guys fan club stirring trouble .
It is OLD Magnet Respected by all doing the stirring .
Mate I wish you well with it . I have to go away for a week with work ,So can't be here to support you .Hope you get some satisfaction on what you are trying to do .

Mike Meyer - your thoughts in post #106 are exactly what I was hoping would come from this discussion. There are members out there with the expertise and interest to help us solve our problems. Comments about the "backroom boys" continue to surface in this discussion. It is normal for people to feel that way whenever a representative form of governance is used. This is especially true when times are not so good, as they are for our Club right now.

This type of open discussion is the best solution for those in a temporary leadership position to demonstrate their leadership, for those in the general membership to communicate their approval or disapproval and for the membership to assist the leaders by bringing out good ideas, as has been done here. This discussion is also the best method for getting out the call for members who can help, whether it is by providing special expertise or whether it is for them to become identified as the next best candidates for temporary leadership positions. I hope that those reading this who have that expertise will come forward to help, of those who know of them will encourage them to do so. We really need that help now.

I also chafe regularly against the restrictions imposed upon us by Caterpillar, Inc. It is very frustrating to see the things that I feel would be good for the Club but which we are unable to accomplish because of those restrictions. This is the unfortunate reality for us, though, as long as we have the word Caterpillar in our name. We do have the ear of Caterpillar, Inc., though. This connection and our influence has continued to grow in recent years. The time and effort expended in this area is large, and is part of the reason you don't see as much participation by some of the other Board Members here. Maintenance of that relationship, extending our influence with Caterpillar, Inc. and convincing them of the value of our organization to them take a lot of time. Movement in that relationship and realization of those benefits requires a lot of effort over time, but that work has paid dividends already and I don't doubt will continue to do so for us.

We on the Board and in management are mindful that there are many overlaps between what is good for ACMOC and what is good for Caterpillar, Inc., but there are some significant differences, too. We do what we can to keep the relationship harmonious and positive, but we don't just cow-tow to their demands, either. It is a delicate balance.

Catsteve - A later comment by ianoz about the collector market versus the toy market is correct. While we sometimes refer to the models as toys, they are clearly not priced such that someone would buy them for their kids. We have looked, and continue to look, at the toy market and consider alternatives which might allow us to produce true toys, priced somewhere around thirty or forty dollars, which could be inexpensive enough, and safe enough with no small parts, so they could be sold for kids. Caterpillar, Inc. has a robust business licensing products in this market and we have had discussions with those licensed to produce those products about working together.

The main difficulty with the toy market is that the per unit pricing is low. Development of a new product in that marketplace is similar in cost to our models. A toy tractor, say a D4 dozer, would cost about $75,000 to $150,000 to tool up. Most of the licensees in that arena have unlimited production quantities, so if you amortize that tooling cost over enough copies, you can dilute it pretty well and probably hit the retail price point needed of around $30.00. That is a pretty high volume, though, and not a volume we could probably realistically reach. The up front cash investment is still high, too. We have looked at a technical services deal, where we just assist the toy maker for a fee per unit. This economic model is much more beneficial for the Club and we may still be able to work a deal like that.

Sales are not restricted to members, although with our financial retooling, we had pulled in our marketing spending to only advertising in Toy Farmer, Toy Trucker and our own magazine. We also stopped attendance at any die cast model trade shows. We used to attend five or six of those shows per year, but we found that we were spending more attending those shows than we were collecting in net revenue from attendance. Now that we have done what we can on the internal spending side, we are opening back up on the advertising spending. We continue the Toy Trucker and Toy Farmer cycle we have always had, but also have an ad in Two-Cylinder magazine's September/October issue. We will have full page ads in Two-Cylinder, Farm Collector and Antique Power for the November/December holiday sales issues.

From a volume standpoint, most of our sales are to members, but some of the larger volume sales are to dealers who probably become members only to get the discounts which go along with membership and for the information published in the magazine. My assessment is that if you adjust for the volume to dealers who are members for discount purposes, I suspect that only slightly more of our models are currently sold to members than to non-members. If we get the marketing going again, I suspect that will return to the historical mix, where more than half were sold to non-members.

Your comment about the pricing is correct. Even in the collectibles market, I feel we have priced ourselves out of the market. We made an adjustment to this with the grader and terrace models, holding production costs down and keeping the retail price per unit below $100.00. When we do a next model, it has to be priced reasonably compared to the competition or it won't be worth doing.

Mike Walsh - The models are quite profitable on a gross profit basis. As you said in your earlier post, there are many issues in the Tax Code which allow for or require professional judgment. Allocation of general and administrative costs between program and unrelated business income is one of those areas. In preparing the tax returns, where I had flexibility, I was more as aggressive as I felt it prudent in allocating those overhead costs against the unrelated business income rather than the program expenses. I believe I have been prudent and our judgments in this area are defensible. The result of these allocations is to minimize unrelated business taxable income, and thereby tax liability. I was disappointed that, given the overall tax loss we suffered last year, I was unable to completely wipe out the unrelated business income tax liability, but I felt it more important to ensure that my preparation of the calculations was defensible than to get too aggressive with those allocations.

Your suggestion about offering former Chapter 2 members a free membership is a good one. I would even suggest that it might be nice to include a magazine, since there is advertising and other information which might be useful to them. We get a bulk rate for all magazines going to the U. K., so it wouldn't cost us much postage. We would lose some back issues which could be inventoried and sold, but that is a pretty minor value, too.

I see two problems with trying to combine production of our magazine with that of the Link Club. First, as I commented to Mike Meyer above and elsewhere, our hands are partially tied because of our licensing relationship with Caterpillar. This relationship was the genesis of the whole problem that resulted in the loss of the original Chapter 2 in the first place. The Link Club has a very nice situation right now in that they don't have any connection to Caterpillar, allowing them more freedom in their publication and operations. We would mess that up if we connected with them in publishing a joint magazine. I'm glad that they have the freedom they do and wouldn't want to impair that. The other problem I see is that the Link Club magazine needs to be reflective of their operation and organization. It would be hard to preserve that unique perspective and produce a joint magazine, too.

There are also some difficulties with gradually shifting to electronic publication of the magazine. That is definitely the direction we need to go, and creating parallel offerings is something we are working on. The difficulty is the cost of printing. There are two major categories of drivers to the cost of printing an issue. The first category are costs incurred to prepare for, clean up from and administer the run. These are pretty much the same whether you run one or ten thousand copies. The second category are per copy driven, such as paper, ink and supplies, press time, production labor and the like.

Our production runs of just over three thousand magazines are so short that most of our cost is the first category. Direct printing costs per issue are around $9,000, or about $3.00 per copy. If we cut our runs to 1,500 instead of 3,000, the direct printing would probably only drop to around $7,000, or about $4.67 per issue. On the other hand, if we printed 10,000 copies, the direct printing would probably only increase to around $12,000, or about $1.20 per copy. This problem will have to be dealt with, because eventually, most people will want an electronic copy. We will have to do as some other publications have and most will, ride the condensing costs down as paper production declines until we finally just make the jump to electronic. This won't be easy, but is a reality of operations. You can see, though, that reducing paper copies of the magazine has a counter effect on costs in the short run. Total costs are better for each copy we can avoid printing, just no where near as much better as you might hope until you get over the hump and just quit paper altogether.

Mike Walsh and gauntjoh - the videos and documentation of working weekends are both very good thoughts. Sasquatch has posted here a lot, and his videos are excellent. These are ideas that should be supported and pursued, but I don't think the Club should endeavor to make money from the work and product that Sasquatch has generously posted in support of all of us restorers. The Club should be supporting efforts such as these, financially and in other ways, too. We have an abundance of programs such as this, including the use of the patterns donated by George Logue. Preservation of this knowledge and creation of these parts are the core of our mission statement, and I don't expect them to make us money. We do need, though, to make money in other ways to support these types of programs. The models program was our primary mechanism for making money in the past. Some of this money came from members, but a lot of it came from the general public. We need to revitalize that program and add others which can support these types of programs which are our mission.

Gavin and ianoz - you have put your finger on the exact problem with the models program. We need to make models the market wants and price them at the point the market wants. Spec Cast and First Gear, two of our partners in this enterprise, have done that, we have not. We are working on strategies to turn the existing inventory into cash so that we can use it to get back on track with the models, and to open new business enterprises as they are identified. The pricing of the R2 versus the Lindeman is exactly what I had identified. Look also at the TD-25 with blade from Spec Cast versus our D9 with blade from the same source. $159.00 versus $250.00. In every case I can see, we are almost double the retail price with recently introduced models. We also have some models, like the DW20 and 456, for which I don't see any competition. I think there is a good reason there isn't any competition for those models in the marketplace.

Keep in mind, though, that the models we have in the marketplace right now were pretty much planned and the projects begun before things declined in 2008. From that market perspective, I think anything we made would have sold, it was just a matter of how long it would take to sell. Hopefully we have learned the lesson that marketability is always a concern. Take the gravy money in good times, but make sure the core product is desirable, even in the bad times.

dctex99 - What are your thoughts about another in the D2 series? How about a D2 with Be-Ge pump and John Deere hydraulic disc? How about starting a D4 series with a WWII era bare tractor, one with a Letourneau cable overhead dozer, one with a Letourneau PCU and towed scraper. What would be reasonable price points for these, $150.00 each, $125.00 each, $100.00 each, need to be less than $100.00 each? I'm not saying all or any of this could be done, just trying to gauge the market from someone who is a dealer.

I know the gas cats are always requested, but they are a lot more expensive to tool and manufacture because of all the details. It is easier to hit a price point with the late gas or early diesel tractors. We see continued inquiries about another in the D2 series, and also, of course, lots of interest in D4, D6, D7 and D8s.

ianoz and Old Magnet - I don't think anyone can consider this free ranging, constructive and positive exchange of ideas as anything but open. No post has been censored, no threat of banning has been raised and it won't be. The current administration does support and encourage this discussion. It is helpful to us and helpful to the Club. We have made repeated pleas for support and help within Club operations. We will continue to do so, and continue to welcome those who step forward. Our only request is that the dialogue and behavior continue to be respectful and constructive and suitable for a family environment. The fundamental key to growth of the Club and continued preservation is involvement of the younger generation. This can't be accomplished unless the environment is conducive to their participation.

I'm proud of how this discussion has gone so far and have no expectations other than it will continue in this direction. Good luck for your week at work. I look forward to your return and hope that there will be more to read here and some progress on the good suggestions here for you to enjoy.

Pete.

Garlic Pete,
It is apparent that you are becoming the club spokesmen and that is great for now but doesn't totally make up for the lack of communication skills for some of the rest of the board. I hope in any future candidates that this will become a basic qualification.

The area that hasn't had much coverage is the Internet and website upgrade. What is being proposed here, other then possibilities. What is the status of the process and when will we see examples of what is being persued and what is the projected timetable for implementation.

Going back to the Scott Flint issue, I had the chance to talk to some of the local members at the San Martin meet. Apparently Scott has simmered down considerably and I would suggest that now is a good time for you to approach him. It is quite clear he is dedicated to the hobby and has a considerable investment in the products he produces.
I also learned that he is a profectionist and his products are superior to the Logue produced items.

We get the message that everyone is busy working on everything discussed and have no time to run off a quick post status on what they are working on. That effort is appreciated but where and when will we see some results.

As for additional help, I think that will come in time, but not until folks get comfortable with what is going on and the direction the administration is taking. Quite frankly there is some serious healing that needs to occur before anybody is going to jump on board. The most significant being a change in attitude.

OM , I really enjoy your posts. You are are very sharp and truthful person. You think you could put a call in to Barack Obama and help out:thumb:

"JasonPayneCrawlers" wrote:

OM , I really enjoy your posts. You are are very sharp and truthful person. You think you could put a call in to Barack Obama and help out:thumb:

I'm afraid that tractor needs to go to the scrap bin......

dctex99 - What are your thoughts about another in the D2 series? How about a D2 with Be-Ge pump and John Deere hydraulic disc? How about starting a D4 series with a WWII era bare tractor, one with a Letourneau cable overhead dozer, one with a Letourneau PCU and towed scraper. What would be reasonable price points for these, $150.00 each, $125.00 each, $100.00 each, need to be less than $100.00 each? I'm not saying all or any of this could be done, just trying to gauge the market from someone who is a dealer.

My opinion is that your combining the terracers with the Cat 20 at $129 is the right price point; with shipping it edges towards $150 and that is many peoples maximum. This is why SpecCast and First Gear have had great success with what they produced as you mentioned, the TD24 and such. They still have great detail and metal tracks. The $250 point is just too high for many as ERTL kind of set the standard years ago with the
kids toys being $25-50 and their HIGHLY Detailed Precision and Key Precision models being $90 to $150. In recent times the 4WD's have creeped to $175 but the BIG 4WD market, tho limited, will pay that and have many more collectors than we have CAT collectors. I do hope we can do some older, smaller CATs; the tooling price being lower and I think both the model as used in Agriculture and the price point will increase sales with your ads in Toy Farmer and Toy Trucker; they reach a lot of people; I think Toy Farmer is still about 25,000 circulation plus online.

What are the opportunities to create toy model sets using Caterpillar gas or early diesel crawlers, with the option of John Deere towed equipment behind them, the sort of real combinations Cat and JD Dealers sold in the 1930's? Seems to me we could triple our potential market size by packaging other towed equipment brands behind our Cat toys to attract International, Case or John Deere collectors like maybe the International hay balers, and John Deere equipment, sell the Cat crawler for $79 or $89, add a John Deere pull grader or combine or International hay baler for a extra $49?

If Cat Inc currently will not let us sell more than 2,500 of any old Cat toy then we will need to discuss that matter with them further.
regards
Mike