Oh, Sh!t...

[luke strawwalker]

So Hobbico, new owners of Estes for the past couple years or so, has filed for bankruptcy, and may have to close down all their plants... and is actively looking to sell the company.

Hope you guys like needlepoint...

Later! OL J R

[bernomatic]

Definitely not good news.

I wonder how much the the new administration putting pressure on companies to bring manufacturing back to the states has impacted Hobbico?

[luke strawwalker]

Definitely not good news.

I wonder how much the the new administration putting pressure on companies to bring manufacturing back to the states has impacted Hobbico?

I doubt that has anything to do with it. Estes got burned pretty good by the "money saving" technique of having so most of their production done in China (remember the parachute fiasco with too much lead in the ink, and poor quality control, etc.) They were already moving production back here to the States well before Trump came in... and rightfully so. IMHO these companies that move everything to the "lowest cost producer" elsewhere in the world (primarily China) end up with it biting them in the butt sooner or later, because lowest cost producer means lousy quality and inferior products... Sometimes it takes awhile to catch up to them though, sometimes it's quicker...

I think this is a simple case, from what I've read, of a company overextending themselves. They grew too much too fast and had narrow margins and just didn't have enough volume/cashflow and to keep servicing their debts...

Hopefully it works out for the best. It's a shame because basically Estes has done a 180 degree turn from how it was before the buyout... basically the only thing Estes had that I would even bother thinking about buying before was motors; the emphasis on repackaged RTF kits just left me cold with ZERO interest in their other products... But the last few years with creative people like John Boren working for them and a new emphasis on the "hobby" side of it rather than just the "Wally World Specials", has made Estes a real "hobby" company again...

I'd hate to see that go away and be replaced with another "toy company" mentality again...

Later! OL J R

[Joe Wooten]

Definitely not good news.

I wonder how much the the new administration putting pressure on companies to bring manufacturing back to the states has impacted Hobbico?

I doubt that has anything to do with it. Estes got burned pretty good by the "money saving" technique of having so most of their production done in China (remember the parachute fiasco with too much lead in the ink, and poor quality control, etc.) They were already moving production back here to the States well before Trump came in... and rightfully so. IMHO these companies that move everything to the "lowest cost producer" elsewhere in the world (primarily China) end up with it biting them in the butt sooner or later, because lowest cost producer means lousy quality and inferior products... Sometimes it takes awhile to catch up to them though, sometimes it's quicker...

I think this is a simple case, from what I've read, of a company overextending themselves. They grew too much too fast and had narrow margins and just didn't have enough volume/cashflow and to keep servicing their debts...

Hopefully it works out for the best. It's a shame because basically Estes has done a 180 degree turn from how it was before the buyout... basically the only thing Estes had that I would even bother thinking about buying before was motors; the emphasis on repackaged RTF kits just left me cold with ZERO interest in their other products... But the last few years with creative people like John Boren working for them and a new emphasis on the "hobby" side of it rather than just the "Wally World Specials", has made Estes a real "hobby" company again...

I'd hate to see that go away and be replaced with another "toy company" mentality again...

Later! OL J R

Yep. A guy I got to be friends with in Tennessee had a brother who worked for a company that built pumps, mostly for swimming pools. The owner got seduced by a Chinese company that promised to make the same pumps for 1/10 the cost he was making them for. He shut down the factory after the Chinese started delivering, and had nothing but trouble with the pumps and motors crapping out after only a few months. He started inspecting them before taking delivery and found the company was scrimping on materials violating the specs, and told him tough $hit, you have to take them or go out of business. Luckily he kept all the tooling and re-started the factory, but it damn near bankrupted him and took a long time to get back the customers he lost due to crappy quality.

That is only one story, but I have many others, including a few from my old employer Westinghouse Nuclear on the dangers of outsourcing to Asia.

[luke strawwalker]

Definitely not good news.

I wonder how much the the new administration putting pressure on companies to bring manufacturing back to the states has impacted Hobbico?

I doubt that has anything to do with it. Estes got burned pretty good by the "money saving" technique of having so most of their production done in China (remember the parachute fiasco with too much lead in the ink, and poor quality control, etc.) They were already moving production back here to the States well before Trump came in... and rightfully so. IMHO these companies that move everything to the "lowest cost producer" elsewhere in the world (primarily China) end up with it biting them in the butt sooner or later, because lowest cost producer means lousy quality and inferior products... Sometimes it takes awhile to catch up to them though, sometimes it's quicker...

I think this is a simple case, from what I've read, of a company overextending themselves. They grew too much too fast and had narrow margins and just didn't have enough volume/cashflow and to keep servicing their debts...

Hopefully it works out for the best. It's a shame because basically Estes has done a 180 degree turn from how it was before the buyout... basically the only thing Estes had that I would even bother thinking about buying before was motors; the emphasis on repackaged RTF kits just left me cold with ZERO interest in their other products... But the last few years with creative people like John Boren working for them and a new emphasis on the "hobby" side of it rather than just the "Wally World Specials", has made Estes a real "hobby" company again...

I'd hate to see that go away and be replaced with another "toy company" mentality again...

Later! OL J R

Yep. A guy I got to be friends with in Tennessee had a brother who worked for a company that built pumps, mostly for swimming pools. The owner got seduced by a Chinese company that promised to make the same pumps for 1/10 the cost he was making them for. He shut down the factory after the Chinese started delivering, and had nothing but trouble with the pumps and motors crapping out after only a few months. He started inspecting them before taking delivery and found the company was scrimping on materials violating the specs, and told him tough $hit, you have to take them or go out of business. Luckily he kept all the tooling and re-started the factory, but it damn near bankrupted him and took a long time to get back the customers he lost due to crappy quality.

That is only one story, but I have many others, including a few from my old employer Westinghouse Nuclear on the dangers of outsourcing to Asia.

Yep, the new John Deere tractors are so-called "world tractors"... the engines are built in Waterloo, IA (mostly of components from abroad), but the transmissions are built in Mexico, electronics in China, front wheel drive axle assemblies from India, etc. etc. etc... Really ticking a lot of their customers off... especially since the Indian front ends evidently don't need grease anymore-- they don't install any grease fittings on them for periodic lubrication...

Of course they're certainly NOT ANY CHEAPER than they were before, even as the quality goes down the toilet...

Later! OL J R