round2 archives

[Art Anderson]

Do not forget that Molds were inventory that was taxed here in Michigan . So if they had no use for the molds in their eyes why pay tax on them. Scrap prices raising when times were tough for the molding company comes out to things being lost/scrapped.

I've never heard of any tooling being considered inventory, as "inventory" in accounting terms refers to product available for sale, rather than the tooling and machinery necessary to produce that product. Machinery and tooling would have been taxed as just that, with a predetermined "useful life", at the end of which they were no longer taxed in most states (Indiana included).

Art

[Luc Janssens]

I believe the situation is that we need to be in utter amazement at what tooling does exist, instead of upset at what doesn't. While much of the hobby takes it as a given that it should exist, this isn't the case at all. And this just wouldn't happen in business today. First, note that most of the early tooling was produced to a much higher quality than needed, allowing it to still be in operating condition 50 years later. Today's businesses would design the tooling to last exactly the usage they had planned. Then for tooling to go into a warehouse and never be used again, until it's being looked at today is utterly amazing. Again, today, every one of those would have been inventoried, bar coded, had a asset value attached and depreciated annually. There would be a report that covered the storage costs, depreciation and other costs of that tool's continued existence, especially in situations where they paid to move this dead weight several times.

We weren't there so a lot of modelers assume that the management of these companies back in the early 1960s knew that these kits would be collected 50 years later and planned for that. Nothing is further from the truth. I had a conversation with Bob Paeth of Revell back at GSL many years ago. He said that Revell saw itself as a toy company. Their market was kids and they thought those products would be consumed, played with and thrown out. He was honored that history transpired the way it has that we remembered his work today.

In those days model companies focus was about one year out. They tried to get two releases out of each annual. The hardtop at the beginning of the season, followed by the convertible at mid-year. Things like those Revell 1961 glitter cars were a mid year attempt to get one more pressing from those tools before they'd be useless. Annuals were put on clearance at the end of the year because nobody thought anyone would ever want one of those past the model year. That was the sentiment of the 1:1 car business then. Last year's designs were old hat.

So last year's annual usually was tooled into next year's annual promo, as a cost savings effort over producing a whole new tool. It was reasoned that the tool would be scrapped otherwise. I've seen modelers today critical of the companies saying they should've started fresh every year and have kept all the tools. Nobody had a chrystal ball back then to foresee an adult market 40-50 years out. And even if they did, no company is focused out that far, way beyond the retirement of those who were then making the decisions.

Designers got rewarded for coming up with new uses for retired tools. That's how the Beverley Hillbilly truck became the Jolly Roger, and AMT annuals became that stock car series. They got more life out of tools that otherwise would have been scrapped for the metal value, the storage space, and to get the asset off the books. And that's how it went for the vast majority of consumer goods manufacture over the years. And that's how it would work today, in the age of computerized records, and lean companies.

So instead of whining about what was lost, we should be rejoicing that a good portion of the historic tooling from our hobby still exists at all!

Also if something lost shows potential, they can retool from a vintage kit, heck sometimes it's easier then trying to restore an worn out/damaged/corroded tool.

An old tool is great to have when you're releasing a limited appeal subject in limited numbers, just enough to satisfy the market and destroy the collectors value LOL

Edited August 16, 2014 by Luc Janssens

[unclescott58]

This discussion brings up a question that has nothing to do with what Round 2 may or may not have. And this deals with a company like Revell retooling an old kit like Monogram's Sizzler/now Slingster kit. Or Rommel's Rod. How economical or practical is that? I wonder what the future is of seeing more old or lost kits come back in ways like that?

I still hope Round 2 finds more stuff in their inventory that's been reported lost. And I keep hoping the stories about Jo-Han's toolings are not true, and we see someone get a hold of that stuff and reissue more of their old kits in the future.

Scott

Edited August 17, 2014 by unclescott58

[DaveM]

Actually, Art, Michigan does tax business property forever. Businesses are assessed a "personal property" tax. on everything they own, no matter how long they have had it. This is in addition to the sales taxes and the depreciation is not completely figured in. We used to keep a few vintage items on display in our shop, (like our first typewriter, and our first Mac) but we had to pay taxes on them at max prices. Eventually we scrapped them. Now, Michigan just voted down the law, so this practice is ending, but it was certainly in place back when the model companies were based here, so they would have had additional reason to get rid of surplus tooling. I think we are the only state that does this. Frankly, I'm glad to see it gone.

Edited August 17, 2014 by DaveM

[Tom Geiger]

Actually, Art, Michigan does tax business property forever. Businesses are assessed a "personal property" tax. on everything they own, no matter how long they have had it. This is in addition to the sales taxes and the depreciation is not completely figured in. We used to keep a few vintage items on display in our shop, (like our first typewriter, and our first Mac) but we had to pay taxes on them at max prices. Eventually we scrapped them. Now, Michigan just voted down the law, so this practice is ending, but it was certainly in place back when the model companies were based here, so they would have had additional reason to get rid of surplus tooling. I think we are the only state that does this. Frankly, I'm glad to see it gone.

States all have weird laws and different and creative ways to tax people. When I lived in NJ, I had a friend from VA bragging at how low his property taxes were. He neglected to tell me that they had personal property tax, being taxed on the value of your household, your cars etc. That upped the ante considerably! I had a friend in Tennessee who told me that cars old enough that they showed as zero value on the state's tax sheet were like gold there. Yea, I'd be driving a car just over that threshold! Heck, I probably do right now.

When we moved to PA, our property taxes are considerably less than they were in NJ. But nobody told us that there was a town tax of 1% on everyone in your household's income! And I worked a few towns over, and that town taxed all the non-residents who worked there, calling it a "services fee." Yea, they'll get you one way or another.

Edited August 17, 2014 by Tom Geiger

[Casey]

I have here, buried in my files someplace, a pair of tooling inventories

Please, oh please can I/we see that list, Art?

I noticed in the article John G. mentioned the inventory test shots were not completed by Ertl, so judging by the number of hanger shots shown in the blog post image, it looks like they have maybe 125 or so, and likely not all automotive kits, so that leaves a significant portion of the tooling inventory on a list only, with no physical test shot parts to indicate their state of usefulness.

I think we have a pretty good idea which molds are in China based on what RC2 reissued (and reissued, and reissued) and what Round2 has also reissued again, so we can probably count on those kits being in the Round2 lineup for the next two decades, but it's those "whoa, I didn't know that tooling still existed!" kits which interest me.

Is AMT/MPC tooling which isn't already in China still stored in the warehouse in IA, or has it all been moved elsewhere once Round2 LLC bought everything from Tomy?

[johnbuzzed]

States all have weird laws and different and creative ways to tax people. When I lived in NJ, I had a friend from VA bragging at how low his property taxes were. He neglected to tell me that they had personal property tax, being taxed on the value of your household, your cars etc. That upped the ante considerably! I had a friend in Tennessee who told me that cars old enough that they showed as zero value on the state's tax sheet were like gold there. Yea, I'd be driving a car just over that threshold! Heck, I probably do right now.

When we moved to PA, our property taxes are considerably less than they were in NJ. But nobody told us that there was a town tax of 1% on everyone in your household's income! And I worked a few towns over, and that town taxed all the non-residents who worked there, calling it a "services fee." Yea, they'll get you one way or another.

"They" will always get you for taxes and/or fees, one way or another, but that doesn't always equate. Our property taxes on LI were almost 9,000/year when we sold back in '09. That was with a "STAR" discount and my veteran's discount. We did not live in a high-dollar neighborhood, nor did we have a huge home on a lotta land. It was 1,700 sq ft on 116x65, 57 year-old, two-story "colonial".

Down here in Indian Land (I kid you not), we have a 2200 sq ft, new home, on a much larger property, on a cul-de-sac, with a nice treeline just next door, in a nice, quiet, almost rural area. The house cost about half of what we would have paid on LI and ,guaranteed, the lot would have been a lot smaller. We are close to everything vital. Two car garage, big driveway... Our taxes are just about 1,200/year. Our sales taxes are lower, our homeowners insurance is lower, as is our car insurance, registration, driver license fee... and we have no annual state inspection. Gas is cheaper, as are 2/3 of our utilities (water costs more than on LI). Yes, we pay an annual tax on the car- our county demands about $125.00/year for our '08 Hyundai. I can live with that. Funny thing is, it seems like we are missing no services that we had back on LI. One wonders where all that additional that tax $$$ does go?

[Bob Ellis]

The Etruscans complained that the government took 40% of their income. A few thousand years later, it's still true. Every place taxes you differently, but it all comes out the same.

[Casey]

I have here, buried in my files someplace, a pair of tooling inventories sent to me during my 6 months on RC2's payroll

By contrast, my tooling inventory sheets for MPC tooling are VERY organized, by kit number and name, and I would assume that this stuff is still that well sorted out, as MPC was sold to AMT/Ertl outright in 1986, while still a viable operation, up and running. As such, it's amazing to read that listing, see what truly did/does exist as identifiable MPC model kits.

Art, did you ever dig out these inventories, by chance? I know I'm not the only person who would love to see them. 

[Art Anderson]

Art, did you ever dig out these inventories, by chance? I know I'm not the only person who would love to see them. 

NO.  I really don't want to just broadcast what might be there, due to my involvement with another model company on the side.

Art