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Subject:	Re: LEGO® Systems, Inc. sells Enfield complex for $58.9 million
Newsgroups:	lugnet.general, lugnet.mediawatch
Date:	Fri, 12 Jan 2007 22:50:58 GMT
Viewed:	245 times

In lugnet.general, Joe Meno wrote:

In lugnet.general, Gerhard R. Istok wrote:

In lugnet.general, Harvey Henkelman wrote:

Lego is on it’s way out, plain and simple. By 2012, it will be a memory.

No it will still be around. In the future LEGO may not be owned by Kjeld and Gunhild anymore (Godtfred Kirk Christiansen’s 2 surviving children), however it will still be around.

There’s too much value in the brand name. A future owner may move production to China or Vietnam or India. It seems that everything else is ending up there, a loss for Europe, North America and Australia.

The future offset may be cheaper prices, but less in the way of quality.

Gary Istok

Gary’s right. One the things that is happening is that globalization of resources...the US has higher wages than the rest of the world in many things, so to bear the costs that consumers want, less expensive places have to be found to produce products. So like so many other industries, LEGO chose to streamline costs.

In this particular case, selling the facility was a good choice because it pushed expense toward maintenance of the building to those owning the building now, not TLG. It’s like having an apartment as opposed to owning a house - sure you can have a house, but with that, you have the responsibility of upkeep. At an apartment, if there’s a problem, you call the landlord. It’s much cheaper to call the landlord to tell him your water heater broke as opposed to having to buy a new one.

One thing we have to keep in mind is that LEGO is a product that has to keep its financial viability to continue. By our choices in buying, we are creating an impact that TLG has to deal with in one way or another. And it’s a tradeoff - there are no easy solutions.

Joe

IBM did a similar sell-off of their buildings and lease back a couple years ago. It turns out to save on US taxes.

-dw

Message has 2 Replies:

		Re: LEGO® Systems, Inc. sells Enfield complex for $58.9 million
(...) Yes, and C&S, one of the largest grocery distributors in the region is doing the same thing with a couple of facilities not far from Enfield - selling the buildings and then leasing them. The company I work for, also in the same region also (...) (18 years ago, 13-Jan-07, to lugnet.general, lugnet.mediawatch, FTX)

		Re: LEGO® Systems, Inc. sells Enfield complex for $58.9 million
(...) When you own the property, you benefit from the increase in real estate values over time. When I originally bought my house, my mortgage was higher than it would have cost me to rent a comparable house. Within five years, this was no longer (...) (18 years ago, 13-Jan-07, to lugnet.general, lugnet.mediawatch, FTX)

Message is in Reply To:

		Re: LEGO® Systems, Inc. sells Enfield complex for $58.9 million
(...) Gary's right. One the things that is happening is that globalization of resources...the US has higher wages than the rest of the world in many things, so to bear the costs that consumers want, less expensive places have to be found to produce (...) (18 years ago, 12-Jan-07, to lugnet.general, lugnet.mediawatch, FTX)

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