Citi derails holiday toy train show

The lender, which is eliminating 52,000 jobs after getting a US$45 billion government bailout, canceled sponsorship of the free show visited by more than 125,000 people a year. It means a savings of about US$240,000 for Citigroup Inc.

Unless the bank reconsiders or another sponsor steps up, the show that started in 1987 in the building’s lobby will end Jan. 2.

“The difficult decision to discontinue this sponsorship was part of Citi’s ongoing expense-reduction efforts,” Citigroup said in an e-mailed statement. Chief Executive Officer Vikram Pandit, 51, announced on Nov. 21 that he wants to cut costs by about US$2 billion per quarter starting next year.

Dunham Studios, the Pottersville, New York-based operator of the 750-square-foot model railroad, was notified of Citigroup’s decision last month, co-owner Clarke Dunham said in an interview.

The installation features 30 separate train sets snaking around a replica of Manhattan’s skyline, panoramas of the Adirondack and Catskills mountains and a miniature drive-in theater playing the final shootout scene with actor Gary Cooper in the movie “High Noon.” Sponsoring the installation for the 2009 holiday season would cost Citigroup about US$240,000, Dunham said. The bank had a clause allowing it to opt out of the contract with 30 days’ notice, he said.

Dunham Studios’ main costs include storing the exhibit for 11 months a year at an upstate New York facility, hauling it back and forth using two 53-foot-long trucks and paying a 22-person crew to assemble it in late November and take it down in early January, Dunham said. He also has to pay to staff the exhibit seven days a week during the holidays.

“I think it’s a pretty serious mistake on the part of Citi,” said Dunham, 72, a Tony-award nominated Broadway set designer who started building model railroads professionally in the 1980s. “It’s money well spent. This is the cheapest form of advertising.”

Among major U.S. banks, Citigroup is the hardest-hit by the credit crisis that pushed the country into recession. Writedowns on mortgage bonds and surging consumer-loan delinquencies stuck the bank with a year-long string of net losses totaling US$20 billion. Last month, the bank got a US$20 billion infusion from the U.S. Treasury, on top of US$25 billion of economic-rescue funds received the previous month.

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