The Use of Limousines in the Corporate World

Two years ago, Cadillac Division General Manager John Grettenberger and developer Donald Trump met at a polo match in Palm Beach, FL and started talking about cars. Trump told Grettenberger that he had some ideas about what would make the ideal limousine. Grettenberger was intrigued and the final results of that conversation were unveiled at the 1987 Limousine & Chauffeur Show in Las Vegas last November.

The Trump Series, a joint effort involving Trump, Cadillac, and Long Island, NY-based limousine manufacturer Dillinger Coach-works, is being widely touted as the ultimate in corporate transportation. Featuring 100-percent wool carpeting, Italian leather upholstery, and a Blaupunkt stereo system, the Trump Series is definitely a luxury car without peer.

But it's also a working car. The rear deck conceals a paper shredder, a mobile FAX machine slides out from beneath the forward bench seat, and the NEC cellular phone features two handsets.

The Trump Series is by no means the only limousine built with today's corporate executive in mind and, realistically, how many people actually need a car with a paper shredder anyway? The point is, and the Trump Series proves it, limousines for corporate use have arrived.

It used to be that limousines were a rarity, used mainly by, the extremely wealthy and privileged. Until the 1960s, Cadillac's Formal Limousine, manufactured for many years by Cincinnati, OH-based Hess & Eisenhardt, dominated the market.

In the '60s, however, a handful of independent coachbuilders started cutting and stretching Cadillac and Lincoln sedans in an effort to compete with the Cadillac Formal. These custom limousines were supplied with such amenities as bench seating allowing passengers more room, and privacy dividers to separate the passengers from the drivers. Eventually, such extras as bars, televisions, and moonroofs were also added.

As the cars became more elaborate, they also made their way into the public sector. A broader range of people began discovering the thrill of splurging on a limousine for a night on the town.

Corporations as well as private individuals were bitten by the limousine bug. At a time when taxicabs were getting dirtier, more expensive, and less reliable, limousines were becoming more accessible. A recent survey by Limousine & Chauffeur magazine of limousine operators indicated that 34 percent of all limousine business is from corporate travelers.

Dr. David Powers and his wife, Dr. Patricia Braly, decided to buy a limousine when Dr. Braly took a job in San Diego, CA. Since the family is happily settled in Orange, CA, over an hour's drive from San Diego, it seemed the best way for her to travel to and from work.

Powers compares the limousine to his cellular telephone which he considers a business necessity rather than a luxury. Besides transporting Dr. Braly to and from San Diego, the limousine is also used as a sort of office on wheels. Braly's limousine, a stretch Lincoln Town Car converted by Springfield, MO-based Executive Coach Builders, is outfitted with a cellular telephone complete with two extra lines. One of the lines, Powers explains, is for call waiting while the other will be used for a computer modem. In this way, Dr. Braly can do her telephone and paper work on the road rather than later in the office.

Powers says the car is also a big boost in his business. His work involves frequent luncheon meetings and, he says, he can really tell the difference in people's reactions when he picks them up for lunch in the limousine.

"People like to be around successful people," says Powers. "I used to think the only reason you'd have a limousine is so that when you got out of it, people would see you. But the way you feel when you're in it, and how the people with you feel, is actually more important. I think my colleagues' reactions to me are more positive after they've been in the limousine."

Barbara Pastelak of Linden, NJ-bascd Gem Limousine estimates that 90 percent of her company's business comes from corporate accounts. "The corporate market has exploded in the past few years," says Pastelak, who has been in the limousine business for 12 years. "A lot of that is probably because of the threat of terrorist activity. Executives are requesting Town Cars instead of stretches these days too, probably for the same reason. They want to keep a low profile."

Gem Limousine markets directly to corporations. Pastelak approaches corporate travel managers and lets them know what Gem has to offer.

The company operates late-model Lincoln Town Cars with cellular phones and two-way radios for the corporate market. "Our drivers are constantly in radio contact with our office," says Pastelak. "That way a change of itinerary or a problem can be dealt with immediately."

Throughout most of the country, airport runs are still the most popular form of limousine use by corporations. When an executive has to travel from one city to another, it's far easier to have a limousine waiting for him than to hail a cab or rent a car and risk getting lost in a strange environment.

According to a study conducted by Carey Limousine Service, a Washington, D.C.-based worldwide limousine network, limousines are actually more cost-efficient than rental cars when it comes to transporting high-paid executives in unfamiliar cities.

Carey used the Value of Executive Time (VET) formula found in Runzheimer Reports on Travel Management to figure out how much it really costs a corporation to pay for a rental car, as opposed to how much a limousine would cost.

According to the VET formula, an executive's time actually equates to 176 percent of what he or she is paid. The additional 76 percent is the cost of providing office space, support services, and benefits.

Based on the VET formula, Carey's researchers figured that a $100,000 executive costs his company $93.62 an hour. Based on this estimate, the cost of the time the executive would spend securing a rental car, getting lost and finding his destination, parking, and returning the rental car at the end of his trip would be more expensive than the cost of a limousine and chauffeur for the same amount of time. The Carey study also pointed out that, since most limousines today are equipped with cellular phones and other office equipment, the chauffeured executive could spend more of his travel time working.

Limousine Networks

Carey International is the world's largest supplier of chauffeur-driven vehicles, with service in 301 cities in 60 countries. The system does extensive marketing and advertising with special emphasis placed on corporate travel managers and the travel industry. It is also linked to the computerized reservation networks of most major domestic and international airlines. Carey has agreements with a number of airlines to provide ground transportation to preferred passengers on international flights. In all countries, Carey provides English-speaking chauffeurs and guides, a definite advantage to the international corporate traveler.

To accommodate the traveling executive, the nationwide Dav-El limousine network provides a variety of special services to its corporate accounts. An executive with an account at one Dav-El affiliated limousine service can get a referral to other Dav-El services in approximately 160 cities. This minimizes the element of guesswork in arranging transportation in a strange area.

Also, Dav-El provides 24-hour service 365 days a year. "Corporate accounts are always guaranteed a car," says Dav-El President Scott Solombrino. "No matter what else is going on in the city."

Dav-El also offers an airport concierge set vice at many airports. The concierge will meet the client at his flight gate and escort him to the airport's VIP lounge. While the client is relaxing, the concierge takes care of his luggage as well as any ticketing or reservations. The service will also take care of extras such as hotel reservations, suggesting travel agencies, or getting tickets to the theater or a sporting event.

According to Caren Maffucci of Houston, TX-based Southwest Carriage Limousine, 75 percent of her company's business comes from corporate accounts such as KLM Airlines and Exxon Chemical Corp. Southwest Carriage offers its corporate clients a choice of two special reservation procedures.

"We have exclusive ground transportation rights with Exxon in Houston," Maffucci says. "To make the reservation process easier, we FAX them the reservation form which they fill out and FAX back. We then FAX them a printed trip ticket. It's a 10-minute procedure and no mistakes are made."

The KLM Airline account is even more detailed because KLM provides limousine transportation for all first class or business class passengers. A computer "smart modem" hooks KLM's computer to Southwest Carriage's. KLM inputs reservation requests into the computer daily. The Southwest computer then prints out the trip tickets, which are sent to KLM for verification.

"If we tried to handle reservations like that over the phone it would be an all-day job," says Maffucci. Southwest Carriage also uses the FAX machine for invoice and billing purposes. Maffucci says that, since the system was installed last November, the collection process has become much more efficient.

What do executives want in a limousine?

"Cleanliness," says Mayra Milian, manager of travel services for The Spectrum Group in Los Angeles. "Both the car and the driver have to be clean. And on time, of course, because passengers have a plane to catch or somewhere to be."

Milian doesn't think a lot of fancy gadgets are necessary for a corporate traveler. "A telephone is nice," she says. "A television isn't really necessary. And really, a stretch Lincoln or a Town Car is the way to go for corporate travel. You don't need or want to get too flashy."

Rick Anderson of New York-based Herzog Cadillac Rental tends to agree. "Most executives want a sedan, unless there are a lot of people," he says. "Or, if it's going to be a long trip, they may want a stretch with a television. It's an image tiling, really. Executives want to maintain a low profile and not seem too ostentatious."

Rosemary Sirrine of Midland, Mi-based Dow Chemical also prefers sedans in most instances. "Not only do they cost less, they are more practical from a security standpoint," she says. "With the threat of terrorism, you don't want a really flashy car."

Surprisingly, none of the people who expressed concern about security will go so far as to require specially-trained chauffeur bodyguards. Most people assume that the limousine companies train their drivers to deal with security problems.

Sirrine believes that it is better to cultivate relationships with certain limousine companies and use them all the time, rather than to use new services frequently. "The executives prefer it that way too," she says. "I've had some tell me specifically not to stop using a certain company. Also, they get to know the drivers, and the drivers get to know them. It makes them feel good when they get the same driver and he recognizes them."

Sirrine prefers to work with larger limousine companies rather than one- or two-car operations. Primarily, she has found the companies she uses through the National Passenger Traffic Association (NPTA) - an association of corporate travel managers.

Many of the country's coach-builders are attuned to the fact that limousines are increasing in popularity in the business world and are designing cars accordingly. Cellular telephones and desks are perhaps the two most common amenities aimed at the corporate market. Mobile FAX machines and computer terminals or modems are also becoming more popular.

Haverhill, MA-based Royale Limousine Manufacturers introduced a new 12-inch corporate limousine conversion at the Limousine & Chauffeur Show in Atlantic City last January. Designed with the executive in mind, the car contains a front-mounted VCR, a computer compatible eight-inch color television monitor, and rear seat pockets for paperwork storage. In keeping with most corporations' desire for a low profile, the car is understated yet elegant.

Coachbuilders are also able to customize cars to meet specific needs. Schaumburg, IL-based Limousine Werks, for example, recently installed a drawing board with reading lamps in a car for a commercial builder.

"Anything found in an office can be duplicated in a limo," says Matthew Baines, president of Limousine Werks. "Corporate users expect an array of options created especially for the business person."

Fort Smith, AR-based Armbruster/Stageway has two ears designed with the corporate market in mind. The Squire is built on the Lincoln Town Car Sedan. The Squire is not stretched, making it a chauffeur-optional car, but it docs feature a fold-down writing table, automatic table work lights, reading lights, and dark tinted glass.

Armbruster/Stageway's Manhattan is built on the Cadillac chassis. This car is available in three different stretch lengths and offers a variety of amenities such as privacy partition, storage pockets, and rear-facing, fold-down seating for three additional passengers.

While sedans and stretches continue to be the most popular type of limousine, coaches designed to carry more people are also a viable tool in the business world. Vehicles such as the Executive Cruiser by Boca Raton, FL-based Zimmer Motor Coach can serve as a boardroom on wheels when groups of up to nine passengers are traveling together.

The 29-foot Executive Cruiser made its debut in 1987. Electrical outlets make it possible for business travelers to catch up on paperwork, dictation, or typing. The Zimmer also offers optional individual chair tables or a conference table.

There are currently an estimated 5,500 limousine services in the country. Approximately 50 coach-builders supply the industry with stretched Cadillacs and Lincolns each year. Competition among limousine operators is heated but there are those companies that seek an edge by operating without proper licensing or liability insurance.

The Public Utilities Commission governs the limousine industry in most states. In addition, companies are required to carry a minimum amount of liability insurance. By asking to see a company's PUC license, and proof of insurance, a corporation can ensure that a company is complying with state laws.

The variety of cars and options available - everything from a basic-sedan with tinted windows to a stretch with a computer hookup-make it possible for every executive to find a car that meets his or her individual needs.

Large Fleets Trim Executive Cars

A recent survey shows an emerging trend to reduce the number of executive cars in corporate fleets. According to a Runzheimer Reports On Transportation survey, the executive company car is being cut back. Three reasons were cited for the decrease in executive cars: a change in tax laws increased the tax on fringe benefits, such as executive cars; insurance rates have increased, and the current trend among most businesses is to trim excess expenses.

Larger fleets were affected the most, as fleets with more than 500 vehicles decreased executive cars by 19 percent (Table I). However, according to Ken Groh, Runzheimer transportation consultant, companies with smaller fleets are more likely to be privately held, and therefore, less likely to encounter stockholders w ho question the need for an executive car.

The survey also showed that 44 percent of the car models that corporations provide executives are considered "top-of-the-line" models. These include all Cadillacs and Lincolns, plus the most expensive Oldsmobiles, Buicks. Chevrolets. Chryslers. Mercurys. and Fords. An almost equal amount, 42 percent, are middle-line models which are often the same models provided to other fleet drivers.

Groh adds that the changing of car models suggests that many corporations are downsizing the fleet car provided to executives. "This may be the solution to the problem of giving up what many employees feel is an expected fringe benefit," says Groh.

Fleets Decreasing Executive Car Use

Source: Runzheimer