Maneuvering to avert a drop-off
At heart, Chris Hundley is a race car fan.
The self-styled speed demon doesn’t drink or smoke. He claims his only vices are horsepower and adrenaline.
Hundley talks lovingly of the Pacific F2000 series and other races he’s driven in. In 2006, he nearly died on the racetrack in a crash that left him with a broken collarbone.
But Hundley, 50, said he was unwilling to “sacrifice everything to become a starving race car driver.” So he did the next-best thing, launching into the competitive Los Angeles limo market 30 years ago.
“It’s never been my goal to have 100 cars,” said Hundley, who owns 31. “I’m not concerned about making money on every trip since doing the right thing will even everything out in the end.”
His Limousine Connection, one of the oldest chauffeured transportation companies in an industry known for quick flameouts, is stable as newer competitors struggle with trouble at the pump.
But even Hundley said he’d been “blindsided” by gas prices.
Recently, he raised his fuel surcharge 3% and has trained his employees to drive less “fuelishly,” he joked. It costs him about $50 to fill up each town car, $80 for one of the Escalades and up to $120 for the executive vans.
Richard Kane, president of the National Limousine Assn., said 4% of members have shut down in the last year, mostly pressured by fuel costs. But overall membership is growing as operators scramble for information on how to stay afloat, he said.
“They’re looking for relief,” said Kane, who also owns International Limousine Service in Washington. “Gas prices are killing us, and we can’t get the difference out of our customers.”
Many corporate clients are limiting limo travel to the upper echelon of executives and asking lower-ranked employees to take taxis, he said.
“If a customer represented 10% of your business, he’s now 8%,” Kane said. “Everyone is tightening their belts.”
So Hundley has made his operation more efficient. He tries to drive more than one passenger at a time, uses e-mail invoices to stay paperless and rents Priuses when patrons request them.
The private company’s corporate clients, many of them Fortune 500 executives, have stayed loyal, and the recent NBA playoffs helped give revenue a hefty boost. But Hundley, whose fingers constantly hover over his cellphone in its hip holster, estimates that reservations from weekend partygoers and regular Joes have slipped about 25% since the economy began wilting.
Still, Limousine Connection is going full throttle, with 10% to 12% growth each year for the last three years and $5.1 million revenue for 2007, he said.
In a recent six-week span, he bought three new cars, he said.
“People in the industry were astonished by that,” he said. “Right now everyone is very apprehensive, but you’ve got to spend money to make money.”
Among his expenses is keeping the call center -- the “heartbeat of any limo company” -- staffed around the clock. His staff includes eight dispatchers, including his son John, 22, and three employees in accounting, where his daughter Kristin, 18, sometimes helps.
There are also 48 chauffeurs, styled as “mobile concierges.” Several have been with the company for decades.
A stickler for professionalism, Hundley has employees sign a 22-page confidentiality agreement. He personally applies sticker passes for entry to special destinations to his vehicles to avoid air bubbles underneath.
At the company’s North Hollywood headquarters, in a squat building that Hundley owns, 60 miniature limo models crowd a glass cabinet next to a brick from the Indianapolis Motor Speedway.
In the stockroom, liquor containers are outnumbered by stacks of bottled water, often requested by health-conscious passengers. There’s an extra suit so Hundley can jump in as a backup driver.
Driver passes to the Golden Globe awards and the Jackson 5’s 1984 tour are displayed in his office, near posters from Comedy Central, NBC, Universal Pictures and Bravo -- all clients.
But the Hollywood native and former child actor said he rarely gets star-struck.
“I’ve met presidents, been backstage at phenomenal events, been in spectacular houses, but I’ve also taken people out for their 20th anniversary,” he said. “This is no 9-to-5 job behind the same desk.”
Hundley should know: “I’ve been working since I was walking,” he said, acting on television as a child, selling mail-order products, operating a grip truck on film sets and helping manage a rental car chain at Burbank airport. He experimented with college for a year before deciding he’d rather own a business.
So in 1978, at age 19, Hundley started his company with one repossessed silver stretch Lincoln limo. His father had to step in to secure insurance, and Hundley refinanced the family house, which he had put his acting money into and co-owned.
Business shot through the roof when the 1984 Olympics sent corporate bigwigs flooding into Los Angeles. But there was a downside. “Everyone and their brother bought a limo,” Hundley said, many without enough capital and without factoring in the cost of insurance, workers’ compensation and state fees.
As the quality of service shriveled in the subsequent price wars, limos developed a “black eye” in the minds of the public, Hundley said.
But most of the marginal operators were weeded out by 1995, with more going bankrupt when the hospitality and travel sectors nose-dived after the Sept. 11 attacks, Kane said.
Limousine Connection developed a more conservative image, phasing out two-tone stretch limos, adding sedans and marketing the company as a business tool for the jet set. But it’s the intimate touches -- such as the magazines on the back seat of an immaculate town car -- that make a difference, said Len Aarons, security driver for the British Consulate in Los Angeles, which has used the company exclusively for five years.
He said Limousine Connection drivers quickly learned to work with a motorcade for royal visits and followed along when former British Prime Minister Tony Blair visited the city in 2006.
“The professionalism, the longevity, that counts big-time,” Aarons said.
It’s just like running a restaurant, said Hundley, whose first driver was once a waiter.
“People don’t need to know the mechanics of your kitchen. They just want the food delivered on time and excellent every day,” he said. “There’s very little margin for error.”
(BEGIN TEXT OF INFOBOX)
Business: The North Hollywood company operates 31 cars that ferry clients around Southern California.
Owner: Chris Hundley
Revenue: $5.1 million in 2007