U.S. limousine companies are laying off workers and closing offices as the recession cuts into demand for the shiny black symbols of wealth and power.
Big financial companies, which routinely used limos in earlier times of plenty, are turning to less flamboyant transportation to save money and to avoid an appearance of profligacy at a time of national austerity.
BostonCoach, the limousine division owned by mutual fund giant Fidelity Investments, has closed branches in San Francisco, Dallas and Atlanta and a spokesman said the company now has 877 employees, down from 1,200 in April last year.
BostonCoach was the fourth-biggest U.S. limousine operator last year, with 671 vehicles, according to trade figures.
Its bigger national rivals also have laid off workers. They include Carey International Inc of Washington D.C., with 1,350 cars, and Dav El Chauffeured Transportation Network in Chelsea, Massachusetts, with 1,036 cars.
Dav El chief executive Scott Solombrino says he cut back his fleet by about 20 percent this year as business fell off in major markets from New York to Los Angeles.
We think the economy for us has started to bottom, but I don't think it's started to turn around, Solombrino told Reuters.
Among banks and other big financial industry customers, there's clearly been an effort to curb their travel and entertainment expenditures, he said.
Wells Fargo & Co has reduced travel costs generally with more video conferences and by limiting travel for those purposes that have a direct customer benefit, a spokeswoman for the bank said.
Total limousine industry revenue in the United States fell to $2.57 billion in 2008 from $4.76 billion in 2007, according to the trade publication Limousine, Charter & Tour in California and for most large operators the poor results continued into this year, editor Martin Romjue said.
The industry suffered similarly in the recession after the attacks of September 11, 2001 and in the 1982 downturn, but this time it has been longer and more punishing.
SHIFT TO TAXIS, BUSES
Instead of using limos, major corporate customers have been putting their executives onto taxis and buses, Romjue said.
The reasons are mainly financial, but banks getting public funds as part of a government bailout of failing institutions are wary of being seen as coddling their executives.
There's a spook factor here, where companies are thinking that they better not go to the luxury resort, and they better not get black cars either, he said.
Gary Kessler, chief executive of Carey International Inc, the big Washington limousine operator, said in a statement it had laid off an unspecified number of employees because of the sustained decrease in global demand for corporate travel.
About 48 percent of Carey is owned by Avis Budget Group Inc.
Few in the industry expect a quick turnaround.
In Clinton, New Jersey, Ken Shapiro, president of AAA Worldwide Transportation, a mid-sized company with 30 cars, said he expected business to be off only 5 percent this month compared with a year ago.
But that's because the majority of his business comes from the pharmaceutical industry instead of companies with a financial base. We didn't fall as hard. On Wall Street there are a lot fewer firms, and they're using fewer cars, he said.