Operations

BostonCoach Cuts 45 Jobs

Posted on April 16, 2008 by LCT Staff - Also by this author - About the author

BOSTON — BostonCoach, the limousine company controlled by mutual fund giant Fidelity Investments, confirmed it eliminated 45 jobs as it closed a call center in Everett. The action was part of an effort to switch calls to a Canadian company with a much bigger phone bank, a BostonCoach spokeswoman said, adding the move still leaves BostonCoach with about 1,200 employees, including 800 in Massachusetts.

But it also comes at a time of growing financial pressure on the limousine industry, both because of falling demand from corporate customers tied to a slowing economy, and rising fuel costs that are increasing expenses. These forces are combining to cut deeply into the $2.5 billion sector, said Scott Solombrino, the chief executive of Dav El Chauffeured Transportation Network, who is active in industry trade groups. Like BostonCoach, Dav El is one of several large industry players headquartered in Massachusetts, along with Commonwealth Worldwide Chauffeured Transportation.

All three operate limousines in multiple cities and cater to the "black car" corporate market, as distinguished from the stretch limos or flashy white SUVs often hired for prom duty. But after years of steady growth, corporate travel has taken a major hit, Solombrino said, starting with the Hollywood writers strike last year and magnified by the credit crunch. That's led to layoffs across the industry, he said, and forced him to hold his own workforce steady around 2,500 people.

"Every day we get resumes from people at other companies, in all areas, because their existing employer has laid people off," he said. "If things don't improve by the time we get to the end of the second quarter, I'd say there's a good chance we could see some headcount go," he said.

In Maryland, Harold Morgan, executive vice president of the Taxicab, Limousine and Paratransit Association, a nonprofit trade group, estimates members saw a 10% decrease in business in the first quarter of this year as companies trimmed expenses. He also cited the collapse of New York financial giant Bear Stearns, a major user. "Our black car members, they're really feeling the effects of that," he said.

Corporate work accounts for around half of all limousine usage, he said, split between airport transfers and other pickups. Weddings, proms, and funerals make up just 23% of the market, according to figures from his trade group, not enough to make up for the loss of corporate work.

Founded in 1985, BostonCoach is part of Fidelity's Devonshire Investors private equity arm, which invests in areas from real estate to biotechnology. The spokeswoman, Lisa Allen, said BostonCoach had 2006 revenue of $147 million but would not disclose how it has done more recently or discuss whether the downturn has made the company more sensitive to costs. "The ground transportation industry is experiencing lower ride volume this year compared with last year, but we believe we're performing slightly better than the industry," Allen wrote via e-mail.

The company decided to close the Everett facility as it expands a previous relationship with Blue Ocean, a call center operator in Halifax, Nova Scotia, that is part of Canada's CCL Group. It handles calls for other companies and has more capacity to adjust to a rush of calls. "There's a high degree of variability in our business. We may have projected 20 calls from clients, and suddenly, it's 500 calls," she said. "Being able to staff up or down is a very tricky affair."

Allen said the 45 employees in Everett will have the opportunity to apply for other jobs at the company. About 60 other employees will remain in Boston to handle calls concerning more complex orders involving international travel or business events, Allen said.

Source: Boston Globe

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