Solombrino: Will D.C. Destroy Chauffeured Car?

Posted on March 19, 2009 by LCT Staff - Also by this author - About the author

By Martin Romjue, LCT editor

SAN FRANCISCO — When Dav El CEO Scott Solombrino dramatically “monologues” to a room full of operators at an Italian restaurant in North Beach, he might as well fling all the spaghetti and meat sauce against the wall.

The longtime limo heavyweight could get away with that because he would know how to make it all stick.

In fact, the only patrons who would have needed bibs and bunny suits Wednesday night at Caesar’s Italian Restaurant amid Scott’s searing rhetorical splatter were union thugs, silly politicians, and Avis WeDriveU’s poser-chauffeurs — a “horrific trifecta” whose anti-business tendencies Solombrino says could ruin the chauffeured transportation industry.

Solombrino brought his sausage grinder of a speech to the deep- blue swamp of Nancy Pelosi’s Congressional district to spell out some of the highest stakes for survival the industry has ever confronted — “the worst in my 32 years in business.”

Hostile Environment

The combination of a leftward political establishment, an unsteady new President, a Depression-esque recession, trillions of tax dollars without a treasure chest, and populist bailout furies are gumming up the economic gears of the business travel and hospitality industries worse than a sandstorm in a Saudi desert. Caught in this recessionary maelstrom are operators losing clients and revenues because frightened firms are nixing conventions, meetings, retreats, trade shows, road shows, and routine B2B face-time travel. One out of seven American private sector workers are tied to the industries that supply chauffeured transportation with a steady clientele.

The Big Three

Solombrino, the CEO of the Boston-based Dav El Chauffeured Transportation Network and four-term past president of the National Limousine Association, focused on three key issues that require operators to temporarily turn into aggressive San Francisco-style activists to save the industry:

ONE! Union Card-Check Legislation: “We have to fight like animals to make sure this doesn’t pass.”

Card check, also known by the misnomer of Employee Free Choice Act, would allow a workforce to meet in secret and “check off” union authorization on cards — off site, in secret, in the closet, without any notice to employers. If 50% + 1 checks off, a union is born.

Depriving American workers of the democratic-staple of secret-ballot elections is “anti-American, anti-democratic, socialist, and disgusting,” Solombrino said. Desperate, corrupt unions want to circumvent the ballot box so they can resuscitate a dwindling power base of only 7.6% of private sector workers, and dictate to employers unwieldy wage and benefit terms, he said. Such tactics would hamstring chauffeured transportation companies to the point of inefficiency, he said. “They want to build unions one company at a time.” Small- to medium-size operators are the most vulnerable because they lack the deeper pockets to fight unionization efforts.

When workers get the full picture and hear both sides, the unions usually lose, Solombrino said. Card check would be the “single, stupidest legislation in U.S. history.”

With leadership from the U.S. Chamber of Commerce, the American business community has a fighting chance to sway Democratic Congressional fence-sitters on the card check issue, Solombrino said. But he emphasized that holding such sway depends on aggressive letter writing campaigns targeted to specific politicians. He warned that e-blasts, form letters, and angry phone calls are not effective. Instead, operators and association members need to write clear, original, localized letters with unique voices that confront individual politicians about preserving the basics of democracy. Such correspondence is more likely to get read and taken seriously.

TWO! Business Travel Restrictions: “They’ve made Ritz-Carlton and Four Seasons dirty words that you shouldn’t be attracted to.”

With public furor over AIG executive bonuses and corporate retreats, D.C. politicians have overreacted and globally cooled the business travel environment. Swept up in the stigma now is any private sector company or organization that wants to hold a business event at any venue better than a Motel 6 kitty-corner to a Denny’s. Legislation sponsored by Sen. John Kerry, D-Mass, would micro-manage the travel policies of corporations receiving TARP funds.

Solombrino relayed horror stories from the front lines of hospitality: While talking to the manager of the Ritz-Carlton along the Half Moon Bay coast south of San Francisco, he learned that 29 corporate clients cancelled events at the resort in the last 30 days alone. One major financial firm cancelled an event at the Breakers in Palm Beach, Fla., but still had to pony up $1 million. Another company booked 30 chauffeured vehicles for five days – and then cancelled two days before. Las Vegas is being decimated with cancellations, off 40% from last year and with entire floors of casino-resorts empty.

What’s worse, because such corporate clients who cancel are contractually obligated to still pay for the venue reservation, they essentially pay the hotel for a non-event. And to top off such absurdity, there are TARP recipients flush with taxpayer dollars who are bullied into cancelling events but also still paying for them, Solombrino explained. So tax dollars go to companies paying for events that are never held because of political and public outrage — over taxpayer dollars going to those companies. “It’s absurd, it’s insanity,” said Solombrino, frantically waving his arms in front of two long dinner tables of operators.

“Who says you can’t go to the Ritz-Carlton?” Allowing companies that can afford business events to continue holding them is a valuable stimulus in and of itself, he said. “You still have to live. . . so spend regardless of what the government says.”

As should be the case with the card-check legislation, operators and associations need to voice and write their opposition to the destructive business travel restrictions, he said. The GCLA and the NLA are publicly expressing support for a consortium of travel, transportation, and hospitality industry groups led by the U.S. Travel Association that are fighting the Kerry legislation.

THREE! Avis WeDriveU: “Avis WeDriveU needs to go away. They are no different than illegal operators.”

The third gremlin in the trifecta is actually the one where the chauffeured transportation industry appears to be prevailing. Local associations nationwide are filing legal motions and pointing out to local regulators how Avis WeDriveU so far has remained exempt from standard chauffeured transportation rules on safety, insurance, licensing, background checks, and permitting. By avoiding these costs, Avis is able to operate in a more favorable and less transparent regulatory climate, thereby undercutting the luxury limousine business model.

The New York Taxi and Limousine Commission is writing new regulations that would apply to Avis WeDriveU that could set a precedent for other municipal regulatory bodies nationwide, Solombrino said. “We have to pay thousands of dollars each year to operate legally in the U.S. No one should be above the law. We will defeat this once and for all.”

Operators in Phoenix and Atlanta are succeeding in leveling the playing field, while South Florida operators and local associations are making inroads on this issue.

When Is The Recovery?

While Solombrino lamented the “terrible, terrible, tough times,” he remains bullish on an economic recovery sooner rather than later. Just the sheer volume of stimulus, however misdirected in some areas, will yield some tangible effects, he said.

Recent, nascent signs of stability in the banking sector, financial markets, and credit providers are likely laying the groundwork for a sustained upturn, he said. While it will take some time to trickle over to chauffeured transportation, the economy appears to be regaining its footing. A Fed bond-buying binge announced Wednesday likely will ease credit, lower interest rates, and loosen purse strings, he said.

What’s For Dessert, Scott?

Solombrino served up some tried-and-true Tiramisu for the industry: “We’re not the rich guys. We’re the ones driving the car. The rich guys are in the back of the car.”

COMING UP: More coverage of the GCLA meeting in:



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