That burning question is front and center at the upcoming LCT Technology Summit.
Kelly Higgins entered the limousine business in 1981 as an owner/operator based in Topanga Canyon, CA. Working with his brother Kevin, Kelly developed a nine-car fleet of stretch limousines from Moloney, O’Gara, and Armbruster/Stageway.
As a chauffeur, Kelly naturally heard passenger comments about the features of his limousines, and developed a number of ideas that he thought should be incorporated into a custom stretch limousine. In 1982, Kelly formed his own company, commissioned a vehicle from Marquis Custom Coach, and tagged it with a nameplate reading Kelly/Stageway.
The flashy two-toned Cadillac had one of the first side consoles in the livery business and was an immediate success with customers. Within three days, Kelly had sold the car to a competitor and soon thereafter had an agreement with Marquis to be the exclusive distributor of the Kelly/Stageway model.
After the second Kelly/Stageway limousine was completed, the Marquis plant manager left to open his own shop in neighboring Westlake Village. As soon as the new shop opened its doors, Kelly brought three new Cadillacs in to be stretched. Once the cars were cut, however, the shop went out of business.
In order to salvage his chopped Cadillacs, Kelly provided capital for the company and became a partner. Eventually, Kelly acquired the company, renamed it Kelly Coachworks, and assumed responsibility for manufacturing as well as sales. Kelly Coachworks has since established itself successfully in both the private and livery limousine markets.
Kelly recently described his transition from livery operator to coach builder for Limousine & Chauffeur, and predicted a variety of industry developments for the coming year.
Higgins: I had been in the construction business and the marine maintenance business. I completed my last house in 1980. My brother and I went into the limousine business together and ran a company for about a year. Eventually, we went our separate ways and I got involved in coach building.
L&C: What do you remember about being an operator?
Higgins: I had some strange experiences. One time, we had a one week charter and I was driving for the ambassador to Iceland. All our cars were on it, plus two or three other companies. A total of about 30 cars. We had a police escort everywhere we went. There were princes and princesses and ambassadors.
One night, we had taken them all to the Beverly Hills Theater on Wilshire and the drivers were waiting at the Beverly Hills Hotel. All of a sudden, some CIA-type guys came in and said, “All chauffeurs go to your cars.” So a guy with an Uzi jumped in the front seat with me and said there was a sniper on a roof somewhere and we were going to pick up all the delegates at the theater. They had the whole area from the hotel to the theater closed.
We were driving on the sidewalks with these limousines. I had an old ’78 Lincoln with a 460 and we passed a lot of guys on the way. When we got to the theater, the secret service got the people surrounded with bodies and walked them to the limousines. When they were in the cars, they slammed the doors and said… “Get out of here.” I was shaking in my boots thinking the first guy they shoot is the driver. But there was no shooting and there was not a single word in the media about it.
Another thing I remember is that all of the cars had center consoles in those days and, as a chauffeur, I’d hear guys say, “Honey, I can’t put my arm around you.” That’s how I decided to have a limousine built with a side console and overhead controls.
L&C: What do you remember from your early days as a coachbuilder?
Higgins: There was a lot more money in the cars. I couldn’t keep the cars on the ground. There weren’t that many builders. In those days you could get a base unit for $15,000 and the cars sold for as much or more than they do today.
L&C: Is this a “buyer’s market” for limousine operators?
Higgins: I would say that the operator’s in great shape today. We were paying $48,000 a car back in ’78.
And limousines are much better today. My cars are very functional. I take cars out once a month and see what changes should be made for convenience. There are a lot of flashy cars…but you may find that you bang your elbows, or you may not be able to get to the decanters easily.
We have laid out the car so it’s user friendly. Like pump decanters. Electronic bars are nice but they taste bad, and decanters are breakable so we have pump decanters. And the positioning of the decanters, the ice, the TV, and things like that should be convenient. You will notice that, in our cars, everything is forward of the rear facing seat so you don’t have to reach behind you.
Another thing I noticed as a chauffeur was that limousines had vertical partitions and at night the driver can’t use the rear view mirror because of reflection from oncoming cars, so ours is set at an angle. We put the moon-roof over the rear seat so you can look out the moon-roof and you can have it open without the wind blowing your hair... and people can’t stand up and stick their heads outside.
We also have a unique dual battery system with continuous duty solenoid. When the key is in the on position, you have the capacity of both batteries.
L&C: As a Cadillac builder, what is your outlook for Cadillac limousines this year?
Higgins: I think Cadillac will do well. They have that big warranty... 250,000/3 years. If I was an operator, I wouldn’t pass that up because tires and brakes and batteries are all you have to worry about. And Lincoln is going to the new body style and the price is going up. I think they may price themselves out of the market. And I’m just starting up this year in Lincolns.
L&C: Would this be a good time to buy a Lincoln... before the model change and price increase?
Higgins: I figure you’re going to lose value on the ’89 Lincoln. That’s my opinion. I may be wrong. I haven’t had a good look at the ’90 model... only in pictures, but time will tell. Generally, when you have a new model, the car deflates. It’s a wonderful car that they have now. I think they’d be smart to keep that car and also have the new Town Car. That would be ideal.
Caddie needs a sheet metal change. Caddy isn’t doing a body change but they’re doing one hell of an engine change. They’re putting the 350 Corvette engine in the car with the Turbo 400 truck transmission. I think they’re really going to have a good car for ’90.
L&C: What trends do you see in the livery industry?
Higgins: Well, starting today, I’m going to be in closer touch with the livery industry. Tonight, I’m going to attend the meeting of the LOAC because there’s a good market there and we think we can compete to a certain extent. We put a little more into our cars than some of the other cars they have to buy.
L&C: What do you think about the economy?
Higgins: It looks good to me. It really does. I don’t see a downturn... at least in California because the real estate is up. There’s a housing shortage here. I just read an article in the paper this morning that my house has gone up 30% in the past year. Everyone is coming into this state with money. They’re buying four and five hundred thousand dollar homes. Who knows what may happen but I don’t see a problem. The nice thing for me at the moment is that I’m cultivating the overseas market and, over there, money is no object. You’ve got to be competitive... but their checks are good. We have a distributor to handle our cars in Japan. I understand they may cut the tariff on cars going to Japan but you still need the right representation to go to Japan.
L&C: Would higher interest rates slow the industry?
Higgins: I don’t think so. If people are making money in the business and they need a car, I don’t see a point or two chasing them away.
Prices are coming down to compensate for that.
L&C: Do you have good financing and leasing sources?
Higgins: Yes, but unless they are real strong, there would have to be some down payment on a lease. The Olympics scared the hell out of the banks. They ate a bunch of cars and that was it. My bank doesn’t even want paper. They want other types of collateral. They don’t know what to do with cars.
L&C: What are your plans for ’89?
Higgins: 60% overseas and the difference split in half between private and livery.
L&C: Do you have any plans for new distributors?
Higgins: We need distributors. We have a guy in New York. A lot of these guys want cars on the arm because they can get them on the arm from everybody else, but our little company can’t survive putting five or six cars out on the arm. But you can’t blame a dealer who can get a car free from someone until they sell it. We sell to Martin Cadillac. They’re really our biggest dealer here and we protect them.
L&C: What do you see happening among coachbuilders this year?
Higgins: I don’t know. I’m trying to figure out where all the extra cars are going to go and I just don’t know At the Cadillac show, we had a meeting with all the builders and we estimated there were probably 2,000 more cars built during the year than were needed. And it’s growing.
L&C: How many cars do you think were built?
Higgins: Several of us at the show estimated that 7,000-8,000 cars were built and 4,000-6,000 cars were sold. In ‘83, building limousines was just like flopping pancakes. All the coach builders were just having a ball- Now there are just too many coach builders. We may open a repair facility in addition to our manufacturing. You have to be flexible. That’s the key to any business.
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