Pullman Company business model

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Pullman Company business model
Posted by Lithonia Operator on Sunday, December 29, 2019 9:44 PM

Could someone explain the Pullman Company business model to me?

Did Pullman pay the railroads to haul their cars? On one hand it seems like they would have, as they were running their own "hotels." But OTOH, the railroads benefited from having the Pullmans on the train; those passengers, I assume, had to buy a regular ticket as well as the Pullman one; so the sleepers helped the railroads sell regular tickets, plus provided customers for the dining car.

Briefly, how did the money flow?

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Posted by Lithonia Operator on Monday, December 30, 2019 4:15 PM

I've now learned that the railroads paid the Pullman Co. (generally a mileage rate) to use the Pullman cars on their trains. This generated sales of first-class tickets sold by the railroads, and such tickets were required by anyone wishing to buy a Pullman berth. Having these people aboard also generated dining car business.

The Pullman Company, separately, sold Pullman tickets for the actual accomodations. So they got that revenue on top of what the railroads paid for using the cars. A Pullman conductor dealt with the Pullman tickets, not the railroad's regular conductor.

In some contracts, the Pullman Company would forgive some/all of the mileage charges once a certain level of revenue from Pullman tickets was reached on that particular train.

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Posted by divebardave on Monday, December 30, 2019 5:02 PM

and somehow they had a monopoly and got into Anti-Trust trouble?

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Posted by BaltACD on Monday, December 30, 2019 6:22 PM

divebardave
and somehow they had a monopoly and got into Anti-Trust trouble?

Pullman Company's monopoly was that they insisted in being the only builders of the equipment that was operated in Pullman service within the USA.  In the late 30's the Budd Company built the streamlined Denver Zephyr with sleeping cars - Pullman Company and the CB&Q got into a level of warfare about this.  While they 'ironed things out' it set off the monopoly 'ear worm' that ended up in the Anti-Trust actions taken against the Pullman Company.  A number of legal precedents were set in the course of the case.

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Posted by rcdrye on Tuesday, December 31, 2019 9:54 PM

In general before the 1948 breakup Pullman owned the sleepers that were leased by the railroad companies, even the ones painted for the railroads.  This blurred a bit in the 1936-1948 timeframe, where many lightweight "Pullmans" were railroad owned and leased back to Pullman.  Post-breakup only "pool" cars were owned by Pullman.

In the postwar model Pullman operated both pool cars and leased railroad-owned sleepers (many formerly owned by Pullman and assigned in the breakup).  Cars not needed by the owning railroad at any given time could be temporarily re-assigned by Pullman, sometimes for extended periods. This gave a large measure of flexibility for seasonal and special operations, and for emergency replacements on regular assignments.

Regular Pullman cars were assigned to "lines", with a particular type of car assigned to the line.  Pullman eventually dropped the requirement for a Conductor on trains with only a single car, allowing the porter to collect the Pullman tickets.  Trains with multiple Pullmans had Pullman Conductors into the 1960s.

Some railroads operated their own sleepers but still had contracts with Pullman to get access to the pool.  Soo Line operated its own sleepers but used Pullman pool cars extensively on their popular summer trains operated with Canadian Pacific (not a Pullman customer). 

Some other railroads operated Pullman lines on specific trains to handle interline cars even after they had taken over operation of their own sleeping cars.  New York Central dropped its overall contract with Pullman in 1958, but carried Pullmans for the Southern and C&O into the mid-1960s.

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Posted by BaltACD on Monday, February 10, 2020 10:22 PM

See if you can find 'Travel by Pullman - a century of service' by Joe Welsh & Bill Howes.

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Posted by Sunnyland on Tuesday, February 18, 2020 3:28 PM

very interesting, never quite sure how it all worked.  Only experience on a Pullman was when 2 friends and I took a sleeper bedroom to CA in 1965.  None of us wanted to ride alone in a seat on coach, so this was the solution. Dad booked our tickets thru UP sales office and there was an extra surcharge on the basic coach fare for the bedroom. My understanding was UP got the coach portion and Pullman the extra fare, never knew how they divided up cost of hauling the cars.  Dad always said regular conductor was still the boss or "brains" as Mom always called them. I saw that when our train backed into St. Louis Union Station and the N&W conductor came back to tweet the whistle as the Pullman conductor stood beside him.  N&W took us to KC where we were switched over to UP and then switch over at Ogden  to SP.  On return trip we were able to ride the all Pullman UP City of Los Angeles train to Ogden, had dome diner and fancy lounges, then back to reality when our cars were put on UP City of St. Louis. Glad I did get to experience it one time, other train trips were in coach with parents. Have taken Amtrak sleepers but all the same train not divided like it was with Pullman. 

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Posted by Sunnyland on Tuesday, February 18, 2020 3:47 PM

very interesting, never quite sure how it all worked.  Only experience on a Pullman was when 2 friends and I took a sleeper bedroom to CA in 1965.  None of us wanted to ride alone in a seat on coach, so this was the solution. Dad booked our tickets thru UP sales office and there was an extra surcharge on the basic coach fare for the bedroom. My understanding was UP got the coach portion and Pullman the extra fare, never knew how they divided up cost of hauling the cars.  Dad always said regular conductor was still the boss or "brains" as Mom always called them. I saw that when our train backed into St. Louis Union Station and the N&W conductor came back to tweet the whistle as the Pullman conductor stood beside him.  N&W took us to KC where we were switched over to UP and then switch over at Ogden  to SP.  On return trip we were able to ride the all Pullman UP City of Los Angeles train to Ogden, had dome diner and fancy lounges, then back to reality when our cars were put on UP City of St. Louis. Glad I did get to experience it one time, other train trips were in coach with parents. Have taken Amtrak sleepers but all the same train not divided like it was with Pullman. 

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Posted by Deggesty on Tuesday, February 18, 2020 8:42 PM

Sunnyland

very interesting, never quite sure how it all worked.  Only experience on a Pullman was when 2 friends and I took a sleeper bedroom to CA in 1965.  None of us wanted to ride alone in a seat on coach, so this was the solution. Dad booked our tickets thru UP sales office and there was an extra surcharge on the basic coach fare for the bedroom. My understanding was UP got the coach portion and Pullman the extra fare, never knew how they divided up cost of hauling the cars.  Dad always said regular conductor was still the boss or "brains" as Mom always called them. I saw that when our train backed into St. Louis Union Station and the N&W conductor came back to tweet the whistle as the Pullman conductor stood beside him.  N&W took us to KC where we were switched over to UP and then switch over at Ogden  to SP.  On return trip we were able to ride the all Pullman UP City of Los Angeles train to Ogden, had dome diner and fancy lounges, then back to reality when our cars were put on UP City of St. Louis. Glad I did get to experience it one time, other train trips were in coach with parents. Have taken Amtrak sleepers but all the same train not divided like it was with Pullman. 

 

Yes, so far as the operation of the train was concerned, the railroad conductor was in charge--and the Pullman conductor (or porter in charge if there were only one Pullman in the train) was in charge of the service rendered in the Pullmans. The two conductors would come through the Pullmans together, and the railroad conductor would take the "transportation" and the Pullman conductor would take the "space."

I really do not recall how it was, if the porter took my two tickets or if the conductor was with him, when I had a roomette in the only Pullman when I rode from New Orleans to Kansas City in September, 1968.  I do remember boarding a passenger at one stop because the porter was eating lunch in the diner-obeservation car, and telling the porter which roomette his passenger was in when he came up from the rear. I think the conductor rebuked him for not being on the ground at a station stop, for he was unhappy when he came back up..

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Posted by woody9 on Thursday, February 27, 2020 12:29 AM

My late father was a Pullman conductor for 25 years right up to the day in 1971 that Amtrak took his job so the reference to conductors ending in the 60's is not correct. The Pullman conductor had to be up and around at every stop to board ticketed passangers and or sell space.

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Posted by CSSHEGEWISCH on Thursday, February 27, 2020 10:07 AM

I believe that the Pullman Company ceased operations on December 31, 1967.  The remaining Pullman routes were taken over by the various railroads and porters and in some cases Pullman conductors were picked up by the railroads.

The daily commute is part of everyday life but I get two rides a day out of it. Paul
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Posted by Deggesty on Friday, February 28, 2020 7:38 PM

CSSHEGEWISCH

I believe that the Pullman Company ceased operations on December 31, 1967.  The remaining Pullman routes were taken over by the various railroads and porters and in some cases Pullman conductors were picked up by the railroads.

 

Pullman carried on through 1968. My last trip with a Pullman conductor was in late November that year.

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Posted by Lithonia Operator on Friday, February 28, 2020 9:36 PM

Johnny, how long were you a passenger train conductor? And on what road?

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Posted by Deggesty on Saturday, February 29, 2020 8:07 AM

Lithonia Operator

Johnny, how long were you a passenger train conductor? And on what road?

 

I am sorry if I have given the impression thatI ever worked for a railroad. All I can do  is recount my interactions with many different railroad employees--men who worked in stations and men in road service. Forty-five and more years ago, because of my interactions, I did various things that I would not dream of doing now because the companies are much stricter now than they were back then, such as, when I lived at the north end of the AT&N, I played brakeman, switch tender, street crossing flagman, and engineer (I would run an engine around the wye). Once, an IC conductor invited me to help him sort his tickets (you might be amazed at the different ticket forms used by different roads).

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Posted by Lithonia Operator on Saturday, February 29, 2020 8:47 AM

Aha. And I was thinking I had just forgotten what railroad you worked for.

(When you wrote "My last trip with a Pullman conductor was in late November that year." I took that to mean you were the railroad's train conductor, working the same train that a Pullman conductor did also.)

In other words, you just had way more fun than most people!!

YesYes

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Posted by Deggesty on Saturday, February 29, 2020 10:35 AM

Lithonia Operator

Aha. And I was thinking I had just forgotten what railroad you worked for.

(When you wrote "My last trip with a Pullman conductor was in late November that year." I took that to mean you were the railroad's train conductor, working the same train that a Pullman conductor did also.)

In other words, you just had way more fun than most people!!

YesYes

 

Yes, I have told people that I did not have a toy train to play with when I was little, so when I got out into the world, I began playing with the real thing. I was always careful to get permission to do whatever I did. Usually, I asked men whom I knew or men who, even though I did not know them personally, knew who I was. I did ask the superintendent of the Tennessee Division of the IC for permission to ride the engine of #1 from Memphis to Grenada, Mississippi, and he granted me permission. I also asked the superintendent of the Louisiana Division for permission to ride the engine from Jackson to New Orleans (the same trip), and his response was that they did not grant such permission.

Johnny

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Posted by BaltACD on Monday, March 2, 2020 1:08 PM

Chapter 5 of the book "The Early Zephyrs" by Geoffrey H. Doughty has a rather explanation of the conflicts with the Pullman Company that the CB&Q encountered when the introduced the Budd built Denver Zephyr and how thing ultimately ended up in the court case of the United States vs. Pullman Company.

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Posted by Overmod on Monday, March 2, 2020 1:33 PM

BaltACD

Chapter 5 of the book "The Early Zephyrs" by Geoffrey H. Doughty has a rather good explanation of the conflicts with the Pullman Company that the CB&Q encountered when they introduced the Budd-built Denver Zephyr and how things ultimately ended up in the court case of the United States vs. Pullman Company.

To be honest, the thing did not end up with US v. Pullman, in 1941: that was only the beginning of the effective part.  In my opinion the culmination was here:

https://law.justia.com/cases/federal/district-courts/FSupp/64/108/1952998/

(which contains a brief synopsis of the situation, and the course of events that followed the Court decision to 'break the Pullman monopoly'.

Perhaps with a little hindsight, it's pretty clear that the Court's veiled hints that Pullman, if they chose the sleeping-car business over carbuilding, would still be bound by significant constraints in the judgment.  I remember reading as early as the Sixties that Pullman-Standard and its evolving freight-car business was, even in the mid-Forties, a much better "business" than providing sleeping-car service.

Someone has surely told the story, though, about what Otis and Glore-Forgan thought they were going to acquire with the 'premier' national sleeping-car service.  This was, just like steam, something that would unravel in perceived value with dramatic speed in the following years ... and it wouldn't matter if one of those firms, or the railroads as an interested group, tried to make the franchise continue to pay as when it was the only real 'thinkable' option for long-distance travel...

 

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Posted by david vartanoff on Tuesday, March 10, 2020 2:11 AM

It is my understanding that the "Pullman Co" that is the onboard franchise was jointly owned based loosely on the sleeping car mileage each participating "owner" operated.   So a RR "bought" a car from P-S, ACF, Budd, St Louis Car, leased it to the Pullman Co which maintained it supplied fresh linens, had the drinks concession in a sleeper/lounge car, etc.   If a given car was OOS for maintenance, and the owning road did not have a substitute from its own fleet, an agreed  car rom among the leased cars was used.  Asnoted by others NYC had dropped out for its own trains, but NYC cars in Pullman Lease were available for special movements.    In my files of several California Zephyr consists in 1961, older NYC sleepers are shown operatad for tour group usage.     

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Posted by CMStPnP on Friday, March 13, 2020 12:51 PM

And actually, Pullman is still with us if you follow the Corporate Lineage.   Their freight car building was sold to Trininty Industries.   Remaining Passenger car plans were sold to Bombardier as Pullman Technology but then the company continued on and merged with Whelabrator-Frye in 1980 as Pullman, then sold to Waste Management and I think they are independent now as Pullman Power LLC.  Here is their website:

https://www.pullman-services.com/

A purchase of the Pullman Company in 1987 that was later sold to Tenneco in the late 1990's............

https://www.nytimes.com/1987/05/27/business/company-news-pullman-agrees-to-buy-clevite.html

 

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Posted by Overmod on Saturday, March 14, 2020 1:41 PM

david vartanoff
It is my understanding that the "Pullman Co" that is the onboard franchise was jointly owned based loosely on the sleeping car mileage each participating "owner" operated. 

We may need a little directed history to keep the 'Pullman' names straight; they begin to take on the sort of meaning of minor revisions made on major reorganizations in the Gilded Age robber-baron era.  The "Pullman" of specific interest here, between the late Forties and early Sixties, is the entity operating sleepers as sold to the railroads; see the language used here, particularly in 2(1):

1. That the said contract of sale be and the same is hereby approved upon the conditions herein specified.

2. That the said conditions of approval are the following:

(1) That no person shall be at the same time a director of Pullman, Inc. and of any vendee railroad, or of Pullman Standard and of any such railroad, or of Pullman, Inc. and of Pullman Company, or of Pullman Company and of Pullman Standard;

(2) That in the event that Pullman Company desires to acquire new sleeping cars the purchase shall be made only after competitive bidding in the same manner as provided by the regulations ordered by the Interstate Commerce Commission on October 6, 1919, to be effective for competitive bidding, as those regulations have been or may hereafter be amended from time to time by the Interstate Commerce Commission;

(3) That in the event that any vendee railroad desires to acquire new sleeping cars the purchase shall be made only after like competitive bidding;

(4) That the term "vendee railroad" as used in the foregoing sub-paragraphs (1) and (3) of Paragraph 2, means a railroad which has purchased and at the time owns or controls any of the stock of the Pullman Company or at the time owns or controls the stock of any corporation to which any of the stock of the Pullman Company, or the assets or business of said Pullman Company or any substantial portion of the said assets of business, may be sold or transferred;

3. That after consummation of the sale hereby approved, Pullman Company and any person or corporation to whom the vendee railroads may hereafter sell Pullman Company's stock or assets shall continue to be bound until further order of the Court by all the provisions of the decree of this Court made May 8, 1944.

4. That the Pullman Company or any person or corporation to whom the vendee railroads may hereafter sell Pullman's stock or assets shall offer to enter into a contract to supply, as available, excess sleeping cars, not purchased by individual railroads, upon proper terms, to such railroads as may desire such contract.

5. That such detailed agreement as Pullman, Inc. and the vendee railroads may formulate in order to consummate the sale hereby approved shall before execution be submitted to this court for approval together with evidence that no such interlocking directorates continue to exist as are herein disapproved.

6. That the terms of the order of this Court entered March 22, 1945, are hereby declared to have been complied with by Pullman, Inc.

7. That the declarations of this order shall have the same effect as if injunction had issued to enforce them.

This appears at least to make a distinction between 'Pullman Company' and 'Pullman Inc.' as the name of the thing providing actual Pullman service up to 1968 or whenever, presumably with 'former' employees continuing to work routes or trains with sleepers thereafter, up to Amtrak.

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Posted by daveklepper on Sunday, March 15, 2020 6:48 AM

Adding to the confusion, were not the specific deluxe British trains, like the British Southern Railway's Brighton Bell and Bournmouth Bell also called Pullmans?  No sleeping cars, but at-table seating with Tea and Scones complementary. The Brighton Bell was EMU!  Later, there were diesel fairly fast Blue Pullmans.  Again, no sleeping cars.

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Posted by Deggesty on Sunday, March 15, 2020 7:34 AM

daveklepper

Adding to the confusion, were not the specific deluxe British trains, like the British Southern Railway's Brighton Bell and Bournmouth Bell also called Pullmans?  No sleeping cars, but at-table seating with Tea and Scones complementary. The Brighton Bell was EMU!  Later, there were diesel fairly fast Blue Pullmans.  Again, no sleeping cars.

 

Yes, Dave, I understood that that deluxe service was called "Pullman."

Johnny

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Posted by daveklepper on Sunday, March 15, 2020 7:41 AM

Was there ever any business connection of any type between the USA Pullman and Great Britain's?

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Posted by Overmod on Sunday, March 15, 2020 12:30 PM

daveklepper
Was there ever any business connection of any type between the USA Pullman and Great Britain's?

Of course it started out being the British version of the American company.  It rather quickly diverged (as did other "American-started" British companies) and wound up combined with the CIWL under bankers' control -- see for example this abbreviated account:

The de-Luxe "Pullman" day trains of the CIWL have their own history. After 1900 the company, over-expanded by luxury trains and its hotel chain, suffered horrendous losses. The banks together with director Davidson Dalziel wanted to buy out CIWL founder Georges Nagelmackers. Dalziel's daughter had married Nagelmackers' son Rene and he, with the help by the famous banker J.P. Morgan, met the U.S. steel magnate Mr. Schwab, who finally saved Wagons-Lits and Dalziel. The first all-steel sleepers subsequently were ordered in the USA, but due to WWI not built (see Repas Bleu, issue 45). Davidson Dalziel, then Lord Dalziel of Wooler, secretly acquired the British Pullman Palace Car Co. in 1908 and after WWI he was Chairman of the Pullman Car Co. (PCC) in England as well as President of CIWL and in 1928 his CIWL acquired Cooks (now Wagons-Lits belongs to the Accor Hotel Group).

The general subject has been covered in some other references, usually without too much concern for relative lack of penetration of the American Pullman Company in other parts of the world as a manufacturing/operating agency of the type it had become in "US-America" up to the late '30s. 

Just for fun, an image from the above quote source:

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Posted by 54light15 on Sunday, March 15, 2020 2:06 PM

Here's a Pullman that had rubber tires. Built for kings, despots and popes. I had a chance to buy one for $5,000.00 a few years ago. Glad I didn't, but if I lost my home, I could have lived in it. 

https://www.roadandtrack.com/car-culture/classic-cars/a19434251/mercedes-benz-600-pullman-for-sale/ 

 

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Posted by Overmod on Sunday, March 15, 2020 2:32 PM

54light15
Here's a Pullman that had rubber tires.

Why were you glad you didn't?  Did you think you'd pay more to fix the hydraulics than it would be worth?  (For the 'unerwachsene' this car has hydraulic power windows and central door locks, among many other things)

The only 'unfortunate' thing about these is that they have a six-liter motor, which has a frightening thirst for premium gas.  (Worse yet was the King Kong of the classic 'Mercedeses', the 450SEL 6.9, which is a trip to drive but you pay dearly for the privilege and even more dearly to keep it running -- to my knowledge these didn't have a factory 'stretch' version as they were for owner-drivers...)

When I was little and much more naive, finding out about these 'Pullmans' instantly made me think they had sleeping arrangements for the passengers -- after all, another German company's Westphalias had sleeping at a far lower price! -- on the fold-down bunk principle in Pullman cars.  Ah, to be young and idealistic!

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Posted by BaltACD on Sunday, March 15, 2020 5:58 PM

Overmod
 
54light15
Here's a Pullman that had rubber tires. 

Why were you glad you didn't?  Did you think you'd pay more to fix the hydraulics than it would be worth?  (For the 'unerwachsene' this car has hydraulic power windows and central door locks, among many other things)

The only 'unfortunate' thing about these is that they have a six-liter motor, which has a frightening thirst for premium gas.  (Worse yet was the King Kong of the classic 'Mercedeses', the 450SEL 6.9, which is a trip to drive but you pay dearly for the privilege and even more dearly to keep it running -- to my knowledge these didn't have a factory 'stretch' version as they were for owner-drivers...)

When I was little and much more naive, finding out about these 'Pullmans' instantly made me think they had sleeping arrangements for the passengers -- after all, another German company's Westphalias had sleeping at a far lower price! -- on the fold-down bunk principle in Pullman cars.  Ah, to be young and idealistic!

If you have to ask about the costs, you can't afford it.

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Posted by 54light15 on Sunday, March 15, 2020 7:39 PM

Well, I had a close look at that car. The suspension is pneumatic; each corner of the car has a leveling valve with an air bag that takes the place of conventional springs. To replace all of them is at least $2,000.00 for each corner. All of the other functions such as the windows and door locks are hydraulic and one window switch is more than 2 grand. The suspension of the recently retired CLRVs is almost identical to what is in these cars (but larger, of course) and being designed in Switzerland leads me to believe someone on the staff had a 600 or a 300 SEL. 

Lookng under that car, I saw how it was kept level by threaded rod coming from up above down to heavy metal plates attached to the lower control arms so to keep the car up. Rather scary, I thought. 

A friend has a 1968 300SEL 6.3 which has the same engine as a 600. I drove it once. It has a tachometer and at 60 mph, the engine might be doing 1,200 rpm so it's just loafing aloing. It was probably the most powerful car I've ever driven. There is a shop in New York that specialises in these cars and when my friend had it totally worked over by them, the bill was over $30,000.00. I have appraised several 6.9s for insurance purposes but have never driven one. Don't want one of those either but they do have Citroen-derived hydro-pneumatic suspension. If you are familair with the Citroen DS, you will see the similarites in the suspension with the hydraulic pump, accumulator and suspension spheres. 

So yes, I dodged a serious bullet, not buying that car. 

 

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Posted by BaltACD on Saturday, March 21, 2020 7:21 AM

54light15
So yes, I dodged a serious bullet, not buying that car.

A friend of mine, for a period of time, worked for a descendent of the Johonson & Johnson fortune.  They owned a Rolls-Royce, specific model of which I don't know, to be serviced the car had to be taken 300 miles to the nearest dealer.  The car would be trailered to the dealer and back as driving it would have put too many miles on the odometer.  Since the servicing would take an appreciable amount of time, the task of taking the car for service also included the costs of food and lodging for the person trailering the car to and fro, not to mention the normal payroll of that person.

Regarding the MB 'Grosser Pullman' - the German's have never seen a design that they didn't feel they could improve by making it more involved and complex.

As I said previously, If you have to ask the price, you can't afford it.

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