Bring on the Bunny

A leaner Roberts Hawaii sprints forward

August, 2003

Roberts Hawaii Inc. has been a two-time cover subject for Hawaii Business. In 1976, founder Robert Iwamoto Sr. posed in front of an eponymously signed motor coach. His son, Robert Iwamoto Jr., did the same in 1997, except the bus said “Gray Line.” Robert Jr. had just signed with Gray Line Worldwide Inc., to be its exclusive representative in Hawaii. Today, Iwamoto Jr.’s son, Troy, is the president and chief operating officer, while the semiretired Robert Jr. remains chairman of the board.

The Hawaii-based company, with multiple subsidiaries, focusing mainly on the transportation and tourism industries, has had a storied past. From Iwamoto Sr.’s founding of the company in 1941 as a one-man taxi service in Hanapepe, Kauai, to Junior’s subsequent multimillion dollar investment in Mahalo Airlines, which eventually went bust, to the slightly-pared-back-from-its-hey-day conglomerate of bus and catamaran operations, to a magic show in Waikiki and even a catering company. Troy Iwamoto estimates that Roberts holds about 25 percent of the bus transportation market in Hawaii. Half of its fleet of 1,000 vehicles statewide is in the tourism business, the other half are school buses.

Iwamoto says he began restructuring and divesting business units months before Sept. 11. Says Iwamoto, “I like to describe hypothetically: We got rid of $4 million worth of revenue, but we got rid of $5 million worth of expenses. And some of the businesses were Voyager Submarines and Hawaiian Ocean Thrills or HOTs.”

He says Sept. 11 accelerated the plan and Roberts ended up doing in four months what had been expected to take two years. Still, Roberts experienced an 8.1 percent drop in gross sales, from $100.4 million in 2001 to $92.3 million in 2002, and Iwamoto expects that to drop to around $89 million in 2003.

He says while Roberts planned for Operation Iraqi Freedom to last of a couple of months, SARS has been another story. Iwamoto says, “This SARS thing has really thrown a twist to it, because it’s really impacted the Japanese travelers as well as the travelers from China and the Far East region. So, what initially we thought would be a hiccup has turned out to be something more longstanding.”

The 40-year-old Iwamoto was just 16 when he started working in the bus maintenance department of the family business. After nine years there, he graduated from the University of Hawaii’s business school and went to work managing operations on the Big Island.

“I wanted to work for the company, but it was important to me that my father give me something where there was a lot of development and growth potential. I needed to do something worthwhile, bring value. I didn’t want to be the boss’ son and sit over there, look good, show up for work and get paid. I wanted to do something with myself – make a mark,” he says.

In 1998, he moved back to Honolulu and was named president about a year later. Today, the leaner Roberts is looking to diversify and spread the risk outside of Hawaii and is eyeing some possible transportation operations on the West Coast. There is also a related business, Roberts Hawaii Technology Group Inc., recently approved as a Qualified High Technology Business (QHTB), which is developing a route optimizer software package to be marketed to other transportation companies. It’s all part of the Japanese philosophy ofkaizen, or continuous improvement, key to the family company’s work ethos.

Explains Iwamoto: “Always trying to do new things. Trying to invest in certain areas or markets. We’re definitely a company or family that has a propensity for risk. We’re willing to take risks and spend those sums of money.”

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Kelli Abe Trifonovitch