When James Dunbar started his armored truck business in 1956, he had three goals: build up his fleet to eight trucks, fly in a Boeing 707 and drive a Cadillac.
He has long since met those goals, but the 62-year-old businessman continues to set new objectives. His Federal Armored Express Inc. is the fourth-largest armored truck company in America and growing fast.
Recently, the company acquired about 75 routes from the nation's third-largest armored carrier, Loomis Armored Inc.
"I want to be No. 2," Mr. Dunbar said, who at least for now does not aspire to overtake Brink's Inc., the largest armored truck company in the business with 1,300 cars in 43 states.
He still must surpass Loomis and Wells Fargo Armored Inc. before gaining that spot.
Each year, Federal Armored handles $1 trillion, transporting currency from Federal Reserve banks, picking up money from commercial outlets to deliver to banks, counting and sorting bills and coins and dispersing jewelry and precious metals from wholesalers to retailers.
Its clients include Giant Food, Safeway, Hecht's, McDonald's, Coca-Cola bottling plants, Amoco, Mercantile Bankshares, First National Bank of Maryland and General Motors.
The company's fleet has far surpassed Mr. Dunbar's goal of eight trucks, and now operates 500 armored vehicles and employs about 1,800 people in 60 locations. In addition to transporting valuables on the ground, the company also operates an air courier service and a center where it counts and packages coins and currency.
Aside from the Federal Armored businesses, Mr. Dunbar also owns Loughlin Security Agency, a uniformed guard and investigative service; Federal Security Systems, a residential and business security alarm service and E-Z Audit Bankpak, a supplier of heat-sealed, tamper-resistant security bags. But approximately 90 percent of his companies' revenues come from Federal Armored.
All of his businesses are run out of an unassuming building in an industrial park off Eastern Avenue in Dundalk. Altogether, Dunbar's companies employ 440 people in the Baltimore area.
"We're the best-kept secret around," said John H. Pratt Jr., Federal Armored's president and chief operating officer.
Mr. Dunbar's introduction to the armored car business came when he went to work for his father's firm. George Dunbar was one of the early pioneers in the armored truck business. He was working for a car dealership in Hartford, Conn., in 1923 when an armored truck broke down on its way to New York and stopped at the garage where George Dunbar was working. The owner was anxious to be rid of his burden and readily agreed when Mr. Dunbar offered to buy his truck.
George Dunbar had no intention of operating an armored car business, but only wanted to sell the truck to someone else, his son says. But after consulting with some local banks and the owner of the car dealership where he worked, the elder Mr. Dunbar and the dealership owner agreed to form a partnership )) and operate the armored truck service themselves. Their company was the first in New England.
Prohibition, however, spawned new competitors, as bootleggers and gangsters made transporting large sums of money more dangerous. Brink's began its armored service in Chicago in 1920. Loomis started on the West Coast in 1925.
"There were lots of Mom and Pop companies. If they had a truck, that was their company," James Dunbar said.
Even so, the armored truck industry operated in relative obscurity until the great Boston robbery in 1950 when a gang stole $1.5 million from a Brink's truck. The money was never recovered.
About the same time, Mr. Dunbar finished college and went to work for his father's company, starting as a truck washer and a guard. But after five years, he and his father had a disagreement and he left the company.
"I'm not sure whether I was fired or whether I quit," Mr. Dunbar said.
In any case, he left the business, and looked for the largest city served by only a single armored car carrier. That city was Baltimore. Although he'd never been here before, he moved in with the goal of cracking Brink's monopoly in the city.
He started Federal Armored Express in 1956 with a single truck. In the mornings, he put on a suit and went to stores and banks to drum up business. In the afternoons, he would put on a uniform and drive the truck to pick up money from customers.
"I found out in about 24 hours that my father was a lot smarter than I'd given him credit for," Mr. Dunbar said.
The company grew slowly until deregulation of the trucking industry began in the 1970s and Federal Armored was able to compete for contracts in other states.
In the 1970s, Federal Armored expanded into Virginia, Pennsylvania and Ohio, opening offices even before there were commitments from customers. In 1976, Federal Armored won a contract to transport money from the Federal Reserve Bank in Richmond to member banks throughout the Federal Reserve District.
Now Federal Armored transports 60 percent of the country's money that moves through the Federal Reserve system. Brink's carries the remaining Federal Reserve money.
Today, the company again is expanding, having bought Loomis' air service six months ago and Loomis' routes in Maryland, Washington, Pennsylvania, Virginia and West Virginia more recently.
Federal Armored has been one of the fastest growing of the approximately 100 armored car companies in the country. In the last two years, Federal Armored has opened 22 branches in cities including San Diego, San Francisco, Miami, Minneapolis, Tulsa, Dallas and San Antonio.
Mr. Dunbar projects that, by the end of this year, his fleet will have grown 20 percent to 600 trucks.
As a private company, (Mr. Dunbar is the sole stockholder), Federal Armored Express is more flexible than its larger competitors, explained its president, John Pratt.
Because the company pays no dividends and is accountable only to Mr. Dunbar, it has money to reinvest in the company, said Fred A. Aus, executive vice president.
The company's recent expansions all have been paid for with company profits, although Federal Armored usually borrows ,X money to buy new trucks, Mr. Aus explained.
Although Federal Armored does not divulge its revenues, Mr. Aus estimates that 70 percent of the company's revenues come from daily pickups and deliveries.
Its counting and sorting operation, which Federal Armored provides for banks and large retailers, accounts for 5 to 10 percent of revenues. That area is growing as banks increasingly contract out their money-counting and sorting duties.
Other revenues are generated by a 42-city air courier service, which the company acquired in July from Loomis. This intercity transportation of jewelry and securities prompted Federal Armored to open 12 more branches, and is one of the main areas of growth, Mr. Aus said.
Although Federal Armored competes with larger armored truck companies, it has managed to capture some of the biggest customers in the country.
In Maryland, it has served Giant Food Inc. for 10 years, transporting cash to the store and picking it up for bank.
"What we look for is service," said David B. Sykes, a senior vice president at Giant. "We expect them to get into our stores on a regular basis, validate the money, get the money to work in on time. They have been very successful at it."
Mr. Dunbar said he doesn't have a particular business strategy. Many of the company's decisions are made informally as he and his officers gather to discuss their ideas and outline opportunities they see.
"When decisions have to be made, meetings are spontaneous," Mr. Pratt said.
Mr. Dunbar said he tries to use the best and latest equipment, whether it's in the trucks he buys, the computer system he uses or the cameras that constantly watch the workers and all visitors.
But even with the best equipment and the best personnel, the key to success in the business lies in the insurance. Federal Armored is insured for up to $500 million per theft or other loss, maintains a low deductible and no warranties exempting coverage except in case of nuclear war.
"The insurance business regulates us. If we don't have a good track record, they don't have to insure us," Mr. Dunbar said.
Insurance also accounts for one of the business' largest expenses, and the cost is expected to increase 20 percent this year in the face of premium raises being initiated by Lloyd's of London.
Despite all the predictions about electronic banking and a cashless society, Mr. Dunbar and his team are not worried. They figure there will always be valuables such as jewels, securities, food stamps and precious metals to transport. Whenever they are moved, an armored car company will be needed.
They also are prepared to change with the times. As banks consolidate and thrifts close, Federal Armored expects money deliveries to banks to make up a smaller portion of the business.
Today, delivery routes to banks account for about one-quarter of all Federal Armored routes.
Eventually, the company expects the trucking business to decrease in importance as its air courier service and money-counting and sorting operations grow.
"In five years, the trucking service may be only 50 percent of what we do," Mr. Dunbar said.
Mr. Aus is the designated successor to the company, but Mr. Dunbar said he has no plans to retire. "This is what I love," he said. "I don't play golf. I open branches and buy trucks."
And, oh yes, he also drives a Cadillac.