Dying for Dollars

As the death-care industry booms and consolidates, Houston's Service Corporation International is leading the way

Transportation charges also vary. As it does the prep center, SCI operates one centralized livery, thereby increasing overall efficiency. Although SCI operates 14 funeral homes in the region, it has just 13 hearses. "We try to schedule funerals at 10, 11:30, 1:30 and 3," said fleet manager Tommy Tyson. By staggering the times, Tyson explained, he can use one hearse or limo in two different services on the same day. Tyson, who is in charge of scheduling the motor fleet and personnel for all of SCI's Houston funerals (they conducted 5,200 in the area last year), makes sure that limousines and hearses show up when and where they are supposed to. On a recent morning, Tyson's dark-suited drivers milled around a small television, drinking coffee and talking quietly as they waited for their next assignment.

But even though the hearses and limos come out of the same garage, are serviced by the same mechanic and may be driven by the same driver, consumers in different parts of town pay different prices. The charge for a hearse at SCI's Howard-Glendale Funeral Directors in east Houston is $250. At Memorial Oaks, it costs $285.

When prices are compared between SCI funeral homes in Austin and Houston or Dallas and Houston, the differences are even more striking. A hearse at Cook-Walden Funeral Home in Austin costs just $126. At SCI's Forest Park Westheimer Funeral Home in west Houston, it costs $275. The same service at SCI's Lamar & Smith Funeral Directors, a low-cost provider in central Dallas, costs just $135. (A recent advertisement in The Dallas Morning News for Lamar & Smith advised consumers, "It;s not a sin to price-shop funeral services." The company offers funeral arrangements, casket included, from $1,700.)

The pricing of caskets, too, makes little sense. At SCI's Austin operation, a solid mahogany casket described as "natural finish, urn-shaped, champagne-velvet interior, non-protective" costs $4,387. At SCI's Forest Park Lawndale on Lawndale Avenue, a casket described as "non-protective, mahogany wood, exterior finish natural mahogany, velvet interior" costs $7,854. At SCI's Forest Park Westheimer, it costs $6,997.

SCI communications director William Barrett defended the pricing policy simply by saying, "It would be foolish to say we're not out to make a profit."

Nothing in his plush 12th-floor office would indicate that Blair Waltrip's business involves funerals. Western paintings, waterfowl and wildlife scenes cover the walls. Books on executive management and training perch on the shelves. Aside from a large ashtray with the SCI logo, and the SCI lapel pin on his suit, you'd be hard-pressed to figure out what company he works for.

The son of SCI founder Robert L., Blair Waltrip said he always wanted to be in his father's business. "At six years old, I knew that's what I wanted to do," he said. "I never had any doubts." As a youngster, Waltrip played in the parking lot of Heights Funeral Home. Today, at age 39, he's the youngest member of SCI's board of directors and is the company's largest individual shareholder. At last week's price of $26 per share, his 860,000 shares were worth more than $22 million. The executive vice president in charge of operations, the young funeral baron wouldn't predict how big SCI could become.

"Rather than look at how big we can get, we try to manage our business," he said. "Rather than focus on big numbers, we focus on managing the business to the best of our ability in growing the company for the best interest of the shareholders. I never thought about how big SCI can get."

He paused and then continued. "Let's put it this way: Right now, we see a heck of a lot of opportunity. And really, we don't see any restrictions on the horizon."

But Waltrip grew testy when asked about the disparity in prices among SCI funeral homes. Asked why a mahogany casket in Austin costs $3,467 less than one in Houston, he replied: "Number one, I didn't see the unit you are referring to. We operate in a very decentralized manner. We don't dictate what prices should be in particular markets for particular services or merchandise. We leave it up to people in the cities to arrange their own pricing structure. And Houston and Austin are two different communities. And just because one of them charges more or less for a particular unit, it's probably based on local market conditions."

Waltrip said pricing decisions are made by the manager of each facility and then reviewed by regional managers. He also pointed out that SCI has huge overhead costs, including personnel and buildings: "We have the finest vehicles, the highest-caliber vehicles, that are available 24 hours a day, seven days a week. But we are not busy 24 hours a day, seven days a week. We provide a service to the consumer, and we believe we are competitive in the market we serve."

Citing surveys that SCI sends out to recent customers, Waltrip said: "We have an acceptance rate of 97 percent. So if the customers' communication to us is any barometer, which I think it is, we have an acceptance rate of over 97 percent."

There is no question that SCI has a well-trained staff. With a few exceptions (the funeral home in Austin wouldn't tell me the make and model number of the mahogany casket mentioned above), SCI staffers were highly professional and very willing to talk about procedures, prices and options.

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