One Scared Puppy

Why Dallas' Greyhound Lines is fighting for its life

Labor strife did send Greyhound into bankruptcy protection in 1990, and signaled a tidal change in the company's philosophy.

Up until then, Greyhound boasted about having the highest-paid drivers in the country. "With the highest wages, the best working conditions, and everything else, they were [still] extremely profitable," says one former Greyhound executive. "It was a proud company. When I went to work for Greyhound one of the things they told me was, 'When the next Depression comes, you'll be glad you're here, because in the last Depression everybody would cash a Greyhound check.'"

But in the late 1980s, labor was on the run. Corporate managers across the country were weighing low profits against expensive labor contracts, and deciding that labor had to give.

Three times during the decade, Greyhound tried to suppress its unions and cut labor costs. In 1990, it finally succeeded, but at a dear price. The bitter strike by drivers and other workers threw the carrier into bankruptcy court and temporarily crippled the company.

When it emerged from protection in late 1991, the company promised to be lean and mean. It certainly fulfilled the latter.

For 75 years, the bible of the bus industry has been Russell's Official National Motor Coach Guide. It is a humble book, 300-plus newsprint pages of timetables bound in different colored pasteboard each month. Published by a company in Cedar Rapids, Iowa, the guide lists the schedules of every major--and most of the smaller--bus companies in the United States. It was used by 5,000 bus companies, ticket sellers, and travel agents to help passengers figure out their travel plans.

But in late 1991, Greyhound decided it would no longer provide its schedules to the Russell Guide. "It was a shock," says Jeff Thompson, president of the publishing company. "We got a phone call from their senior vice president of marketing, and we were informed that effective with the next issue they were pulling out."

Within the industry, Greyhound's move was heresy. Bus companies had always shared their schedules, and for reasons that benefited everyone.

A small bus company in Iowa, for instance, could use the book to feed its passengers into the Greyhound system smoothly. The small company made money. Greyhound made money. In business jargon, that's called a win-win situation.

Greyhound's withdrawal from the Russell Guide was a telling indicator of the company's new approach to its colleagues.

No more would it follow the longstanding traditions of cooperation that had been the hallmark of the business. Instead, Greyhound was going to build its own, free-standing computer reservation system. Customers who wanted to ride Greyhound would call Greyhound, not one of its potential competitors. The other companies were on their own.

Not only did Greyhound pull out of the monthly guide, Thompson says, but the company canceled contracts for printing up the bus schedules it had passed out to customers at terminals.

"There was no hard copy for customers to get their hands on," Thompson says. "They had the view that 'Hey, we're Greyhound, and we're going to do what's in our interests.' They certainly have the right to do that, but the mindset they were coming from was that they were going to go it alone."

After Greyhound's withdrawal, the Russell Guide's usefulness waned, and its circulation fell below 3,000, Thompson says. The bus industry, and its customers, were left without a central source for bus schedules.

Several regional carriers filed complaints with the ICC, asking the federal regulators to require some sort of common schedule format. After studying the issue, the ICC deferred to Greyhound's wishes. The commissioners opined that requiring a common scheduling system might hurt little carriers that couldn't afford to participate.

Scheduling secrecy was not Greyhound's only assault on industry traditions.
Until 1991, Greyhound, owner of the most bus terminals in the country, had leased space in many of its locations to other carriers. That way, bus lines could feed passengers back and forth with ease at common locations. It was another win-win, and Greyhound turned it into a lose-lose.

In Texas, Greyhound tried to force competing Valley Transit Company out of its bus terminals in Houston, San Antonio, and Corpus Christi, according to company vice president Bobby Ferris. Valley sued, and a judge granted an injunction allowing Valley to stay put while the two bus lines continue to fight over terminal access.

Greyhound's treatment of Peter Pan Bus Lines in Massachusetts was illustrative of the monopoly's new--and often foolish--approach to other bus companies.

Peter Pan, a regional company that is part of the Trailways system, had rented space from Greyhound for years at the Worcester terminal, says company chairman Peter Picknelly, Sr.

Under the leasing arrangement, common in the industry, Peter Pan paid Greyhound 14 percent of the money it made selling tickets at the terminal, or about $140,000 a year.

"In 1991, we get a letter from Greyhound saying effective two months from now the charge to use the terminal will be 19 percent," Picknelly says. "I sent back a letter telling them that unless they were kidding, we'd move out."

Greyhound wasn't kidding, and Picknelly did move his company out. Peter Pan slapped up a prefab building on the lot next door and started operating from there.

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