One Scared Puppy

Why Dallas' Greyhound Lines is fighting for its life

But when Greyhound began thumbing its nose at the regional carriers while letting its own service slip into shoddiness and become inconvenient for passengers, the independents began casting about for their own base of power.

The result, ironically, is that the regional carriers Greyhound was undercutting are now banding together again, hoping to challenge the national monopoly.

"This year, we have 10 new companies that have joined," Johnston crows. "And we have two more applications in process."

Forty-one companies now belong to the Trailways group, he says, including a subsidiary of Greyhound of Canada, a former corporate sibling of the U.S. Greyhound Lines. The Dial Corporation kept the Canadian Greyhound company when it sold U.S. Greyhound in 1987.

Johnston predicts that 10 more companies will join the Trailways system next year, making it quite possible that Trailways itself will attempt to revive long-haul cross-country bus runs and lessen its dependence on Greyhound.

"Our objective is not to take Greyhound down," Johnston benevolently allows. "We think it's healthy to have competition in the bus industry."

The competitors, for now, are winning.
While Greyhound posts mammoth losses, most of the larger regional bus companies in the country are posting solid profits. Greyhound's ridership is down. Ridership of the independents is up.

According to the ICC's statistics for the third quarter of 1993--the most recent available--Greyhound revenues were down 6 percent while those of the nine largest regional carriers were up more than 4 percent.

Greyhound's losses for 1994 are expected to hit $100 million, compared with an almost $11 million profit in 1992, its first year out of bankruptcy.

If it wants to win back its dominance, critics say, Greyhound has to cease its arrogance and stop screwing up.

"In every business like this that is distressed or mismanaged, there is opportunity," says investor Connor "It's good, in the sense that there's a lot to fix. If you walked into a company like this and everything was working properly and you were losing money, then you're doomed.

"But here's a company that's losing money because it has been fouled up for quite some period of time. There's a lot of things that can be corrected."

Investors are betting on Lentzsch, and say there are already some positive signs that the new president will try to rebuild the system his predecessors gutted.

A few weeks ago, Jeff Thompson, publisher of the Russell Guide, says he heard from Greyhound management for the first time in over three years. "There has been some interest expressed in coming back into the guide," Thompson says. "I'm waiting to hear more."

As long as there are steps in the right directions, investor Street is buoyed by even smaller signs of progress.

"This is a really good business, the bus business," Street says. "And at least they're answering the phones now.

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