Greyhound to Buy Routes, Assets of Trailways Corp.

Greyhound Lines Inc., the nation’s largest interstate bus company, announced Friday that it will buy the bus routes and other assets of its last remaining nationwide competitor, the financially ailing Trailways Corp.

Fred G. Currey, Greyhound’s new chief, whose GLI Holdings Inc. of Dallas on March 18 purchased the entire Greyhound bus system from Phoenix-based Greyhound Corp., said that he applied Friday for Interstate Commerce Commission approval of his acquisition of Trailways.

Under the agreement, Greyhound will take over the Trailways name and bus routes, 450 of its 1,200 buses, some terminals and maintenance bases and three subsidiaries for $80 million and other considerations, including an undisclosed but “considerable” equity interest in Greyhound. Both companies are based in Dallas and are privately held.

Currey expressed confidence that he will win ICC approval quickly and dismissed any suggestion that combining the nation’s two remaining coast-to-coast interstate bus companies will violate antitrust statutes.

To the objection that Greyhound will now operate without any competition, Currey said: “I say nonsense. Our strongest competition is the private automobile. Hundreds of small bus companies are out there. Amtrak is out there. The airlines and their discount fares are certainly out there.”

Although buses carried nearly 9% of inter-city passengers at their peak during World War II, the share has dwindled to just over 1%, he said.

Currey also pointed to his own track record since GLI Holdings bought Greyhound Corp.’s bus system for a reported $350 million. At the time, he immediately reduced fares on many lines by as much as 50% and announced plans to expand service to rural areas not reached by any commercial transportation.

He told reporters here Friday that he is planning to encourage, help or set up feeder services using vans, if necessary, to bring potential rural passengers to larger cities where Greyhound-Trailways service is available.

Losing Money

Trailways, he stressed, is a money-losing and shrinking system whose remaining services can best be salvaged by merging them into his company. Greyhound officials cited these ICC statistics:

--Trailways late last year eliminated most of its service in the northern half of the country and now offers service in only 29 states.

--Trailways has sought ICC approval, often grudgingly given, to eliminate routes in 23 states over the last few years.

--Since last summer, Trailways has dropped all operations in Connecticut, Iowa, Massachusetts, Michigan, Montana, Nebraska and Wyoming and cut service by more than half in Colorado, Nevada and West Virginia.

--From 1977 through last year, Trailways passengers fell from 15.6 million to 9.8 million; bus miles driven per year fell from 134 million to 89 million; the bus fleet declined from more than 1,800 to 1,200, and the company lost $8.8 million in 1985 and $14 million last year.

Recognition Widespread

Greyhound, after the merger, plans to continue to operate Trailways buses under the Trailways name because of its widespread recognition, especially across much of the South, Currey said. “You would see a terminal that would be both a Trailways and a Greyhound terminal,” he said.

Trailways was projected to have revenues of about $150 million this year, but the combined company, which would operate in every state except Alaska and Hawaii, is projected to earn $800 million in 1987, Currey said.

He said that he intends to consult directly with union representatives of the 2,200 Trailways employees who will be affected by the merger but gave no specifics other than to say that he intends to improve service on many of the Trailways routes Greyhound will take over.

At the same time, however, Greyhound is certain to close dozens of terminals in cities that are at present served by both companies.

Last February, before the Dallas consortium headed by Currey took over Greyhound’s bus business, Currey’s representatives worked out a three-year employment contract with union representatives of 6,000 Greyhound employees. On Friday, Currey said that Greyhound employees now number 10,000.

Subsidiaries Listed

In addition to the Trailways routes, bus terminals and garages, Greyhound will take over Trailways’ bus manufacturing group, Eagle International Inc.; a small bus manufacturing plant, employing about 300, in Brownsville, Tex.; Trailways Food Services Inc., which operates restaurants in Trailways terminals, and Trailways Commuter Transit Inc., a subsidiary that operates about 300 commuter and transit buses in Texas.

Currey separately operates a subsidiary, BusLease Inc., which leases about 1,100 buses to independent operators nationwide, including nearly 500 in Greyhound’s fleet of 2,800 buses.

The purchase involves only Trailways Corp. and does not affect dozens of local or regional bus companies that have used the Trailways name but are not part of the Dallas-based corporation.

Greyhound, which now will be the nation’s only coast-to-coast operator of inter-city buses, is the result of an amalgamation of a number of small bus lines around the country. They merged, over the years, much the way that U.S. airlines have been consolidating in recent years.

Greyhound had its beginnings in 1913, when a young Swedish immigrant named Carl Eric Wickman quit his job as a drill operator in the open pit mines near Hibbing, Minn., and bought the local dealership for Hupmobile autos and Goodyear tires.

First Inter-City Bus

The pride of his inventory was an elegant, sleek Hupmobile. But the car was too expensive for his customers and did not sell. Wickman finally took $800 of his own savings, bought the Hupmobile himself and turned it into the nation’s first inter-city bus.

Each day, it operated over the 10 miles of rough road between Hibbing and the neighboring town of Alice, carrying miners to and from work.

“For 15 cents one way, or 25 cents round trip,” a history of the bus company says, “hard-working men, who knew few luxuries, could lean back, close their eyes and feel like chauffeured millionaires.”

Other tiny bus lines in California, Wisconsin, Georgia and Florida came together by 1925 and later adopted the Greyhound name and the running dog symbol.

COMPARING TRAVEL COSTS AND TIMES

Travel time in hours and minutes

BUS TRAIN PLANE Los Angeles to San Francisco $39.00/8:30 $64.00/8:40 $122.00/1:05 Los Angeles to New York $129.00/69:00 $350.00/71:50 $537.00/5:09 Orange County to Phoenix $22.95/8:45 $82.75/19:39 $79.00/1:00 Chicago to Houston $85.00/30:00 $199.00/16:10 $324.00/2:20

Orange County departure from Anaheim for bus and train, John Wayne Airport for plane.

All fares are one-way; air fares are regular economy.

Source: Los Angeles Times Travel Department; Greyhound Lines Inc.