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Eagle Bus Enjoying Smooth Ride Since Takeover By Greyhound

January 23, 1989

BROWNSVILLE, Texas (AP) _ The nation’s No. 2 maker of big highway buses, rapidly weakening a few years ago, has recharged and now enjoys orders from clients that range from mass transit operators to touring pop-music stars.

Eagle Bus Manufacturing Inc. began its smooth financial ride when it became a subsidiary of Greyhound Lines Inc., the company that carries the most people between U.S. cities by bus.

″We actually shut this place down three times because of lack of orders in 1987,″ said Vern Tull, executive vice president and head of sales for Brownsville-based Eagle.

Eagle’s revival came four months after an investor group headed by Dallas entrepreneur Fred Currey in March 1987 bought operating assets of Greyhound Lines Inc. from its parent company, the Phoenix, Ariz.-based Greyhound Corp.

In July 1987, Currey’s group acquired selected assets of competitor Trailways Lines Inc., including Trailways’ Brownsville-based bus-manufacturing subsidiary, Eagle International Inc.

Eagle had traveled a downward curve with its sluggish Trailways parent for years. Potential Eagle bus buyers shunned a product that appeared to verge on demise, said George Gravley, Greyhound Lines spokesman in Dallas.

″Trailways was the main user of the Eagle bus, so the feeling was that if Trailways were to go out of business, then there would be no Eagle bus,″ Gravley said. ″The day that we bought it, it became a viable bus manufacturer. Potential customers had confidence that it was going to be around.″

With Greyhound Lines’ backing, Eagle’s business multiplied from 75 buses produced in 1987 to 300 in 1988, a 400 percent increase, Tull said. Eagle’s sales jumped from $20 million in 1987 to $70 million for 1988, he said, with the work force tripling to about 550.

While it may seem only natural that a bus maker would do well if owned by a resurgent passenger bus carrier - a built-in customer - company officials point out that only 50 of the Eagles produced in 1988 went to the parent company.

Greyhound Lines remains under contract to buy buses from its former parent company, The Greyhound Corp., which remains its largest competitor in the bus manufacturing business. The Greyhound Corp.’s subsidiaries produce two-thirds of the intercity buses in North America.

While Greyhound Lines bought 50 Eagles in 1988, it purchased 151 buses from Motor Coach Industries Inc., a subsidiary of the Phoenix-based competition, which still retains a 22.5 percent interest in Greyhound Lines.

Under the 1987 deal in which Currey, former Trailways chief executive officer, and other investors formed the new Greyhound Lines in Dallas, the Currey group is obligated to continue buying buses from the old parent company.

Motor Coach buses will remain the mainstay of the Greyhound Lines fleet, which totaled 3,904 at the end of the year, Gravley said.

The only Eagles in the Greyhound Lines fleet are the 50 new ones the Currey group bought and about 450 acquired in the Trailways deal.

Eagle’s business plan projects th company making 400 buses in 1989, with no orders yet from the parent company.

Still, Tull said, the 50-bus order from Greyhound Lines was Eagle’s most important order.

″It put out a notice that he (Currey) believes in Eagle and that they intend to support Eagle, and it really put a breath of life into this company,″ Tull said.

Eagle was the basic Trailways bus often ridiculed by Greyhound drivers, but quality-control problems have disappeared with the new ownership, Tull said.

Major new orders at Eagle Bus since July 1987 include: 99 for the Houston Metropolitan Transit Authority, 20 shipped to Egypt and 119 for New Jersey Transit.

But Eagle president John Blondek said the small orders will keep the company going. Blondek’s aggressive sales approach and frequent contacts with customers have won praise since he joined Eagle late in 1987.

″Our business will thrive only if we tend the store with the really important orders, and that’s the onesies and twosies,″ said Blondek.

The Eagles come in three sizes: 35 feet with 41 seats, 40 feet with 47 seats and 45 feet with 57 seats. Average cost is $195,000.

Many entertainers have ordered custom Eagle coaches for touring, including Willie Nelson, Randy Travis and the Pointer Sisters, Tull said, because the suspension makes it easy to sleep on the road.

″You’re not a star unless you have a gold record and an Eagle,″ he said.

Greyhound Lines’ attention to the market ″has caused a small revival in the business of hauling people from point to point by bus,″ Tull said. ″So that’s really helped us a lot. Our whole customer base is on the upswing.″

Greyhound, Trailways and bus manufacturers languished earlier in the decade from a combination of upstart competition that accompanied deregulation of the industry, escalating insurance costs, cheaper airfares and dropping oil prices that made car travel cheaper.

Miami-based travel industry consultant Jim Cammisa said the hard times for the passenger bus industry appear over, partly due to the new Greyhound Lines management and higher airfares.

End adv for Monday Jan. 23

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