Greyhound to Divide Bus Line into Regional Companies
PHOENIX, Ariz. (AP) _ Greyhound Corp., parent of the country’s largest bus line, today announced plans to divide it into four regional carriers and let independent agents manage all the company’s terminals, part of a strategy aimed at competing more effectively against low-fare airlines.
Chairman John Teets called the plan ″revolutionary″ and said it would go into effect May 11.
Teets said Greyhound Lines President Frederick Dunikoski has been named chief executive officer of the company, and Frank Nageotte will continue as chairman. Four vice presidents will head the regional carriers, based in New York, Chicago, Atlanta and San Francisco, the company said.
All Greyhound’s 127 company-run terminals will be converted to commission agencies, the company said, but it did not disclose whether the terminals would be leased or sold to the commission agents.
The reorganization and terminal conversions are the latest moves by the Phoenix-based company to change its 72-year-old bus bus line from a coast-to- coast, intercity carrier into a short-hop service, stressing markets not served by airlines. Greyhound is the country’s largest bus company, with about 3,100 vehicles.
″If, in fact, we believe that our business is regional and no longer national in scope, it makes sense then to break up Greyhound Lines into its marketing areas,″ Teets said. ″Wherever you go in the United States today, you have discount airlines chewing at the market. All our areas are under assault.″
By creating regional companies with separate profit and loss sheets, Greyhound will be able to determine ″where those most difficult markets are and what must be done in that region,″ Teets added.
The plan will not involve additional layoffs at Greyhound Lines headquarters, where about 400 jobs were eliminated last year, Teets said.
Greyhound Lines has seen its passenger count drop sharply, to about 33 million last year from 63 million in the 1970s, company officials said.
Currently, Greyhound has a national contract with its union employees, and the reorganization would appear to signal a desire to negotiate separate regional contracts.
″It certainly sets the blueprint for something like that to happen,″ Teets said. ″We would think it would be a good move to be able to negotiate separately with each region with its own regional problems.″
He said the issue has not yet been discussed with the union.
James Cushing-Murray, president of Amalgamated Transit Union Local No. 1222 in Los Angeles, one of the largest Greyhound locals, said he would welcome regional negotiations.
″With deregulation, you can’t expect to have a national contract,″ he said. ″With different costs of living, different operating conditions and different levels of competition, you have to be able to adjust.″
The four regional companies will be Eastern Greyhound Lines in New York, Central Greyhound in Chicago, Southern Greyhound in Atlanta and Western Greyhound in San Francisco, Teets said.