Greyhound gets rolling after long rough patch

The sprinting dog is getting back in racing form.

Nearly a decade after a bitter labor battle forced the company into bankruptcy, Dallas-based Greyhound Lines is readying a massive effort to modernize its terminals and overhaul the way it sells tickets.

The planned reinvestment represents the most visible sign yet that the nation's largest coast-to-coast bus company is beginning to capitalize on its first period of both prosperity and labor peace since a 38-month strike that began in March 1990.

Backed by new parent company Laidlaw and led by a chief executive intent on avoiding labor strife, Greyhound no longer need worry about whether it will stay afloat.

"The company's track record under its existing management team has been very favorable, and we expect the trend to continue," said Peter Rozenberg, an analyst at Warburg Dillon Read in Toronto.

If Greyhound succeeds at modernizing itself, the 18 million Americans who ride its nationwide transportation network each year will find traveling by bus easier and more pleasant. Today, many of Greyhound's passengers endure its crowded and aging bus stations because they don't want to drive or can't afford to fly.

"I hate riding Greyhound," said Raphael Santos, a retired military worker whose bus recently stopped at the downtown Dallas terminal en route to Chicago from Temple, Texas. "The food is OK. But the buses stop at every little town."

Throughout the '90s, Greyhound lacked the resources to revamp its bus terminals, never mind replace its antiquated ticketing system.

A company known for the slogan "Go Greyhound . . . and leave the driving to us" has only recently begun to heal from the wounds of a strike that threatened the company's future like no other event since the Great Depression.

About 5,900 Greyhound drivers walked off their jobs in March 1990 to protest what they considered inadequate pay and benefit increases. Despite the use of replacement drivers, Greyhound filed for Chapter 11 bankruptcy protection three months later.

The strike comprised everything from bus shootings and driver beatings to management changes, layoffs and lawsuits. Even after emerging from bankruptcy in October 1991 and settling the strike two years later, the company nearly went bankrupt a second time in late 1994 and early 1995.

Last year, however, Greyhound earned its first profit since 1993, the year the strike ended. This year, the company expects an increase in operating profit.

The nationwide bus network also has slowly and steadily rebuilt its passenger base by reducing ticket prices and adding routes previously dropped because of financial difficulties. About 18.3 million passengers rode Greyhound buses last year, the highest level since the company carried 22 million passengers in 1989, the year before the strike.

Most important, in September 1998, Greyhound peacefully reached a five-year labor contract with the Amalgamated Transit Union, which represents the company's nearly 5,000 bus drivers and mechanics, ensuring labor harmony until Jan. 31, 2004.

To reach a new contract, both sides engaged in so-called interest-based negotiations, which attempt to avoid the adversarial roles that labor and management normally assume.

"I can't run the buses without the drivers," said Craig Lentzsch, 51, Greyhound's chief executive and president for the past five years. "The drivers can't run the buses without me. Like in the Cold War days, we each have our fingers on the button. If either of us pushes the button, the company goes away forever.

"We each understand that we need each other."

Yet, the new Greyhound doesn't have to look very far to see scars of its traumatic past. Howard "Hamp" Brown, a former Greyhound driver who went on strike in 1990 and was later fired, is suing Greyhound over more than $400,000 in back pay he says the company still owes him.

The Greyhound strike isn't over for Brown, who now works in San Francisco as a security guard at a local bank.

"It ruined a whole bunch of people's lives," he said. "I loved that job."

Yet plenty of signs exist that the bitter animosities created by the strike no longer pose an obstacle.

To please customers such as Santos, Greyhound plans to embark on a five-year program to remodel or build new bus stations. About a third of its 300 terminals will be replaced with new facilities that also offer local bus and Amtrak passenger train service.

Just as important, the company wants to simplify the way it sells bus tickets nationwide over the next two to three years.

That means automating the 20 percent of its more than 1,600 locations that still write tickets by hand. Also on the agenda: giving customers the ability to buy more tickets further in advance of their trips as well as online. The cross-country bus giant ultimately envisions a day when its tickets will be sold on every street corner in the country, from convenience stores to discount merchandise retailers.

Even as the company takes its first steps to modernize its bus network and move beyond the aftermath of its past labor problems, competition in the nation's intercity bus market is intensifying, analysts said.

Both Greyhound and Stagecoach Holdings, Britain's largest bus and railroad company, are looking to acquire regional bus operators in the United States. Stagecoach announced in July that it would pay $1.7 billion for Coach USA, a U.S. bus company.

The March sale of Greyhound to Laidlaw for $650 million gives the once-troubled bus company access to more of the capital it needs to make acquisitions, analysts and the company said. Burlington, Ontario-based Laidlaw is one of the largest operators of school and city buses in North America. It also owns Greyhound Lines of Canada.

Laidlaw CEO and President James Bullock said Greyhound's future growth lies in increasing the number of bus routes in Canada and Mexico, expanding its tourism and charter-bus business, and winning more customers for its package-delivery service.

So far, competition from Stagecoach and expanding discount airlines isn't hurting Greyhound. Passenger growth is rising from 4 percent to 6 percent a year as the U.S. population sees explosive growth in the number of senior citizens and Latino and black residents, who form the bulk of Greyhound's customers, Lentzsch said.

"Our core market is growing," he said. "The highways are in disrepair. The airplanes are jammed. The train doesn't run on time."