Greyhound: A Strike's Bitter Turn
The images are all quite familiar. Greyhound Bus Lines Inc., the nation's last major intercity bus company and under new management in recent years, is unable to reach an agreement on a contract with its 6,300 unionized drivers.
The drivers go on strike, shutting down most of the system and throwing up picket lines. The walkout is quickly marred by a series of violent attacks on buses and drivers who are still working. A striker is run over by a bus driven by a replacement worker. Company officials harden, refusing to negotiate while the violence continues, and begin to steadily rebuild the system using newly hired drivers.
The strike by Greyhound's Amalgamated Transit Union drivers that began March 2 is a classic example of the changes that have flowed from the deregulation of the nation's transportation system in the 1980s.
As federal regulations on fares and routes were lifted, competition from new nonunion companies intensified, forcing the largely unionized airlines, bus lines, trucking companies and railroads to become more efficient.
That required new, more innovative approaches to management and big cuts in operating expenses. Managements were determined to reduce labor costs to levels in line with those of nonunion competitors. The higher profits rung up by companies that succeeded in lowering labor costs made corporate managers eager for more cost reductions. Labor leaders had to either cooperate more with management in an effort to save the most possible jobs, or take on management in harsh confrontations that seldom seemed to help either side.
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The seven-week Greyhound dispute has become one of the most bitter of the confrontations. The stances taken from the start by the two sides have hardened like two distant ridges. A huge chasm separates the views of the company and of the ATU on what the dispute means.
For instance, ATU officials say they want to talk about what the union says are its good-faith, modest proposals for pay increases of 4 percent to 5 percent a year. But the company insists that it will not bargain until a week has passed with no violence against its buses, passengers or working employees.
Using newly hired replacement drivers and a few drivers who have crossed picket lines, the company is operating 65 percent to 70 percent of the service it did before the walkout, Greyhound executives said last week.
Although the union is skeptical about Greyhound's financial condition and about the company's claims that passengers are coming back, company officials say they are providing almost as much service as they hoped to be doing by now.
"Very rapidly, while there is a strike still going on, it is becoming irrelevant to consumers and to the working employees of Greyhound," chairman Fred G. Currey said last week. "It's simply a matter of time until we put full service back on."
More important, he said, the drivers who are working have gotten more productive than drivers were before the strike because Greyhound is using new work rules that give the company more flexibility in scheduling drivers. The result, company officials said, is that the company is breaking even now, even after paying interest on its debt.
The ATU says that is not true. The strike has depressed business so much, ''it's bringing the company very quickly to the brink of bankruptcy," said Nick Nichols, ATU spokesman.
Greyhound spokesman George Gravley replied to Nichols' assertion with one word: "Nonsense."
The company executives acknowledge that the strike was costly early on, forcing it to add $25 million to the $350 million in debt that Currey and other investors took on in 1987 when they bought the then-unprofitable bus line from Greyhound Corp. of Phoenix. (The old owner has since changed its name to Greyhound Dial Corp., its main business now making soap and other consumer products.)
On many routes, such as between Philadelphia and Atlantic City and between Philadelphia and New York, Greyhound is being hurt because it has not offered any significant amount of service since the strike started. Much of the business it had enjoyed on those routes has been grabbed by other bus companies that expanded. Some of those competitors may keep up that service even if the Greyhound strike ends.
Greyhound disclosed in a filing in late March with the Securities and Exchange Commission that a prolonged strike would seriously impair its finances.
But Gravley, the spokesman, said the disclosures in the report to the SEC amounted to routine warnings about the risk of investing in a company that is being struck. As Currey indicated, the restructuring of routes and drivers' schedules, plus the money saved by operating fewer buses and fewer garages during the strike, has enabled the company to break even, Gravley said.
Currey said he had not wavered in his belief that the intercity bus business has a good future. The previous owners of Greyhound could not adjust to the new era of transportation deregulation and gave up, but he has not, he said.
There is a market for economical intercity service, if Greyhound can keep fares reasonably low by bringing labor costs in line with other bus companies' costs, Currey said. By innovative pricing, marketing and better use of its assets, Greyhound over the last two years had reversed a long downward trend, boosting ridership until the economy slowed down this winter, he said.
"Although we turned the traffic trends around, the (driver) workforce mind-set didn't turn around," he said. "They thought they could achieve something through intimidation and violence. What they are asking for (in wage increases) . . . is not available in the bus marketplace. What other (bus drivers) make is relevant. Whether the company makes money is relevant."
There is no doubt that the violent incidents, most of them involving shooting at buses in the first month of the strike, have hardened the company's position and hurt the drivers' public image.
Nichols said that ATU did not condone or encourage violence. "We'll do what we can to stop it," he said.
ATU officials note that although striking drivers have been arrested in connection with some shooting incidents, none has been convicted.
Nichols said Greyhound management was using "the violence issue as a smoke screen to refuse to return to the bargaining table."
The union considers it unfair to "put the entire bargaining process into the hands of any crazy who wants to pick up a phone and make a bomb threat," he said.
The ATU says the strike is hurting Greyhound. The company is running fewer buses than it had projected for this point, the ATU says. In addition, over the Easter weekend there was almost no need anywhere on Greyhound's system for extra buses, Nichols said. Running two or three extra buses on many routes is common on most holidays, he said.
"We believe the company has been shocked by the effectiveness of the strike," he said. "The company said it would turn the corner on the Easter weekend, but we think it was a disaster."
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