New Departures For Greyhound The Firm Is Not A Dog, Chairman Insists
HARRISBURG — Fred G. Currey was exactly where he loved to be.
As chairman and chief executive of Greyhound Lines Inc., Currey spent three hours one day last week darting around Harrisburg's modern bus terminal, asking for the help of employees and passengers alike in running his company.
By midafternoon, he had flown to Binghamton, N.Y., to do more of the same.
Currey is a man with a mission, an evangelist for the right of Americans to travel economically. And to do it on clean, comfortable, long-distance buses
from bright, attractive stations.
He likes to mix with his customers and employees as often as possible. For instance, he has taken a Greyhound bus from Washington to New York to check on the quality of service and to talk to passengers.
Currey's energetic but folksy style seems to be working. Since he took charge of the venerable, money-losing Greyhound in 1987, the company no longer appears to be in danger of running off the road and crashing.
There are still skeptics who wonder whether Currey and the group of Dallas investors who bought the bus system from Greyhound Corp. can climb out of debt fast enough to allow the company to prosper.
The investors spent $375 million for the Greyhound system and an additional $80 million later in 1987 to buy Trailways Inc., a rival intercity bus system that also was losing money.
Despite the difficulties, Currey has predicted that for the first year since 1987, Greyhound will make a profit in 1989. That would compare with a $17 million loss last year.
At the heart of the financial improvement has been an effort to reverse a long and steady decline in the miles traveled by Greyhound passengers. Greyound has done this mostly by cutting many fares, offering discounts at certain times just as airlines do, and sprucing up buses and stations, Currey said. Doing only one of those things, he said, wouldn't have been enough.
"There is no demand for low-cost, low-quality service in this country," he said last week in the waiting room of the Harrisburg station that Greyhound shares with other bus lines and Amtrak.
Most recently, Greyhound's new management also has stemmed losses in its package-express service and is aggressively selling same-day delivery service to points within 300 miles of key hub cities, including Philadelphia.
Thanks also to higher air fares, business has boomed, especially this year. Now the company often has a problem in common with the airlines and Amtrak: It runs out of seats.
"There's been a great deal of stress this summer on the system," said Currey.
"We have a different kind of business problem today than we did in 1987," he said. "At peak periods today, we don't have the capacity. That puts stress on the company. But it's not as bad as the problem we had two years ago."
Indeed, Harrisburg employees complained that the bus station often was so crowded that it probably was discouraging business. Greyhound owns a much larger station built in 1983 a few blocks away, but that facility is now shuttered and for sale.
The company doesn't use it because it costs twice as much to operate as the rent the company pays to Capitol Trailways, the leaseholder of the space Greyhound shares on the ground floor of the Amtrak station, company executives said.
Giving up its newer Harrisburg station to share space in a multimodal transportation center is part of what Greyhound's new owners believe had to be done to save the company.
Greyhound, which had been growing sluggishly since the 1960s, began a downward spiral in 1980 when deregulation cut the cost of air travel and began to divert business off bus lines. Its parent, Greyhound Corp., by then had become widely diversified and seemed to have lost interest in running a bus line. And relations with its 7,000 unionized employees had become downright hostile.
From 10.9 billion passenger miles in 1979, combined mileage for Greyhound and Trailways bottomed out at 6.1 billion miles in 1986. The total climbed back to 6.8 billion passenger miles in 1988, and Greyhound projects almost 7.7 billion miles this year. The total number of passengers was up 15 percent in the first half of 1989 compared with a year ago.
Part of the increase in passenger miles has come from travelers who aren't the traditional long-distance bus passengers of past decades, Currey believes. Greyhound's down-at-the-heels stations, equipment and image had left it primarily with customers who traveled by bus because they had no choice but to do so.
If Greyhound service is clean and efficient and competes in timeliness with other modes of travel, business travelers and other middle-class people will use it, Currey said.
Between Mount Laurel and Manhattan, for instance, Greyhound has a regular service used by commuters and other commercial travelers.
"On a long-haul bus between New York and Los Angeles, you won't see anybody with a briefcase, unless it's me," Currey said. But between Mount Laurel and Manhattan, Greyhound "is the fastest way," he said. "The people on those buses can afford to drive, fly or take the train."
Likewise, the company runs spiffy new buses between Chicago's O'Hare International Airport and the Milwaukee area. The craft are equipped with credit-card telephone service, worktables and good overhead reading lights. The buses are highly popular with business travelers tired of fighting traffic to reach O'Hare, he said.
Greyhound also is starting to pick off a bigger slice of the $18 billion-a- year small-package express business, where it had previously lost money.
In recent months, the company has hired a new corps of package-service managers from such competitors as United Parcel Service, Federal Express and Emery to breathe new life into the service.
Now Greyhound is setting up package-express hubs in 18 cities, including Philadelphia and Harrisburg. And in sales blitzes in recent weeks, it has begun promoting same-day small-package delivery to nearby cities.
Not only is Greyhound's same-day service much faster than the competition, it is much cheaper, officials said. The company offers pickup and delivery service for its regular accounts, just as its competitors do.
To get a one-pound package delivered by Greyhound in a couple of hours from Philadelphia to Manhattan, for example, would cost $10.20 if the customer took it to the bus station and had it picked up in New York.
To get a package picked up and delivered by Greyhound would cost $38 to $40 for the same-day service, compared with $125 to $175 for most courier services, according to Bob Brown, a former UPS manager and now Greyhound's director of package express for the Philadelphia region.
Among competitors, UPS offers next-day delivery service to New York that costs slightly less than Greyhound's same-day service, but other companies' next-day service is about $12 more than Greyhound's same-day service, Brown said.
"Our business is starting to take a positive turn," he said. "We're letting people know Greyhound is in the package-express business and we can do it very cheaply."
Among the other major challenges Currey still faces in turning around Greyhound is convincing many of his unionized employees, led by 6,000 drivers, that his efforts to make them more productive are in their best interest.
The company faced massive resistance two years ago when a new contract with drivers required longer hours for what could have been less pay if productivity didn't improve. The Amalgamated Transit Union (ATU), representing the drivers, has promised a tough new round of negotiations when the current contract expires March 1.
But the biggest question to some union leaders is whether Currey can really transform a hidebound company that has fallen woefully behind in many areas
because so little has been put into it over the years.
Although Greyhound replaced about 10 percent of its nearly 4,000-bus fleet in the first 18 months of new ownership, it has not bought any more new buses this year, said Jim Cushing-Murray, president of ATU Local 1222 in Los Angeles.
The company also is years behind the trucking industry in communications equipment that allows it to know where its buses are at all times, Cushing- Murray said. If a bus breaks down, a driver must find a pay phone to report it, he said.
"It's still much like it was in the 1950s," he said.
Perhaps most of all, as likable as Currey and some other new senior executives are, much of Greyhound's middle management remains unimaginative and unreceptive to new ideas and is not customer-oriented, Cushing-Murray said.
"I like what Fred Currey has to say," he said. "I'm generally impressed with his grasp of the business. But then he leaves town and it's back to the normal old Greyhound. I don't think it can really be changed without a wholesale replacement of this management."
GREYHOUND AND TRAILWAYS LINES
In thousands
COMBINED
YEAR PASSENGER MILES
1979 10,937,541
1980 11,169,856
1981 10,349,023
1982 10,342,013
1983 8,999,997
1984 8,268,824
1985 7,248,267
1986 6,088,862
1987* 6,249,517
1988 6,812,204
1989 (est.) 7,656,637
* Greyhound acquired Trailways
TRAVEL INDUSTRY GROWTH IN PASSENGER MILES
JANUARY-MARCH GREYHOUND AUTO AMTRAK AIRLINE
1989 +20.5% +2.7% +10.1% -0.4%
1988 +9.0 +4.9 +6.1 +1.2
1987 +2.6 +4.8 +7.2 +7.9
1986 -16.0 +6.0 +3.8 +13.2
1985 -12.0 +3.3 +4.3 +10.6
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