Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 23, 1994 TAG: 9401190249
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: ALLEN R. MYERSON THE NEW YORK TIMES
DATELINE: DALLAS LENGTH: Long
But even with its wheels planted firmly on the ground, Greyhound Lines Inc. is starting to act more like an airline.
The only nationwide bus company that links the smallest American towns and the largest cities, Greyhound is making some high-flying plans. It is rewarding frequent riders and issuing tickets in advance. It will guarantee seats and offer hotel tie-ins and its own credit card. To avoid accidents, its buses carry radar.
The ever-evolving world of transportation, which has seen one company after another go bankrupt since deregulation in the late 1970s, has come down to this: Airlines, with cheap fares and short hops, are starting to look like bus companies, while the biggest bus company is trying to be more like an airline.
And the goal at Greyhound, which emerged from its own bankruptcy in 1991, is to shape a bus system that the airlines will indeed seek to emulate.
In fact, says Frank J. Schmieder, Greyhound's gangly and affable chief executive, one airline (he will not say which) already has studied the way Greyhound maintains its buses.
To fulfill its own plans, Greyhound has swiped several dozen dispatchers, computer experts and others from the trucking industry and especially the airlines - American Airlines most of all, conveniently situated nearby in the Dallas area.
"They all remark that some of the systems we have are more sophisticated than the airlines'," Schmieder said in a conference room, as an aide - furiously clicking the controls at a lectern - brought forth full-color arrays of route maps and ridership calculations on a wall-sized screen.
So far American Airlines is inclined to turn Greyhound's employee raids into a boasting point.
"We're chagrined on the one hand but flattered on the other," said Timothy J. Doke, a spokesman for American. "We've always been a technology leader."
The airline defectors may be forgiven for wondering what they got themselves into at Greyhound, which has 2,600 stops, more than 12 times as many destinations as any airline.
Greyhound's own budget is as tight as those of its passengers. With average one-way fares of $33, Greyhound cannot afford the obsessive number-crunching that helps the airlines squeeze the last dollar from every seat.
Advertising? Other gimmicks? If the airline marketers can be as brassy as marching bands, the Greyhound squad can scarcely afford kazoos.
Worse still, Greyhound's efforts to give bus travel some airborne grace have sometimes run off the road, crumpling its earnings and stock price.
The automated toll-free information and reservation system that started in July was inundated with as many as 800,000 calls a day, more than 10 times its capacity.
Even when customers gave up on reaching anyone and trudged over to the terminals with their bags, they found long lines and people on both sides of the counters swearing at the sluggish computers.
Greyhound cut back the reservation service to serve only the Eastern half of the nation, although the West was hooked back up this month.
Investors, however, expected improvements at Greyhound to begin paying off this year. But with traffic held down by the snarled reservation system and a slack economy, the company's third-quarter earnings fell more than 10 percent, to $13.4 million.
Management has held out no better hopes for the results from last year's fourth-quarter, when Greyhound offered $10 fares, down from $23, between New York and Washington and several other cities to lure riders back and fend off cut-rate competitors.
Greyhound common stock, listed on the American Stock Exchange with the ticker symbol BUS, has traded at $12.25 to $12.50 a share.
Just last May, the company raised about $100 million by selling shares for $21.25.
Some Wall Street analysts have quit following the stock, but others remain confident that Greyhound can apply the right lessons from the airlines.
"Only recently have they had the financial wherewithal, the management wherewithal, to do these things," said Jan Lobe of Legg Mason, a Baltimore brokerage firm. "In the short run, there will be some problems."
At the mention of his stock price, Schmieder's familiar, slouching, welcome-aboard manner suddenly turns severe. "Wall Street wants performance," he said, sitting bolt upright. "They like to hear about technology, but they want earnings per share."
He recited a list of expenses - reservation system computers costing millions, accident-avoidance radar at $4,000 a bus - to argue that he is planning for the longer term. The radar warns of impending crashes in front or on the driver's blind right side, with warbling alarms and flashing yellow and red lights.
Greyhound executives admit that much of what they are doing is overdue. For years, the company had been preoccupied, going through a leveraged buyout, bankruptcy reorganization and years of labor turmoil that ended with a new contract with bus drivers last April.
Most Greyhound passengers are all too aware that they are bus people, still drawn more by the prices than by, say, the Easy Rider frequent rider program. A run from New York to Philadelphia several weeks ago was the province of the young, the foreign and the thrifty, some drawn by a special $10 fare discounted from the normal $14. Still, only 24 of 47 seats were filled, somewhat below Greyhound's usual load.
Wen-yue Shi, a young engineer, said that low fares made it possible for him to visit friends around the Northeast. He was in awe of Greyhound's system for consumers to get fares and schedules by phone.
"In China, we don't have such vast communications,' he said, explaining that learning when the bus comes there takes a trip to the station.
Chelsea Jackson, a freshman returning to Penn State, has flown round trip to State College, Pa., for $150. The 14-day advance bus fare of $37, half the full price, brought her reluctantly to Greyhound. She did not look forward to the 40-minute wait for the bus to State College from Philadelphia.
"Since they make people wait at the stops, they should clean them up," she said.
"It's filthy and disgusting, and it's always in the worst part of town."
In fact, Greyhound has been fixing up its stops. Philadelphia's had bright modern lighting and apparently fresh paint, but also wads of gum stuck to the floor and the usual rows of plastic seats with tiny, tinny coin-operated televisions attached.
A three-year bus drivers' strike that ended last May brought with it gunfire aimed at the buses, a federal ruling that the company had provoked the strike and a sharp increase in accidents caused by replacement drivers. Schmieder's style has been to consult with the drivers constantly, whether about the radar or automated scheduling.
Worker morale couldn't help but be better than under the previous managers, who departed to clear the way for the company's reorganization. Charles Peterson, the driver to Philadelphia, welcomes his passengers in tones so warm as to suggest that if he could drive and serve them snacks at the same time, he would.
He worked his way up from school buses and then charters. "I always wanted to drive a Greyhound bus," he said, adding that most drivers have become happier to be there.
"A few will tell you otherwise, but if you're not really satisfied, get another job."
The company has halved its driver staff, to 3,000, since 1990, although improved efficiency on fewer routes still allows for 80 percent as much passenger travel.
This month, Greyhound is beginning an automated scheduling system that will assign and notify by telephone the thousands of drivers whose schedules vary; the rest usually work the same routes. Computers will match drivers and schedules, using a program schooled in the work rules (no more than 10 hours driving in a day) of the Amalgamated Transit Union and in family values (try to get the drivers home each night).
Other innovations have yet to blossom. An alliance with Hospitality Franchise Systems, whose 3,700 hotels include Days Inns, Ramada Inns, Howard Johnsons and Super 8's, promises coordinated marketing and reservations. Putting Greyhound credit card and ticket machines at 7-Eleven stores is the sort of scheme Schmieder likes to mention, even as a press aide hushes him.
Greyhound has tried providing a cellular telephone or two for passengers aboard some New Jersey buses used by commuters. The trial was suspended in part because of brawls among stockbrokers grabbing for the phones. If Greyhound can get more phones at a quantity discount, the company will initially give them only to drivers to help them stay in touch.
Most Greyhound passengers are want to visit family or friends at an affordable price; their median family earnings are just $18,000, three-fifths the national level. So, whatever airline features Greyhound may offer, the only alternative for many of its riders will be staying home.
by CNB