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Greyhound Agrees to Buy Ailing Trailways Bus Lines : Takeover Would Leave U.S. With 1 National Firm

June 19, 1987|Associated Press

WASHINGTON — Greyhound Lines Inc. today announced an $80-million deal to take over financially ailing Trailways Corp. that, if approved by the government, will leave the nation with only one national intercity bus company.

Greyhound Chairman Fred Currey said Greyhound will guarantee continued bus service to the cities and towns served exclusively by Trailways.

He said the precarious financial position of Trailways, a privately held company, had endangered service to those cities and towns. Trailways, a smaller line than Greyhound, predominantly serves the South and East Coast as far north as New York.

"Without intervention, the collapse of Trailways is imminent," Currey said in announcing the agreement.

Disruption of Service

"If that happens, public transportation will be disrupted in parts of 17 states where Trailways has the only bus service to some communities, and several thousand people will be out of work," he said.

The sale is subject to approval by the Interstate Commerce Commission.

Currey said there was no decision on what would happen to Trailways' 2,200 employees.

Under the agreement, Greyhound would pay $80 million to buy 450 of Trailways' 1,200 buses, some of its terminals and garages and undisclosed other assets, said Greyhound spokesman George Gravely.

Both companies are based in Dallas. Greyhound, with about 10,000 employees, serves the 48 contiguous states.

Revenues of $800 Million

Greyhound, after the purchase, would have projected revenues of around $800 million. Trailways' current revenues are about $150 million, said Currey, who headed Trailways Corp. from 1975 to 1979.

Greyhound itself was purchased by a group of Dallas investors, primarily Currey and two partners, only three months ago. The group paid more than $350 million for the 75-year-old bus line, which was then facing financial trouble.

The officials said that for the immediate future Greyhound would continue to operate the Trailways buses and routes under the Trailways name. They said Trailways drivers and other employees would continue operations and would be considered for positions open in the Greyhound company.

Cutting Back Service

Trailways had abandoned all service in seven states and more than half its service in three others in the last year.

In recent years, Greyhound has cut the number of communities it serves from 14,000 to 12,000.

The percentage of intercity travelers going by bus has been declining for more than 30 years, and amounted to only 1.3% of such travel in 1986, according to figures provided by Greyhound.

Greyhound was sold by the parent, Phoenix-based Greyhound Corp., to Currey after union membership covering 6,300 bus drivers and mechanics rejected a proposed contract that would have cut wages by about 9%.

The union ratified a new three-year labor agreement in February that slightly reduced wages but provided incentive clauses to make up for the pay cuts.

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