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A publication of the Mineta Transportation Institute College of Business

A seven-week strike occurred at Greyhound in 1983. Another one started in 1990 and ended more than three years later. Both made history. Both had devastating consequences, for both the union and the company. Greyhound Bus Lines had experienced strikes before 1983, but they were generally only local strikes with relatively modest impact on the company's labor relations and its financial health.

Generally speaking, the relationship between company and union had been good, and both sides had prospered. All that changed dramatically in November of 1983, when contract negotiations between the company and the ATU broke down and a bitter, highly publicized nationwide strike erupted.

It was a strike marked by physical violence between striking employees and the company's newly hired striker replacements. It was a seven-week long strike that the ATU could not win. Some 12,700 ATU members walked off the job. Many of them regretted it, especially as Christmas drew closer and closer.

Before 1982, Greyhound was a prosperous company that prided itself on paying the highest wages in the industry.

Greyhound all but ignored its competition, including  Trailways, its main competitor, which paid considerably lower wage rates than Greyhound.

Considering Trailways' frail financial situation and the prospect of losing union members' jobs, the ATU agreed in early 1982 to a wage freeze at Trailways. Lower wages enabled Trailways to launch a major price war against Greyhound, well publicizing its lower bus fares.

At first Greyhound ignored Trailways' discounted fares and price war publicity. During spring of 1983, however, Greyhound began to experience a sharp decline in ridership. Passengers had become more price conscious. As a result, Greyhound had no choice but to drop its fares.

Deregulation of the transportation industry made the competition for passengers even stiffer. New entrepreneurs who paid low wages entered the business and offered fare prices much lower than the more established inter-city lines.

The newly deregulated airline industry made things even worse for Greyhound.

Low-cost passenger airline carriers sprang up after deregulation of the industry and gave intercity bus lines a run for their money. People Express, for example, charged only $23 for a flight between New York City and Buffalo. Greyhound charged $41 for the trip. A flight by Southwest Airlines from San Francisco to Phoenix was only $60, compared to a Greyhound's bus ticket to the same location costing $79. By the middle of 1983, Greyhound showed an operating loss of $18 million. Greyhound's operating costs were 30 to 50 percent higher than that of other major bus lines.

The company was paying about $62 million a year more for salary and benefits of its nearly 7,500 bus drivers than other bus companies. The difference in wage and benefit cost for mechanics, service personnel and office employees between Greyhound and its competitors showed a similar disparity.

No wonder during the 1983 contract negotiations with the ATU, Greyhound insisted on a 9.5 percent wage cut. Union leaders and union members were outraged, and a bitter strike ensued. Unfortunately for the union, it came during a period of high nationwide unemployment and only weeks before Christmas.

The company was ready. It had already recruited more than 1,300 new hires in anticipation of the strike. Many of them were experienced drivers of other bus companies. The company announced that it would replace all striking employees with new hires at the lower, prevailing industry wage rate. The company gave its all in resisting the strike and kept the buses rolling. It trained new drivers, sent hundreds of executives to do field work, video taped acts of violence on the picket line, and did everything in its power to fight the union in the courts. Still, replacing the entire workforce on strike was costly and time consuming. Both sides felt the economic pressure.

Greyhound had to cut back on its passenger service. The company had lost much business, and the union many jobs. In an attempt to get striking employees to return to work, Greyhound lowered its proposed pay cut to 7.8 percent. The union leaders submitted the offer to a vote of its 12,000 members but recommended strongly against it. As one might expect, the overwhelming majority of those voting rejected the offer. Federal mediators entered the picture. They eventually managed to broker a tentative agreement on December 2, 1983.

The union agreed to send the last offer of the company, including the 7.8 percent wage cut, to the homes of its members for a vote, to be returned by mail. The vote count on December 19, 1983, showed that this time an overwhelming majority of striking employees decided to return to work.

A painful seven-week strike had come to an end just a few days before Christmas. But the ATU had suffered a major defeat that would haunt it for years to come. It had to settle for the same 7.8 percent wage cut the company had insisted on way back in November. In addition, the union had to swallow a cut in pay from ten to eight percent per year; a four percent cut in pension benefits, and a two-tier pay schedule that paid new hires 20-25 percent less than employees under the old contract.

Greyhound, on the other hand, boasted that it had gained the wage parity it had been seeking, yet at the same time paid the highest wages in the industry. At that time, labor costs amounted to about 62 percent of total operating costs. The union's concessions had brought the company about an eight- percent reduction in bus line operating expenses over the life of the new three-year contract.

The company's victorious feelings were short-lived. Economic pressures kept increasing. The deterioration of economic conditions in the inter-city bus industry in general continued to get worse, and with it the strength of the ATU deteriorated further.

In 1984 Greyhound laid off about 1,500 employees, including 400 supervisors, and in 1985 sold 120 bus terminals, terminating 2,000 more employees, and franchised many routes to lower-cost bus companies.

Amongst economic chaos, in 1987 a group of Greyhound investors, led by Fred Currey, acquired Trailways, Greyhound's major competitor, in a leveraged buyout.

Approximately 1,400 Trailways bus drivers were absorbed into ATU bargaining unit at Greyhound. Greyhound gave them full seniority for their years at Trailways. In the contract negotiations that followed,

ATU members suffered further wage cuts, even greater than before. In addition, they had to agree to another two-tier pay schedule, under which new hires would be making even less than they did already.

By the time the next contract negotiation between the ATU and Greyhound Lines came around in 1989, the company's profits had improved, although it still had a large debt burden. With the news of improved profits in 1989 came employee expectations of higher pay. The company strenuously resisted union demands for a wage increase citing its heavy debt burden, claiming that its profit in 1989 was modest, and that it had incurred losses amounting to $20 million the previous two years. In addition, the company emphasized its need to keep its labor cost down because of the heavy competition from railroads and airlines.

The union claimed that the company had understated its profits, and that its heavy debts were due to poor management. The acquisition of Trailways alone had increased Greyhound's debt by $80 million, bringing the company's total long-term indebtedness to $300 million. Given its increased profits in 1989, the ATU claimed that the company could afford higher wages. Yet by June 1990, Greyhound had declared bankruptcy.

By the time the collective bargaining agreement had expired on March 2, 1990, the parties were still hopelessly deadlocked.

Greyhound management refused to extend the current contract, and a bitter strike ensued.

It was the most violent strike the industry had ever seen, marred by dozens of shootings, over 100 bomb threats, and even one striker being killed by a bus driven by a striker replacement.

Close to 9,000 Greyhound employees were out of work, and the company once again hired a large number of striker replacements. The ATU claimed, with a good deal of justification, that Greyhound was out to bust the union.

Greyhound CEO Fred Currey certainly was no friend of organized labor.

The ATU filed unfair labor practices charges with the National Labor Relations Board (NLRB), which were later upheld.

The ATU pointed out that Greyhound had already advertised that it was hiring permanent striker replacements while it was still in negotiations with the union, and had already hired and trained hundreds of non-union strike breakers well before the strike began.

As the strike progressed Greyhound continued operations, using more than 2,450 strike-breakers. The union successfully enlisted public and government support by pointing out that striker replacements were poorly trained and presented a danger to public safety. It also publicized injuries of strikers on the picket line and blamed the company for inciting the violence. Union attempts to get legislation passed to make the hiring of strike-breakers illegal were unsuccessful.

Both the union and the company, however, filed a large number of unfair labor practice charges with the NLRB, and even initiated lawsuits in the courts. They accused each other of inciting violence on the picket lines and illegal collective bargaining practices. One of the most shocking examples of strike violence occurred in Redding, California, when a striking ATU member was killed by a Greyhound bus driven by a newly hired strike-breaker.

In March 1990, Greyhound broke off further negotiations. As time went on, and no end seemed to be in sight, the strikers became more and more weary. The picket lines at Greyhound bus terminals around the country grew thinner and thinner. Drivers started to cross the very picket lines they had staffed earlier.

In 1993, near the second anniversary of the strike, when about 1,500 striking employees had already returned to work, the ATU capitulated and told its members that they were free to return to work.

Lessons Learned

Did Greyhound "win" the strike?

Certainly not. Both sides had lost, and lost badly. Before the 1990 strike, Greyhound had employed 6,300 drivers. When the dispute ended, there were only 3,300. The ATU suffered devastating losses in membership. The company was already bankrupt by the middle of 1990.

CEO Fred Currey lost his job, and he was replaced by Frank Schmieder, who had a reputation of being less hostile to unions than his predecessor. The company lost its appeals to the NLRB. Both sides had filed over a hundred charges, claiming unfair labor practices by the other during the strike.

On the major issues, the NLRB ruled in favor of the union. It decided that the strike had been caused and delayed by the illegal practices of the company--practices that included bargaining in bad faith, illegally giving striker replacements seniority over striking drivers, making unlawful bargaining proposals, interfering with employees' rights to engage in lawful union activities, and unlawfully discharging over 200 striking drivers nationwide.

But the union lost also. Although the NLRB awarded $22 million in back pay to ATU employees, the bankruptcy courts severely limited the back pay to which striking workers were entitled.

The NLRB rulings, and a more conciliatory attitude of the new Greyhound CEO Frank Schmieder, however, led to renewed contract negotiations between the ATU and Greyhound. This resulted in an agreement reached in April 1993, more than three years after the previous contract had expired. The ATU had reestablished its right to represent Greyhound workers, but Greyhound gained the right to retain the replacement workers it had hired during the strike.

The ATU won the recall of 550 drivers still on strike and the reinstatement of workers the company had fired for violence related incidents. The contract, which the ATU membership ratified in May 1993, called for a 20 percent wage increase for employees over the life of the six-year contract, in addition to the $22 million in back pay to eligible strikers which the NLRB had previously awarded the union.

It is difficult to overestimate the impact these two Greyhound strikes had on labor relations in the entire transportation industry, including transit. The realization that strikes of this magnitude could ruin both union and company brought about a greater willingness on both sides to engage in interest-based bargaining and other forms of union-management cooperation. We have encountered union leaders in transit facilities who used to work for Greyhound and who still remember the hardships the Greyhound strike brought to striking drivers and mechanics. Said one interviewee, the chair of the union negotiating committee at a transit facility:

When the company and the national VP of the ATU suggested that we try interest-based bargaining here at this transit facility, I was ready. I have been through three strikes in 10 years, including the big one at Greyhound. I am a middle-aged woman, a single parent. I knew I couldn't afford another strike...Nobody ever wins in a strike, even if you get what you want. By the time the strike gets settled, for the most part you have lost a lot, and it takes years to recoup it. As far as I was concerned, strike was not an option...there had to be a better way...The others [who once worked at Greyhound] felt the same way.

The losses suffered during the Greyhound strikes also caused the national leadership of the ATU to re-evaluate its bargaining relationship with transit companies. Jim LaSala, president of the ATU, became a champion of interest-based bargaining. Terry Van der AA, founder of and CEO of Vancom Transportation, which owns a number of transit companies in this country, spoke of a meeting he had with Jim LaSala in Washington in 1993:

I have to give Jim LaSala credit. He had just been through the Greyhound strike for three years. ATU had lost two-thirds of its membership, and the strike almost ruined Greyhound. When I was in his office in Washington, he said that the ex CEO of Greyhound had sat in the same chair I was sitting in and had told him the same thing that I was telling him about working together. LaSala said: "I should have listened." He now recognized, because of the Greyhound strike, that whoever ATU's employees worked for had to be successful, or else ATU was not successful. The Greyhound contract now has some elements of participation in it, and LaSala was introduced to those by Greyhound. When the whole thing was settled, Secretary of Labor Reich was at the final signing of the contract and gave both sides accolades for reinventing, if you will, labor relationships. It's possible that LaSala liked that sense of being a pioneer.

There are lessons to be learned by transit management and transit unions, not only from the Greyhound strikes, but strikes in the airline industry as well--particularly those experienced by Eastern Airlines. Kenneth Jennings, distinguished labor relations scholar, has noted that Eastern Airlines failed to learn from the Greyhound experience, and as a result, suffered the same fate. According to Jennings, there are several lessons we need to learn from the Eastern Airline and Greyhound experiences, lessons that apply to the entire transportation industry:

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MTI Report 01-02


September 2001

Herbert H. Oestreich (Principal Investigator)

George L. Whaley (Research Associate)

a publication of the

Mineta Transportation Institute College of Business

San Jose State University

San Jose, CA 95192-0219

Created by Congress in 1991

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