Greyhound has been busing Americans around for a century. It's hard to believe that after all these years, the company is still riding high.
As careers go, Carl Eric Wickman’s stint in the car business was less than auspicious. In 1913, the immigrant drill operator paid $3,000 to open a Goodyear Tire/Hupmobile car franchise in Hibbing, Minn., not far from the world’s largest open-pit iron mine. Unfortunately, Wickman was even worse at selling cars than he was at picking car makers—so the enterprising young Swede abandoned his dealership dreams soon after making his one and only sale … to himself.
Realizing that most iron miners were too poor to afford their own vehicle, Wickman decided to start transporting workers between Hibbing and Alice, a mining town two miles away. Cramming 15 passengers into his eight-seat “touring car,” the 27-year-old charged 15 cents a ride. On his first trip, in 1914, Wickman collected a grand total of $2.25. But 100 years later, that modest sum has grown into nearly a billion dollars in annual revenue.
Wickman, it turns out, pretty much invented intercity bus travel—which for most Americans equals Greyhound, the company that emerged from that long-ago Hupmobile ride. “Greyhound has become generic for bus travel,” says Robert Gabrick, author of Going The Greyhound Way. “Like Kleenex for tissues.” Indeed, this classic American business icon—which, as it happens, is now owned by a British conglomerate—today has more than 7,300 employees, with estimated yearly sales of $820 million and 2,000 buses serving 3,800 destinations in 48 U.S. states and nine Canadian provinces. “I’m amazed at Greyhound’s brand recognition,” says DePaul University professor Joseph Schwieterman, an authority on intercity bus travel. “It’s an American success story.”
But Greyhound’s journey to bus-industry dominance was far from smooth, not least because U.S. roads were god-awful bumpy when Wickman started out. Indeed, Uncle Sam’s first serious stab at building a quality national road system was the Federal Highway Act of 1921, which by coincidence was the same year that the first intercity buses rolled off assembly lines.
Yes, Wickman invented the bus business before the bus was invented.
But that wasn’t his only challenge. Wickman’s “Snoose Line”—“snoose” was Swedish for snuff, which local miners snorted to stay alert—also faced competition from other car owners who saw money-making possibilities in hauling people to work. So in1916, Wickman and his two partners merged their company with a rival outfit operated by a 19-year-old mechanic and Studebaker-owner named Ralph Bogan. They called their new company Mesaba Transportation Co., and the deal became a template for the future, as Wickman expanded his bus empire across America by acquiring hundreds of competitors over the years. In fact, Greyhound was for decades really just a collection of regional bus lines united under a single brand—Great Lakes Greyhound, Florida Greyhound—connected by sophisticated timetables and transfers. Even Greyhound’s corporate history reflects a slick transfer. The company officially traces its lineage to Wickman’s Hupmobile, but he actually sold his stake in Mesaba in 1922 and invested in another Minnesota operator soon after. In 1925, that company merged with a Wisconsin bus line operator to form Northland Transportation, which was Wickman’s first stab at interstate bus travel. It was also—for anyone still trying to keep score—the official birth (following a couple of name changes) of the modern Greyhound Corporation.
But first, a railroad big shot had to see something hiding in plain sight.
Early in the 20th century, Americans generally took trains when they needed to travel between cities. But after World War I ended in 1918, train ticket sales started to decline, a development that prompted railroad executives to attack bus companies—whose fares were cheaper—by accusing them of ruining America’s roads and failing to pay their share of repair costs. Then, in 1925, Great Northern Railroad president Ralph Budd decided to actually study the matter. Surprisingly, Budd’s investigation showed that passenger traffic on trains declined even when there was no route competition from buses. The real culprit, his research showed, was Henry Ford, whose introduction of the assembly line into car-making in 1913 resulted in drastically lower car prices: The railroads were losing business to Model T’s, which many former train riders could now suddenly afford. Those unlucky folks who couldn’t—or those who didn’t know how to drive—still traveled by train, unless they were too poor to afford a ticket, in which case they took a bus.
Budd quickly understood that train and bus operators should be allies, not enemies. Bus routes could replace money-losing rail runs, while also feeding passengers to trains when it made sense. And so, in 1925, Great Northern Railroad bought 80% of Northland, transforming Wickman’s company from a cash-strapped regional operator into a well-financed national company. This deal, as much as anything, allowed Wickman and his colleagues to expand, not to mention survive the Great Depression and emerge with a national brand: Greyhound, the name of a small bus line Northland Transportation bought and decided to use for the whole shebang.
Good thing, too, since it’s tough to imagine people writing crowd-pleasing lyrics about “Northland Transportation.” Greyhound, on the other hand, has turned up in songs ranging from Robert Johnson’s “Me and the Devil” to Chuck Berry’s “Promised Land” to the Allman Brothers’ “Ramblin’ Man.” But the free product placement that truly turned Greyhound into a cultural icon was the 1934 movie It Happened One Night. A huge hit, the Columbia Pictures comedy starred Claudette Colbert as a spoiled heiress on the run and Clark Gable as a reporter chasing her, but third billing should have gone to the Greyhound bus featured prominently in the action. Company officials credited the film for spurring interest in bus travel, and 12 years later Greyhound was still inspiring silver screen romance: The 1946 musical No Leave, No Love, featured the hit “Love On A Greyhound Bus” (a song that won’t be confused with the less romantic 2003 Sara Evans country hit, “Backseat of a Greyhound Bus). Eleven years later, Greyhound launched another improbable cultural touchstone: Lady Greyhound, whose 13-year career as company “spokesdog” began on The Steve Allen Show in 1957 and included chairing the “pet division” of the National Multiple Sclerosis Society, not to mention her own canine fashion show at the New York World’s Fair and dozens of fans clubs around the U.S.
It was during these decades—from the 1930s through the 1950s—when Greyhound was among a small group of U.S. firms that helped America reimagine itself. Mostly movie studios, automakers and large consumer product companies, these firms painted a picture through their ads and products of a country whose future was only exceeded by the gumption of its citizens and the bounty of its natural resources. Greyhound’s self-selected role was as unofficial tour guide. “Greyhound invested time and financial resources in advertising its ability to transport passengers all over the U.S.,” says Margaret Wash, an intercity bus historian. “They suggested it was fashionable to take bus trips.”
Image courtesy of eCrater
Starting in the 1930s, Greyhound’s national ad campaigns emphasized (or exaggerated) bus travel’s excitement (“Now I Know How Columbus Felt!”), low cost (“Spend less … and have the best vacation ever!) and killer app: someone else at the wheel (“Leave the Driving to Us”). But the real stars of these ads were America (“Roaring Cities, Calm Countryside”) and family (“Rolling Home”). “These campaigns made bus travel into a business of aspirations,” says Robert Gabrick, author of Going The Greyhound Way. “They idealized their passengers and the country they lived in.”
Greyhound was especially enmeshed in the fabric of American life during a crucial period in the nation’s history: World War II. From 1941 to 1945, the company aggressively adopted a patriotic mission, even going so far as to outline its priorities in its 1942 annual report to shareholders. Through its ads, meanwhile, Greyhound told consumers what it saw as its primary wartime function: transporting troops and other crucial personnel around the country (“This Army Moves By Greyhound”); after that came educating the public about efficient travel (“Serve America Now So You Can See America Later”), which mattered a lot now that fuel and rubber were being rationed.
Image courtesy of the Library of Congress
Before and after the war, though, Greyhound spent much time, money and effort on forward progress. In 1930, company headquarters relocated from sleepy Duluth, Minn., to wide-awake Chicago. Ten years later, Greyhound became the first bus line to launch a national chain of depot restaurants—Post House—aimed at riders who didn’t like greasy roadside diners. (Ask your grandparents.) The next year, Greyhound bought 10% of the Canadian bus builder Motor Coach Industries (it later acquired the rest). And, of course, Greyhound was for years at the cutting edge of bus design, with models that still enthrall a large community of collectors: 1939’s Super Coach (first bus with an all-metal body and rear-mounted engine), 1953’s Highway Traveler (picture windows, power steering, air shocks) and 1954’s Scenic Cruiser, which debuted the year Wickman died and gave the world a gift for the ages: on-board bathrooms.
Greyhound was the official bus line at both the Chicago (1933-34) and New York (1964-65) World’s Fairs. But nothing at either of those fantastical expos matched the company’s 1943 application to the Civil Aeronautics Board, which outlined a plan for “the integration of air service and bus service”—a.k.a., a helicopter-bus! Sadly, this crazy-genius idea was not to be. Just four years later Greyhound told annual report readers that “it will be some years before the development of a helicopter with sufficient capacity for economical capacity” to make the idea a reality. But if Greyhound failed to lift bus travel to new altitudes, the company did manage to usher America into other strata of uncharted territory. During WWII, for example, Greyhound replaced many of its drafted bus drivers with women, which was arguably the first time America confronted such a wholesale substitution of traditionally male authority figures.
Two decades later, Greyhound found itself in the middle of another cultural shift, when civil rights activists known as “Freedom Riders” rode Greyhound (and then-rival Trailways) buses into the Deep South to protest segregation. Until then, intercity bus drivers followed a common practice when crossing the Mason-Dixon line, asking black passengers to sit separate from whites in the back of the bus. But within a few months of the Freedom Riders campaign, Uncle Sam outlawed segregation in any facilities or vehicles involved in interstate commerce.
Greyhound's overall record on race-relations was mixed. On the one hand, Greyhound had a history of hiring blacks; on the other hand, most of those jobs were menial. The good jobs—drivers, managers, mechanics—generally went to white men. This was especially galling to many because African-Americans always accounted for a disproportionately large percentage of intercity bus passengers.
Throughout this country’s two “Great Migrations”—during and after each World War—millions of southern blacks moved north and west in search of better lives. More often than not, they rode Greyhound for their big move and also for trips back home to visit friends and family. So it was no coincidence that in 1962, as the Civil Rights movement heated up, Greyhound strengthened its ties to black Americans. Joe Black, a former Brooklyn Dodger who was the first African-American pitcher to win a World Series game, was hired as full time director of Greyhound’s outreach program. “The intercourse between Greyhound and blacks is one of the happier aspects of the company’s history,” writes Carlton Jackson in Hounds of the Road, a corporate history.
Still, by the time Black was hired, there were other trends bubbling that had greater consequences for bus travel. In 1956, Congress passed the Interstate Highway Act, which created the Dwight D. Eisenhower System of Interstate and Defense Highways. Eisenhower was president at the time, but that’s not why his name is on America’s largest public works project to date. In an earlier career, while saving the world from Adolf Hitler as Supreme Commander of Allied Forces in Europe during World War II, Ike noticed that Germany had a superb highway network, which was helpful when moving trucks and tanks around. He came back to the U.S. pretty well convinced that his home country needed its own system of high-quality roads.
But as much as drivers today love cruising I-4 through I-99, America’s expanding highways were a mixed blessing for Greyhound. Better roads meant quicker travel and fewer repairs, but they also encouraged the growing ranks of car owners to drive themselves on business trips and vacations. As any farsighted executive could see, this development, coupled with the increasing affordability of air travel in the 1950s and 1960s, spelled trouble for the bus industry. So Greyhound started buying all sorts of companies in all sorts of non-bus industries. That’s how Greyhound’s stable of businesses came to include such diverse businesses as Burger King, Dial Soap, Purex bleach, a package delivery service, and even a skin bank for burn victims.
Depending on whom you ask, this strategy was either the beginning of a decades-long loss of focus that ate away at Greyhound’s soul or a smart strategy for diversifying profits and protecting shareholders. “Greyhound was generating massive amounts of cash that probably wasn’t best invested in a slow-growth business like bus travel,” says Craig Lentzsch, Greyhound’s CEO many years later (1994-2003). “Shareholders did very well during those years.” On the flip side, it was during this time that Greyhound’s core business started to weaken: Buses started deteriorating, terminals became seedy and dangerous, and workers grew unhappy. “There were economic and cultural forces at work but Greyhound also lost sight of what made bus travel successful,” says Gabrick, the author. “It became a business of low aspirations.”
Whatever the verdict, where once the giant company was known, at least somewhat affectionately, as “The Hound,” consumers soon enough started calling it “The Dirty Dog,” with absolutely no affection at all. “It was pretty bleak,” says James Inman, a comedian whose book about a 1995 cross-country trip, Greyhound Diary, captures the zeitgeist of the Dirty Dog from the late 1970s until the mid 2000s. “It was a lesson in America’s class divide: broke people, unpleasant buses, rude drivers, horrible terminals. There was no romance of the road at all.”
There certainly wasn’t much at Greyhound HQ, which moved from Chicago to Phoenix in 1971. Sixteen years later, like Abraham casting Ishmael into the desert, the Greyhound Corporation spun off its U.S. bus operations. Newly liberated and headquartered in Dallas, Greyhound Lines returned to its roots, acquiring Trailways, its largest rival, that same year. Federal anti-trust lawyers, who take a dim view of mergers that create monopolies, might have blocked the deal in different times. But Trailways in 1987 was in financial trouble, and the government decided that saving jobs and retaining bus routes trumped other concerns. Plus, the bus business was struggling enough that few informed observers worried too much that Greyhound would try to price-gouge in the face of less competition.
How right they were. Three years later, in 1990, Greyhound faced its own financial cliff when its unionized workers went on strike. This labor stoppage, one of the longest and nastiest in American history, forced the company to drastically curtail operations, which resulted in big losses. So big, in fact, that soon after its union started picketing, Greyhound execs filed for bankruptcy protection, a move that allowed their company to keep operating during a whopping three-year strike. But that labor strife, which often turned violent, had a silver lining. In what might be called a reverse Eisenhower, this overwhelmingly awful turn of events sowed the seeds of Greyhound’s later revival.
Since 1972 Greyhound had been marketing directly to the Hispanic community, with great success, but the strike caused the company to cut many of the routes that catered to Spanish speakers. Not surprisingly, newer, smaller bus companies popped up to serve these passengers. They did very well, largely because many owners, managers and drivers spoke Spanish, which was not often the case on Greyhound. “Bus travel is a service industry,” says Lentzsch, the former president. “When you have Spanish-speaking drivers serving Spanish-speaking passengers in an English-speaking country, the experience will likely be a positive one.”
For Greyhound, though, the experience was negative, as the company struggled to get Hispanic customers back on its buses after settling its labor differences. Things got even worse as the ethnic-bus model was copied in various other ethnic communities around the U.S., resulting in the curbside buses that started popping up 10 to 15 years ago in major cities with large Asian populations like Chicago, New York and Washington, D.C. These competitors also cut into Greyhound’s business, not only among Asian consumers but also students and other cash-conscious riders, as well as travelers who simply wanted to avoid airport security and bus terminals.
But Greyhound, which had merged with the Canadian bus company Laidlaw Inc. in 1999, was finally getting on its feet again. The company began to revamp its fleet, part of an “Elevate Everything” program that included new looks for buses, terminals and uniforms. Then, in 2008—one year after FirstGroup of England bought Laidlaw—Greyhound finally started exploiting the enormous opportunity in the discount and curbside bus business. The company launched (on its own and with partners) three different services: NeOn, BoltBus and Yo! Bus. Amenities like free WiFi, power outlets, leather seating and extra legroom began to appear on more and more of its buses. “I think it’s fair to say that Greyhound is once again proud of its product,” says Schwieterman.
Today, the company is getting more money from more trips from more passengers than ever. The average Greyhound passenger pays $52 to travel 355 miles, and last year the Dirty Dog’s buses covered 5.6 billion passenger miles—about 2.8 billion times the distance between Hibbing and Alice, Minn.
Carl Wickman would be proud.