The Greyhound Corporation
List of Deals
- 1970 $80,000,000 principal amount of 6 1/2% convertible subordinated debentures, due January 15, 1990
The bus company that became Greyhound Corporation was founded in 1913 by Carl Wickman. Wickman's company began by transporting miners from Hibbing, Minnesota, to Alice, Minnesota. Since there were no buses at the time, the company used large touring cars, mostly Studebakers and Packards, sawed in half and elongated. In 1916 the company, then known as Hibbing Transportation, had its own bus station, which was located in a firehouse.
By 1915 the company was already faced with competition, as another local entrepreneur started up a transportation service along the same route that Wickman had established. The company then began a pattern of merging with competitors and acquired this new company. By the mid-1920s Wickman's company, renamed Mesaba Transportation Company, was worth several million dollars.
Wickman left the company in 1925 and bought a fledgling company known as the White Bus Line. This company merged with others to form the Motor Transit Corporation, nicknamed "Greyhound." Greyhound came along at a time when the idea of the "vacation" became firmly entrenched in the American psyche.
The Depression had a great effect on the new company. In 1929 Greyhound's net income was $1.3 million; by the next year this figure had dropped to $38,000. The company's name changed to Greyhound Corporation in 1930. Two factors in the mid-1930s saved Greyhound by increasing ridership: The first was the 1933 World's Fair, and the second was a 1935 movie, "It Happened One Night," in which the star takes a cross-country bus trip. Following these events, the company's revenues began to steadily increase, to approximately $6 million by the end of the decade.
As was the case for many companies, World War II had a dramatic impact on Greyhound. One of the company's principal duties during the war was to transport workers to shipyards and munitions factories. Military personnel were often transported via Greyhound to their bases. Wartime responsibilities and gas shortages made it difficult for the company to serve all of its civilian customers; in fact, it used advertisements to discourage ridership during this time. Greyhound's war efforts proved productive, and by the middle of the decade the company's profits had climbed to $10 million. By that time, Greyhound's bus routes stretched across the continental United States and Canada.
The postwar years were not kind to the company. Prosperity in these years led to an increase in passenger cars, which translated to fewer bus patrons. Furthermore, the company experienced severe labor problems at that time. In the 1940s Greyhound established a chain of restaurants, called "Post Houses," in its larger terminals. These were successful, as was the package express business it started. In 1956 the company decided to branch out into the car rental business. This proved to be an unsuccessful venture, as the typical Greyhound bus passenger, to whom the rental business was geared, was not likely to rent a car. Within two years the company abandoned this program.
In the 1960s Greyhound was the transportation of choice for the freedom riders. The company was fairly progressive, and the company contended segregationist laws that required that African Americans ride in the back of the bus. Greyhound was also one of the first companies to implement something resembling an affirmative action program. Around this time, the company began to diversify into businesses not related to transportation. In 1962 Greyhound acquired Booth Leasing and soon became the largest industrial leasing company in the world. Among the items offered for leasing were computers, locomotives, and jets. In 1966 a separate computer-leasing company was formed. The company expanded its food services in 1964 with the purchase of a roadside restaurant chain, Horne's, and a large industrial and institutional caterer, Prophet Foods. By 1965 the company had added a money order firm, Traveler's Express, and an insurance company, General Fire and Casualty. In 1967 Greyhound acquired Aircraft Services International, which provided ground handling and janitorial services. The company also began to provide food for the airlines. In 1970 the company acquired Armour Foods for $400 million; this proved to be a very lucrative action.