James L. Kerrigan, a 49-year-old ebullient and fiery Bostonian, took the driver's seat of Trailways Inc. last month and promised to overtake Greyhound Bus Lines as the industry leader by offering a variety of new passenger, charter and package services that he plans to unveil early next year.
Kerrigan, a former chairman and chief executive officer of Greyhound, assumed that same position at Trailways and said he would steer the intercity bus company away from its aggressive political campaign for deregulation of the $1.3 billion bus industry and would trim the firm's executive staff to re-emphasize the importance of those employees who deal with the public.
"We are going to concentrate our attention on better facilities, good buses and the best drivers," Kerrigan said during a wide-ranging interview in the office that just one week earlier had been occupied by J. Kevin Murphy, who resigned as president of the firm. "There will be a staff reduction. In my experience, nothing that is done in the corporate office has ever done much for the passengers."
Instead, Kerrigan said he will stress what he described as one of the keys to a successful bus company -- maintaining good relations with customers through those employees who meet the public each day.
"I will spend a great deal of time in the field and out in the stations," he said. "I will spend a lot of time talking to drivers and the people who sell tickets. They're really the ones who know what's wrong with the bus company . . . you have to have a feeling of what your customers want."
Kerrigan said he didn't know yet how many people would be pared from the corporate staff but said, "Each employe will start with a clean sheet of paper in the typewriter" and will be given a chance to prove himself or herself. "Everyone has a new opportunity in this company," he said. "I think that should be exciting to them."
Kerrigan began his career in the bus industry when he was 17, working in the Boston Greyhound terminal as a baggage handler for 40 cents an hour. He never finished college, but literally worked himself through the ranks, becoming president of the former Central Greyhound lines in 1966.
Kerrigan was elected president of Greyhound Lines Inc. in 1970 and became group vice president for transportation and a director of the parent company, Greyhound Corp., in 1971. After taking on management positions in the company's bus manufacturing and food service divisions, he was named chairman and chief executive officer of Greyhound Lines in May 1977.
The lifetime bus man had been considered the protege of Gerald H. Trautman, the parent firm's chairman. But after a vicious fare war with Trailways in which Greyhound drew little new business, Kerrigan was forced to leave his $216,366-a-year job in 1977 in the wake of a top management reorganization. Kerrigan walked away from Greyhound with a handsome $250,000 severance settlement.
Today the bus executive doesn't like to talk about his departure, insists he left over differences in so-called "personal policy decisions" with Trautman and discounts reports that he was forced out because Greyhound was having operations problems.
After leaving Greyhound, Kerrigan became president of the Gelco bus leasing company, a division of the transportation and management firm of Gelco Corp. It was in September 1978 that he first approached Holiday Inns Inc. of Memphis about buying the ailing Trailways.
But in September, Holiday Inns, which had purchased Trailways in 1969, wasn't ready to sell the bus company. Serious discussions about the sale didn't start until last May when Holiday Inns completed an internal study from which it determined it wanted to dispose of its transportation properties, which include Trailways and the Delta steamship lines of New Orleans.
On Aug. 17 Holiday Inns announced it had reached an agreement to sell Trailways for about $100 million to Kerrigan and an investment group that includes the New York investment firm of Gibbons, Green and van Amerongen Ltd., and the privately held Hillman Co. of Pittsburgh.
Some bus industry observers have described Kerrigan as an "old busman who does not have any new ideas about how to run a bus company." But one Trailway official, who asked to remain unnamed, suggested that's just what the Dallas firm needs. "I personally think it's time for an old busman to come in," he said. "We need to pay attention to the basics of running a bus company and not running a political campaign."
But whatever path Kerrigan follows, he and his new bus company will face some tough challenges.
In an age when automobile ownership is within reach of most Americans and the airlines are offering a record number of bargain-basement fares, intercity bus ridership has been declining since 1971. In 1968, Trailways transported 25.5 million passengers, but by 1974 that figure had dropped to 21.9 million, and in 1976 it fell again to about 20 million.
Moreover, rising fuel and labor costs, coupled with a federal regulatory system that has been unsympathetic to fare increase requests, have depressed operating profits from $26.6 million in 1974 to $19.7 million in 1978.
Although Kerrigan declined to spell out many details, his proposed marketing program is aimed at luring new passengers to Trailways and overtaking Greyhound, which directly controls 60 percent of the industry. The plan includes:
By improving customer relations and adding newer buses to Trailways' fleet, Kerrigan hopes to attract a new group of passengers who currently use automobiles. Despite the lengthy time it takes to win new routes from the Interstate Commerce Commission, Kerrigan says he will take on new markets and strengthen the route system by linking smaller towns to larger connecting cities.
Although Kerrigan would give few specifics, he said he wants to offer new services to passengers as well as improving the company's more profitable package express and charter bus services. Among the ideas being considered, Kerrigan says Trailways may establish satellite bus terminals within a city so passengers don't have to travel long distances to get to bus stations.
Like his predecessor, Kerrigan wants the federal government to fund urban transportation centers where bus passengers would be able to connect with other modes of transportation including city buses, trains, subways, taxicabs and even airlines.
Kerrigan accurately points out the subsidies to other modes of transportation, noting that bus companies are forced to maintain their own terminals. Those terminals, which were once called "pervert pits" by Murphy, are unsafe and dirty and should be replaced by government-funded transportation centers, Kerrigan believes.