ABERDEEN, Scotland Is it time to say good-bye to Greyhound Lines as you know and love it?

Early this month, the purchase of Greyhound's parent company, Laidlaw International, by the largest operator of buses in the United Kingdom, FirstGroup PLC, was completed and there were immediate changes at Greyhound.

Three top executives, including Greyhound President and CEO Stephen Gorman, were out. Gorman resigned, but a First Group spokesman said his leaving was by mutual agreement.

Also gone was Greyhounds chief marketing officer, Toby Purdy, and Peter Palladino, vice president of technical operations. There was no comment on their departures, although FirstGroup's chief executive, Moir Lockhead, suggested that further revenue growth was possible at Greyhound through, in part, improved marketing.

Promoted to replace Gorman as president and CEO was Dave Leach, who moved from the top job at Greyhound Canada last year to become chief operating officer at Greyhound Lines in Dallas. Leach replaced long-time Greyhound COO Jack Haugsland, who retired.

Leach is 43 and has been with Greyhound for 21 years. As COO his responsibilities included customer service, driver operations and maintenance.

Gorman had been CEO at Greyhound since July 2003, and it was during his tenure that Greyhound got a complete system makeover, eliminating more than 1,000 stops, hundreds of buses and thousands of employees, and embarked on a program to upgrade it stations, service, buses, people and image through an initiative called "Elevate Everything."

What will happen to Greyhound beyond the executive changes appears to be anybody's guess, though Lockhead again confirmed First Group intends to examine the company from top to bottom, and he may seek a buyer.

Greyhound times two

There are now two former Greyhound CEOs -- with recent experience running the company -- who would be fully capable of leading buyout efforts Gorman and Craig Lentzsch, the former CEO of Coach America and Greyhound. It was Gorman who succeeded Lentzsch at Greyhound four years ago. Lentzsch recently left Coach America. (See Oct. 1 issue of Bus & Motorcoach News.)

Lockhead did, however, point to one option for Greyhound that might be tackled right away selling off company real estate, but only if it can be done without disrupting operations.

He pointed out that Greyhound has real estate valued at upwards of $200 million that could be turned into cash. For example, the company owns terminals in downtown Dallas, Seattle and Chicago.

What will become of -- or happen to -- the rest of Greyhound continues to be the fodder of intense industry speculation. One popular theory is that Greyhound will be carved up into separate regional companies and sold off in pieces.

There also has been speculation that some departments of Greyhound would be moved from Dallas to Cincinnati, Ohio, the U.S. headquarters of FirstGroup. A spokeswoman for FirstGroup seemed to throw cold water on that possibility, however.

Jennifer Robinson was quoted as saying Greyhound would remain based in Dallas and would not be combined with FirstGroups other operating units.

What a deal

Completion of the takeover of Laidlaw by FirstGroup turned out to be smoother (and more lucrative) for FirstGroup than any executive, analyst or financial journalist had speculated might happen.

The final hurdle, getting U.S. Department of Justice anti-trust approval, turned out to be a piece of cake or, in the words of Lockhead, "considerably less onerous" than their acquisition model had projected.

There had been wide speculation the federal government might force FirstGroup to divest a significant number of school bus contracts because of the combining of FirstGroup's FirstStudent subsidiary with Laidlaw's large school bus operation.

In the end, the feds only required FirstGroup to divest 800 school buses in Alaska -- out of a combined total of 62,000, or barely more than 1.25 percent. FirstGroups school bus business in Anchorage was sold to Forsythe Transportation.

Still, the antitrust agreement may require a few more divestments or contract terminations by FirstGroup, and there was some attrition this past summer during the school contract re-bid cycle.

In the end, though, the total of the divestments and attrition is expected to represent only 3 percent of the combined Laidlaw-FirstGroup school bus fleet. That is why Lockhead was elated.

The combining of Laidlaw and FirstStudent creates by far -- the largest school bus operation in the U.S. It is five times larger than its nearest competitor.

Rolling in dough

FirstGroup also benefits greatly from strong cashflows at Laidlaw during the first nine months of this year. In fact, Laidlaw's business units threw off so much cash that it reduced the level of debt FirstGroup needed to finance the takeover by $200 million.

After the Laidlaw-FirstGroup deal was announced in February, there was some criticism of Laidlaw management and directors for not seeking a better purchase price or other bidder. It now appears the critics may have had a point.

FirstGroups U.S. operations, which now account for 45 percent of its revenue and 51 percent of its earnings, are headed by Dean Finch, who has the title of chief operating officer North America.

Finch is a 41-year-old executive who had been finance director of FirstGroup in Scotland. FirstGroup says he will lead all aspects of the integration of Laidlaw and how the companies' operations can be merged to produce the best results.

Finch joined FirstGroup eight years ago in the companys rail division. He is an accountant by education and experience, and worked for KPMG for 12 years before joining FirstGroup.

Other key FirstGroup North America executives include Mark Lawton, chief financial officer, and Doug Carty, commercial director.